What are your reasons for studying Economics - Economics - Introduction

Question

What are your reasons for studying Economics?

Bhawna Madaan · Accepted Answer

The need to study economics stems from the basic
problem of scarcity and choice The basic concern of economics is to
allocate the scarce resources to the best possible use in the face
of unlimited wants Consequent to the scarce availability of
resources, an economy needs to make choice to allocate the scarce
resources to the areas with maximum possible and optimum returns
Thus, the study of economics is very important The following are
the reasons that make the study of economics inevitable
1 To study the Theory of Consumption
The Theory of Consumption deals with the study of the behaviour
of the consumers in different types of market The basic concern of
this theory is how a rational consumer makes his/her preferences to
get the maximum possible satisfaction in the facet of fixed level
of income, given prices of the goods, etc
2 To study the Theory of Production
The Theory of Production studies the production decisions of the
producers in different types of market The theory investigates how
a producer takes production decisions The theory highlights how a
producer combines different inputs (given their prices) in order to
minimise the cost of production and to maximise the profits
3 To study the Theory of Distribution
The study of economics makes us aware about the distribution of
national income In other words, how the income arising from the
total production of an economy is distributed in the form of wage,
profit, rent and interest to different factor owners (like, labour,
entrepreneur, land, capital)
4 To study the basic macroeconomic problems faced by an
economy
Economics proves as the most powerful tool to understand and
analyse the root cause of basic macroeconomic problems faced by an
economy like, poverty, unemployment, income disparity, etc
Economics helps us not only in understanding the interrelationship
among these problems (like the relationship between poverty and
unemployment) but also to take various corrective measures