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WHY STUDY ECONOMICS1. What is economics? Economics is a society science, that concerned with elections, that have made by people and society, when it comes to allocation resources. 2. What does economics teach people? Economics isn’t a bachelor’s degree or master’s degree in business or financial management, although economics teaches us important business skills. 3. What does economics explain? Economics is a social science that helps to explain the secrets of how people make their living, enterprises earn their profits and societies achieve their goals. 4. Why are people’s lives concerned with the economy as well as with economics? If we want to get job we have to enter the economy or in other words, to enter the market for labour. If we want to buy food or clothing we go to the economy or, to put it another way, enter the market for a particular commodity. We all make economic decisions every day of our lives and economics helps us improve the decision-making process. 5. Why is studying economics worth people’s effort and time? Economics helps answer questions we can’t help dealing with in a contemporary society – allocation of resources, inflation, unemployment, discrimination, economic growth, pollution and poverty. Thus, studying economics is worth our effort and time as it enables us to improve our own as well as a nation’s welfare. 6. What are the reasons to study economics? They are as different as we are and the ways it helps us individually change from person to person. 7. Why is economics considered a training of clear and accurate economic thinking? Develops an analytical, clear, and accurate way of economic thinking about all kinds of things and can be applied to a variety of different fields. It is a powerful tool which, once learned, enables us to separate facts from emotions, examine and track cause and effect relationships carefully. Economic reasoning also helps to evaluate the advantages and disadvantages of choices we make in order to gain our aims and deal with a wide range of economic matters intelligently. 8. What does economics mean for people? Studying economics is worth our effort and time as it enables us to improve our own as well as a nation’s welfare. 9. Why does economics teach people how to gain a living? Studying economics we can realize where our money comes from and goes in and how to manage money get. The more we know about economics, the better career and business decisions we are able to take, the higher living standard we enjoy. 10. Why should people in the world of business require knowledge of economics? Businessmen require knowledge of economics to achieve the highest production efficiency, draw the greatest possible profits with the least possible production costs, meet competition in the market and as a result succeed in the business world. 11. In what way do people use their basic understanding of economics? Besides, a basic understanding of economics is necessary if we want to understand national and international affairs an become responsible and knowledgeable citizens in order to affect the decision of our political leaders by voting, directly or indirectly, on many matters involving economic issues. 12. Why is economics important for governments? Economics is important for governments, as they want to come to good decisions about economic policies. 13. Why is economics considered so important? Economics is important for individuals, as economic decisions affect the quality of their life; Economics is important for firms, which need to be profitable in their activities; Economics is important for governments, as they want to come to good decisions about economic policies. Economics is important for society as whole, since it needs to use its productive resources in the most efficient way. 14. What are the ways economic knowledge help us in succeeding in our material welfare? Knowledge of economics also helps us to be efficient members of the workforce, better informed voters, consumers, savers, and investors in a democracy. 2. SCARCITY AND CHOICE 1. What do people realize going through their lives? Everyone through their lives has to make choices from among the things they would like to have. 2. What are economic goods and free goods? Most of the things we want or need are goods and services. Economists call them economic goods since they are scarce and have value to people. Other goods are not scarce – air, seawater, and sunshine – and called free goods. They are useful to people and available at no cost. 3. Why do all economic units have to make their choices? The necessity to make a choice results from the problem of scarcity of available resources. 4. What does individual choice depend on? Choices made by individuals and families depend on the size of their personal income, savings, wealth and ability to borrow. 5. What are governments and business limited by? Business enterprises and firms, in turn*, are limited by their profits, savings and borrowing power, and governments by their taxing and borrowing power. 6. What problem does everyone in any society face? The necessity to make a choice results from the problem of scarcity of available resources. For most people, scarcity is a fact of life. Scarcity means that individuals as well as societies want more than is available. 7. What is scarcity? Scarcity means that individuals as well as societies want more than is available. 8.Why does scarcity force all decision makers to arrive at best decisions? Having limited financial resources school leavers can choose a full-time or part-time job as they can’t afford to get a university degree*. Business owners cannot hire all the workers and buy all the equipment and raw materials they require. Governments face some scarcity of finances despite their power to tax. Therefore, scarcity forces all levels of decision makers*, from individuals to society, to do their best to get the most from what they have. 9.How do economists explain the essential sense of scarcity? The essential sense of scarcity is that everything we do carries value. 10.What is the opportunity cost? Economists refer to the value that is forgone every time we do something as opportunity cost. In fact, all costs are opportunity costs. We commonly think of cost as the money we spend to obtain something. But spending money on one thing is giving up the opportunity to spend it on something else. 11.What are forgone earnings? Economists describe the money that those who choose university might have earned during their years of study as forgone earnings, but not the money spent on tuition and books. Thus, the opportunity cost of going to university is the goods and services represented by the money cost of the education, plus the value of the forgone earnings. 12.Why should people compare benefits before making their decisions? We commonly think of cost as the money we spend to obtain something. But spending money on one thing is giving up the opportunity to spend it on something else. Most of economics is based on the simple idea that people make choices by comparing the benefits of options and choosing the one with the highest benefit. 13.Why does the cost of doing something have nothing to do with spending money in most cases? The cost of doing something often has nothing to do with spending money. For example, if you gave up the option of playing a computer game to read this text, the cost of reading this text is the enjoyment you would have received playing the game. Most of economics is based on the simple idea that people make choices by comparing the benefits of options and choosing the one with the highest benefit. 14.What are the two sides of opportunity cost? But there are two sides of the coin of opportunity cost. One is forgone value resulting from scarcity, and the other is opportunity. There would be no opportunity costs without opportunity. If there were only one thing you could do with your time and talents, there would be no cost of doing it. The larger the number and the more valuable the opportunities you have, the better this increases the cost of the choices you make. Date: 2015-12-17; view: 2822 |