Trade n-1) the business of buying and selling goods

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What is economics?

Economics is a social science studying economy. As a scholarly discipline, economics is two centuries old.

Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people.

Since every economic decision requires a choice, economics is a study of tradeoffs.

The economy is a system managing and controlling resources of a country, community or household.

Like the natural sciences and other social sciences, economics attempts to find laws or principles.

Economics studies the way people deal with a fact that life resources are limited, but our demand for them certainly is not.

Economics tried to find laws or principles by building models. The predictions of the models form the basis of economic theories. Then the predictions of the models are compared with the facts of the real world.

A knowledge of economics, the study of how people and countries use their resources to produce, distribute, and consume goods and services is important for everyone now. Our understanding of economics will influence how we earn a living and help us make better economic decisions.

We can classify branches of economics according to their approach or methodology. The very broad division of approaches is microeconomics and macroeconomics.

Microeconomic analysis offers a detailed treatment of individual decisions about particular commodities.

Macroeconomics emphasizes the interactions in the economy as a whole.

The distinctions between macro-and microeconomics is a matter of convenience. In reality, macroeconomics outcomes depend on micro behaviour, and micro behaviour is affected by macro outcomes.

Advertising is the act of making a product, a service, a job vacancy, an event, etc. publicly known. It is a non personal form of communication through paid means of information distribution with a clearly stated source of financing.

There are four major economic goals that are generally accepted. These goals are:

full employment;

price stability;

economic growth;

an equitable distribution of income.

In each case, the goal itself is formulated through the political process. The economist’s job is to help design policies that will allocate the economy’s resources in ways that best achieve these goals.

All the firms can be grouped into “wholesalers” and “retailers”. The wholesaler buys goods in bulk from producers and sells them in small quantities to retailers. In doing so he helps production, relieves manufacturers and retailers of the risk of a fall in demand, e.g. fashion changes. The holding of stocks is in itself a valuable economic function evening out prices resulting from temporary changes in demand and supply.

. The wholesaler buys goods (furniture, clothes, footwear, food staff) in bulk, thus relieving the manufacturer of various risks.

The retailer buys goods in small quantities and always runs the risk of a fall in demand.

Trade n-1) the business of buying and selling goods

Opportunity cost is the forgone benefit of the next best alternative when scarce resources used for one purpose rather than another. The term ‘alternative cost” refers to the most desirable of the alternatives not chosen.

Opportunity cost is the value of time, money, goods and services given up in making a choice.

Opportunities are chances to improve your situation. Opportunities, however, may cost you something. If you spend time watching television, you cannot spend the same time at the library

Trade-offs involve accepting or choosing less of one thing to get more of something else. Individuals who choose one good or service instead of another, or more of thing and less of another, are making a trade-off.

Evaluating trade-offs, when done carefully and systematically, involves comparing the costs and benefits of decisions that affect different groups within the economy

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The law of comparative advantage states which goods individuals should produce.

The laws of demand and supply and the connection between the cost of production and supply were first worked out by D. Lardner (1793 – 1859), an Irish professor of philisophy at the University of London.

Markets are institutional arrangements that enable buyers and sellers to exchange goods and services.

Advertising is the act of making a product, a service, a job vacancy, an event, etc. publicly known. It is a non -personal form of communication through paid means of information distribution with a clearly stated source of financing.