Understanding the Economic Problem of Today
According to the Oxford English dictionary, economics is the branch of knowledge concerned with the production, consumption, and transfer of wealth. Economics can also be described as the analysis of production, distribution, and consumption of goods and services. In other words economics support mostly everything humans do and also studying the way people and the markets interact. However, the economy exists to provide people or the society with products, goods and services they need to have to live. Hence, we face various problems today and economics can be used to understand and answer most of the problems faced in the society. Understanding today’s problems will relate to economics. This poses questions on how best to utilize economics to understand today’s problems. Understanding today’s problems requires some knowledge of basic underlying economics concepts and principles; though societal concerns are broad, however, narrowing it down to a few like, production, how to produce and for whom to produce, government allocation of scarce resources is directly linked to the forces of supply and demand, the above analysis do go further to influence the prices of goods and services, healthcare cost, consumption and marketing, real-estate, interest rate, population distribution, inflation, unemployment, economic recessions, poverty and economic growth. All these individual and societal problems can be linked to the bourgeoisies and proletarians of today, how we can understand today’s problems differentiating between the two different classes, how we can understand todays problems having the knowledge of economics associated with real-estate and also knowing who needs whom more amongst the bourgeoisie and proletarians in the economic level at the same time linking it to understanding of todays problems.
In order to understand today’s problems; one should have some or vast knowledge on micro and macro economics, decision making must be appreciated as it relates to current problems faced by society and individuals. Micro economics is a study of economic behavior of individual, or human behavior, decision making process in relationship to the impact on overall economy, in other words it studies small-scale economics or economic decisions, this is concerned with the factors that affect people’s economic choices and decisions, and how individuals respond to changes in price and limited resources this also explains why and how different goods dictate different values, how producers and consumers come together to exchange goods and services at a given price. It also helps to understand the relationship between producers and consumers, it deals with how much is produced, what to produce, and for whom to produce for at a price. On the other hand macro economics is concerned with the economy on a national and international level, it is a large-scaled economics, it is primarily concerned with the national income through the analysis of major economic factors. It is also concerned with unemployment , levels of inflation, interest rates, government policies and economic growth. Macro and micro economics variables basically help to understand certain processes in economics and exposes individuals, firms and society to make informed decisions when allocating limited resources. Nations around the world are faced with various economic issues of resource allocation, which is the problem of how to best use available limited, or scarce, resources. The economic problem results from the endless needs and wants of individuals, organizations and the society in general at the expense of limited economic resources available to meet these unlimited needs and wants.