Essay: What is Economics

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Sample Essay

4 works cited

Length: 569 words

With the help of lecturers and speakers, a lot of information has become available regarding economics; what it is and how it is applied. Economics is the study of understanding the function of different economies. It also studies how scarce resources should be allocated in the best way possible due to the various uses these resources have. One of the major problems in society is scarcity. The demand for resources is much greater than the amount of resources available. Economics consists of two areas which can be studied; Micro Economics and Macro Economics.

Microeconomics studies the economy as an individual; the various segments which make up the larger society are studied separately. Macroeconomics however studies the collective economy as a whole (Madura). The primary goal of macroeconomics is to study how consumer spending affects the output in society, the employment of people and the price charged for various goods.

To be able to understand economics completely, we need to understand that the resources available to make goods and provide  services have certain limitations. The resources which are made use of to manufacture goods and services are known as the factors of production. The factors of production consist of labor, land, entrepreneurship and capital. Let’s look at these individually.

Labor are the people who comprise of the workforce. Not only does labor refer to the number of people who comprise of the workforce, it also refers to the quality of the workers employed (Mandura). Land is the area where the goods and services are produced. The third factor of production which is capital is the…

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