An Introduction To Economic Concepts
An economy is a space of specialization, production, exchange and distribution, not dissimilarly, to a micro-site or network. In simple terms, it is defined as a social field that emphasize the practices, Discourses, and materials expressed by the production, utilization and control of scarce assets. It is generally conceived as a system where economies form their foundation. The term “economy” has come to be associated with various concepts in business life, but in fact it has nothing to do with the physical nature of a firm.
The scope of economics covers many different arenas of economic activity. It is used to study market prices of goods, services, capital goods, financial activities, and governmental policies and institutions. Economics deals with different economic aspects such as production, transfer, consumption and saving, price determination, technology, micro-economics and macroeconomics. All these aspects influence the functioning of economies and thus it can be said that economics is basically a study of how people interact to produce economic goods, which in turn leads to changes in interpersonal relationships and society at large. This also forms the theoretical base for various other branches of economics such as microeconomics, which studies the interactions of individuals within firms.
Economists studying the subject matter attempt to understand the process through which economic goods and services are produced, how they are traded, where the prices are set, how the profits are earned, what role the government plays, and how various economic policies affect the economy. Economics considers all these issues in a comprehensive way in an attempt to understand the nature of economies as a whole and how they interact with one another. By doing this, the economists helps the society to decide wisely on the supply of scarce resources and how they can be used effectively. This helps the economy to flourish. In short, economics deals with the study of the interaction of individuals and organizations within a market economy towards the attainment of collective goals.