What Is Economics?
Basically, economics is the study of human behavior and the relationship between society's resources and its output. It includes applications such as health, education, environment and gender. It also involves finance.
The main focus of economics is on the relationship between individuals and their environment. Its analysis helps in making predictions and public policy. It involves research into various topics, such as supply and demand, economic indicators, and the efficiency of production.
Economic theory involves the study of the economics of individual decisions, the behaviour of households, firms, and markets. These are studied on microeconomic and macroeconomic levels. Microeconomics analyzes how people make financial decisions, trade, and coordinate resources. Microeconomics also studies the dynamics of supply and demand, and the costs of producing goods.
Neoclassical economics is a research program that aims at building a coherent set of theories about economic behavior. The researchers also build a language that helps in explaining problems. They accept the motivation of people to diminish the scarcity of resources and to maximise their utilities from consumption.
In addition, economists seek to understand the omnipresent problem of scarcity. To explain how people deal with this issue, economists must isolate the problem from place, time, and other factors.
The term reductionism is used to explain the process of explaining economic problems. Reductionism suggests that all explanations should be found on the lowest level possible. Therefore, economists must abstract from specific ways people deal with scarcity.
Neoclassical economists build a set of concepts that help in understanding the behaviour of individuals and society as a whole. They include the concept of unemployment, which is the quantity of labour that is supplied by a company but is not hired by the company's employer.
