Economic is a social science about theproduction, manufacturing, distribution and consumption of products and services.It is the study of the choice of allocation resources to be able to gain satisfactorily want and needof the individuals, business firms, nations and their concerning governmentshow to organize these groups and coordinate to gain maximum output. It isconcerning with how to manage the incomes and expenditures as well as economicbiology just like the contentment of the material needs of the people. Everyeconomic system may encounter three core areas of concern; the first area ofconcern is which product will be produce in which amount. The second one iswhat kind of technology which will be used to produce. The last area of concernis who is intended to use these products.
According to these three core areasof concern it is necessary to know consumption and production.Comsumption isthe final purchase of products, services and expenditures.by individual .Consumption can also be stated as destructionof utility: Production is the fusion of the resources like human, land, mechance and immaterial statements such as planning. One of thefundamental economic problems is Scarcity.
It can be described as the unlimited wants and need of the human beingsin the universe who want to get highest satisfaction over limited scarceresources. If one want is satisfied,another want crops up. For example one of the traditional herbal remedies is becomingendangered because of the reports that plants cure the patients with AIDS thedemand of this plant is highest and this pant is over-havrvested.When economicsis studied, making decision between cost and benefit. Marginal benefit is themost pleasant satification that can be gained from consuming the supplementaryunit of a product and service. Marginalcost is the alternation of the opportunity cost that happens when the producedamount is enhanced by one unit or more.
It can be defined as the up or down ofthe produced cost relying on the production level. Marginal benefit is the mostpleasant.stisfaction that can be gained from consuming the supplementary unitof a product and services. When marginal cost is greater than marginal benefit,economics can increase net benefit by decreasing the activity.
Otherwisemarginal benefit is greater than marginal cost; most of the resources cannot bemade more. Political economics cannot be left to know about economics in awhole. Politicaleconomy is the studyof trade and manufacturing ,their concerning laws, rules and regulations ,custom, government andthe distribution of income and property of the nation. Italso studies in which way a country or a household is controlled or managed byrecognizing the political and economic sectors. Economictheory is divided into two parts: microeconomics and macroeconomics.Macro Economics is a branch of economicsthat concern with the study of structure, decision making, behavior andperformance of an economy as awhole. It includes regional, national and global economies.
It observe aggregatedindicators like price index, nation income, aggregate demand, aggregate supply,general level of prices, savings and investment, GDP, total consumption and unemployedrate as well as interrelated factor of the whole economy. The four majorobjective of macro economics are full employment, price stability, sustainablegrowth and keep the balance of payments in equilibrium. Positive macroeconomic factors generally suggest eventsthat lead to prosperity within a nation or multiple nations. For example, ifthe price of rice decreases consumer can surely spend on other product andservices more. Negative macroeconomic factors that deal with the events thatcan affect or decrease a national or international economy. It there is a civilwar or a riot or instability of the political system, the economic system ofthe concerning country may put in jeopardy.Micro Economic is a branch of economics that concern withthe study of the characteristics and behaviors of a person or a firm whilemaking decision to allocate the scarce resources and the interaction among eachperson or each firm.
Microeconomicsdescribes how individuals try to get more efficient or more productivedecisions and how individuals create best coordinate and cooperate with oneanother. The main objective is to evaluate how the market use to rely on thereasonable prices among producat.Micro-economics helps in the formulationof economic policies calculated to promote efficiency in production and thewelfare of the masses. There are three type of Economics system.- In planningeconomics, Government is the decision maker and making control for allfunctions of the whole economy. Government decide what goods must produce andhow much of each good produce will produce and how allocate to people. Some of the advantages are governmentdon’t allow monopolizing, wastful competition is avoided and can guarantee for economicsecurity, no industrial unrest because the government define andcontrols wages. Some of the disadvantages are less choice for consumer, lack ofincentive for worker, less innovation and many officials to much paper work andtoo much procedure.
– In Market economic, the government include little role if any role in the econmy.Production,distribution and investment are depend on supply and demand. The main goal isto get the maximum profit. But pure market economics cannot be existed at any country.Some of the advantages are less shortage, more choice for various goods and service,base on win- win situation, tend to competitiveness.
Some of disadvantages are lessgovernment intervention so price can be high, monopoly is allowed so the fewrich get richer and the many poor get poorer.· Amixed economy is described as aneconomic system including of a mixture of either markets and economic planning,public ownership and private ownership,or markets and economic interventionism.Gneral advantage of mixed economicsis , both government and private sector can run continuously so the economicswill develop more quickly, but government can control at major economic sectors,this can be defined as disadvantages.