What is Economics (Y11)

Date: 2023-02-01

Mostly the same as what-is-economics. In fact it is exactly the same. What a wondrous consequence.

Economics is a study of how entities make choices.

Microeconomics and Macroeconomics

Microeconomics and macroeconomics are two of the largest subdivisions in the study of economics. Microeconomics refers to the observation of individual markets, and is concerned with things like…

• consumer decision making and utility maximisation
• firm production and product maximisation
• individual market equilibrium
• effects on government regulation on individual markets
• externalities and other market side effects

There are two types of goods. Free and economic. Free goods incur no cost to the economy, whereas economic goods do.

Positive and Normative concepts

Economists think about the economic world in two different ways:

• One way tries to describe and explain how things the economy actually work (positive economics)
• The other way deals with how things ought to work (normative economics)