|
Economics is the social science that studies the behavior of individuals, groups, and organizations (called economic actors, players, or agents), when they manage or use scarce resources, which have alternative uses, to achieve desired ends. Agents are assumed to act rational, have multiple ends in sights (all desirable), limited resources to obtain them, a set of stable preferences, a definite overall guiding objective, and the capability of making a choice. There exist an economic problem, subject of study of the economic science, when a decision (choice) has to be made by one or more resources controlling players, to attain the best possible outcome under bounded rational conditions, in other words, to maximize value subject to the constrains imposed by the information the agents have, the cognitive limitations of their minds, and the finite amount of time they have to take a decision. So, the science centers on the activities of the economic agents that comprise society.[1] They are the focus of economic analysis.[2] Economics traditional concern is to gain an understanding of the processes that govern the production, distribution and consumption of goods and services in an exchange economy.[3] But there are purposes, (ends) such as reducing crime or protecting from it, for example, that an agent may want to spend resources on. Economics may study how the agent determines the amount of resources to allocate for this purpose, aside from the traditional concern of economics. An approach to understanding the processes of production, distribution, and consumption, through the study of agent behavior under scarcity, may go as follows: The continuous interplay (exchange or trade) done by economic actors in all markets sets the prices for all goods and services which, in turn, make the rational managing of scarce resources possible. At the same time, the decisions (choices) made by the same actors, while they are pursuing their own interest (their overall guiding objective), determine the level of output (production), consumption, savings, and investment, in an economy, as well as the remuneration (distribution) paid to the owners of labor (in the form of wages), capital (in the form of profits) and land (in the form of rent).[4] Each period, as if they were in a giant feedback system, economic players influence the pricing processes and the economy, and are in turn influenced by them until a steady state (equilibrium) of all variables involved is reached or until an external shock throw the whole system toward a new equilibrium point. Because of the autonomous actions of rational interacting agents, the economy is a complex adaptive system.[5][6] The term economics comes from the Ancient Greek οἰκονομία (oikonomia, "management of a household, administration") from οἶκος (oikos, "house") and νόμος (nomos, "custom" or "law"), hence "rules of the house(hold for good management)".[7] Political economy was the earlier name for the subject, but economists in the late 19th century suggested "economics" as a shorter term for "economic science" to stablish itself as a separate discipine aside of political and other social sciences.[8] A focus of the subject is how economic agents behave and interact and how economies work. Consistent with this, a primary textbook distinction is between microeconomics and macroeconomics. Microeconomics examines the behavior of basic elements in the economy, including individual agents (such as households and firms or as buyers and sellers) and markets, their interactions and the consecuented outcomes. Macroeconomics analyzes the entire economy (meaning aggregated production, consumption, savings, and investment) and issues affecting it, including unemployment of resources (labor, capital, and land), inflation, economic growth, and the public policies that address them (monetary and fiscal policies, and other policies). Other broad distinctions include those between positive economics (describing "what is") and normative economics (advocating "what ought to be"); between economic theory and applied economics; between rational and behavioral economics; and between mainstream economics (more "orthodox" and dealing with the "rationality-individualism-equilibrium nexus") and heterodox economics (more "radical" and dealing with the "institutions-history-social structure nexus").[9][10] Besides the traditional concern in production, distribution, and consumption in an economy, economic analysis may be applied throughout society, as in business, finance, health care, and government, but also to such diverse subjects as crime,[11] education,[12] the family, law, politics, religion,[13] social institutions, war,[14] and science;[15] because, all of these subjects have an important economic aspect to consider. Take education, for example, the time, effort and expenses incurred for procuring it, plus the foregone income and experience, can be weighted against future benefits it may bring to the agent or the economy. At the turn of the 21st century, the expanding domain of economics in the social sciences has been described as economic imperialism.[16] |
About us|Jobs|Help|Disclaimer|Advertising services|Contact us|Sign in|Website map|Search|
GMT+8, 2015-9-11 22:07 , Processed in 0.131084 second(s), 16 queries .
