It's Economics!

Lawrence J Peter once said "An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today."

You might have come across a situation in a market store where you choose to buy either an Ipad or a Samsung Tab. You have been constantly hearing about inflation, the unemployment rate, austerity measures on Greece, and the Facebook's IPO. Does all this have any influence on the decisions and choices you make?
its economics,inflation
I will be explaining in the upcoming editions anything and everything I've learnt, that can help you to understand how the world around you has progressed and is progressing.

To begin with, Economics is concerned about the production and consumption of goods and services. It's about understanding scarcity (the excess of human wants over what can actually be produced), the tension between limited resources and unlimited wants and needs, how resource have been distributed, whether among different individuals, different regions of the country or different countries of the world. It studies people at work, producing the goods people want and people as consumers, buying the goods that they themselves want.

In short, it studies anything to do with the process of satisfying human wants. Another way of looking is in terms of demand and supply. Demand on one hand, is related to wants - goods and services where free, people would simply demand whatever they wanted. Supply, on the other hand is limited. It is related to resources. The amount that firms can supply depends on the resources and technology available. In an economy as a whole, the aggregate demand will need to balance against the aggregate supply. For example the demand and supply of DVD recorders, cars, newspapers and holiday packages should be balanced. But what happens when potential demand exceeds the supply, how are actual demand and supply made equal Economics studies this process. It studies how demand adjusts to availa-ble supplies, and how supply adjusts to consumer demands. (Sloman J.,2006,p.4-8)

Macro and microeconomics are the two vantage points from which the economy is observed, where 'macro' means big and 'micro' means small.

Where Macroeconomics is concerned with the economy as a whole, it is also with the total output of the nation. For example, the overall level of prices, the tons of rice produced or exported by a country, inflation, recession etc.
After observing the society as a whole, Adam Smith noted that there was an "invisible hand" turning the wheels of the economy: a market force that keeps the economy functioning. However Microeconomics looks into the level of individual and firms in the economy (For example: Supply of Clothes, no. of tons of wheat produced per farmer etc.)It involves choices as: What goods and services are produced in what quantities, how things are going to be produced and for whom are things going to be produced.

To sum it all up, Economics deals with choices and opportunity cost. Where your opportunity cost is the highest alternative you have given up in order to do an activity. In simple terms, your opportunity cost of reading this article could be giving up your 5 minutes of sleeping hours. Stay Intact for More Absolute Advantages from Rheana's Review until the Next Edition. Until then, keep your Thinking Caps On!!

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Any facts, figures or references stated here are made by the author & don't reflect the endorsement of iU at all times unless otherwise drafted by official staff at iU. This article was first published here on June 2012.
Rheana John
Rheana John is a contributing writer at Inspiration Unlimited eMagazine