Economics

Economics can be defined simply as the study of the economy. A more in dept definition would be "the social science that deals with the production, distribution, and consumption of goods and services and with the theory and management of economies or economic systems". (www.answers.com). Microeconomics and Macroeconomics are two issues that have a major influence on society. Macroeconomics is the study of the total effect on the national economy and the global economy; basically these choices influence whole groups or an entire demographic. Microeconomics is the study of the choices that individuals and business make. An example of macroeconomics can be how the interest rate rising effects consumers buying houses less, which affects the construction business and causes the construction workers to spend less money in the economy, a rising interest rate also affects the amount of loans consumers are willing to take out. An example of microeconomics can be the decision that a company makes to sell Nike or Reebok athletic shoes. Together these two kinds of economics run society. The actual study of economics only arises when human wants are more than the resources available to satisfy them. Scarcity is one of the major topics that effect economics, for example if go shopping and you have $100, but you see a nice pair of shoes for $100 and an outfit for $100 also, then you are faced with scarcity. Scarcity and the choices behind it are the backbone for society and the economy.

Both macro and microeconomics are very powerful tools that can shape the way the world runs and operates. Eventually, economic issues make their way to your pocketbooks that is when most people really start caring. For example, when gas prices rise 6 cents in one week and you are wondering why. Lots of everyday issues that we encounter have their roots in economics. Microeconomic values set the foundation for businesses all across the world. Macroeconomic policies shape the destinies of nations and countries.

Microeconomics is a key tool in everyday society that we all encounter, it is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. The taxes, regulations and other programs the government has are everyday examples of microeconomics. The decisions that these individual businesses make due to these regulations and taxes is why microeconomics are an important tool in society. For example, if the government raises taxes on a particular good, then the business will also raise the price to the consumer, who is purchasing the good. Supply and demand are two factors that focus on microeconomics. Demand is the relationship between the quantities of a good or service that consumers desire to purchase at any particular time and the various prices that can exist for the good or service. For example, microeconomics would look at how a specific company could maximize its production and capacity so it could lower prices and better compete in its industry. Supply is the relationship between the quantities of a good or service that sellers wish to market at any particular time and the various prices that can exist for the good or service. An example of supply and demand can be thought of as 6 people in a market; Jane is willing to pay $10 for a bag of chips, Bob is willing to pay $20 for the same bag, Mike is willing to pay $30. Also, you have Fred is willing to sell a bag of chips for $5, Chris is willing to sell chips for $15, and Mark is willing to sell chips for $25. There are many possible trades that would be mutually agreeable to both people,