Component of Economics, Essay Example

Outline of Discussion:

1. The Science of Economic Analysis

a. Different Vital Elements of Economics

2. Economic Tools and Systems

a. Management Operations in Economics

3. Primary Actors in Economics

a. The Society of Operating Economics

4. Conclusion

Economics is a vital aspect of any society as they engage to manage their resources and assets to support the growing needs of the people. It could be considered that somehow it is through this system that every element in the community concerning money-flow and management of resources through proper distribution is being given attention to by administrators and other acting individuals and institutions in the society. In the discussions presented hrough the first chapters of the reading in this course, relative elements and procedures of analyzing economics have been given attention to. These elements shall be further given consideration in the discussion that follows.

1. The Science of Economic Analysis

Due to the growing rate of human population in the society today, it could be realized how the supposedly well-defined source of food, shelter and clothing has become gradually emptied thus making the said elements to human survival rather noting the scarcity that these elements have. In the first chapter, it has been defined that the process of economic analysis entails to manifest the relative connection of resources with demands and how the balancing both aspects specifically allow for the scarcity of certain resources be managed thus sufficing the needs of the people accordingly. It is further imposed through this chapter that somehow, even though humans know the scarcity of the available resources in the society today, their demands do not tend to lower down. In fact, humans are defined as individuals who have unlimited wants.

a. Different Vital Elements of Economics

Part of the process of analyzing the economic standing of a particular community is the separation between demand and supply. Understanding how humans develop their demands and how the environment’s scarce resources is managed to be able to suffice the said demands specifically entail the overall role of economics in defining the capacity of the human society to survive. To be able to develop the resources that are needed to respond to the demands of the people include labor, capital, natural resources and entrepreneurial ability. Generally, the world at present evolves under a capitalist system. Considering this fact, it could be understood that the main individuals and institutions included in the management of the resources are enjoined in the field of business. This specifically points out to the importance of the existence of entrepreneurial abilities on the part of the said actors. The way they are able to manage how to respond to the market specifically allows them to become more effective in distributing the resources more effectively. As a result to this, the market becomes a field of competing individuals who are specifically aiming to have what they want through earning from their work. Relatively, the money they earn from such conditions of working gives them the capacity to buy what they need however at times it limits them from buying what they want. Notably, it could be realized that somehow, the manner of limitation and allowance that business institutions impose on the system creates a manner of balance hence making it easier for the people to become more aware of what they can and cannot have thus balancing the release and utilization of scarce resources.

2. Economic Tools and Systems

One of the most important systems utilized in manifesting economic development is that of the principle of cost opportunity. This option of managing the economy specifically gives an important focus on how raw materials are to be used to produce particular matters that the public demands for. To determine the right pricing that shall be placed in relation to the valuation of a particular product, time and information from research should be given particular attention to. Notably, it could be realized that somehow, the assumption of a better value for a specific product is basically dependent on the importance of the product basing from the demand rate that it receives from the buying market. Specialization on specific goods that are relatively demanded by the market gives institutions and business the power to manipulate the manner by which resources are distinguishably distributed to the public for utilization and sustenance.

a. Management Operations in Economics

To be able to manage both the resources and the aspect of development that are to be imposed on particular products released in the market for relative consumption of the public, certain principles are followed accordingly. One of which is the absolute advantage. The absolute advantage indicates the power of an institution to create something new from nothing. Risky as it is, this process allows the businesses to create new wants and needs thus getting the attention of the people to wanting and desiring something they absolutely do not have yet. From this point, prototype products are introduced and later on reproduced by other organizations only with better features therefore redefining the demand of the market at the same time.

Another principle is that of the comparative advantage. From the prototype products, other organizations begin to take inspiration in making their own versions of the newly introduced item thus making it easier for comparative advantage to occur. In this phase, products are being compared between each other, they are relatively deduced and developed to fit the changing terms of desires of the market that they serve. In all these particular situations, the utilization of monetary resources in par with the utilization of the actual resources for the creation of the products is given specific attention to.

3. Primary Actors in Economics

Monitoring cash flow in the market is one of the key roles of economics. Most often than not, it is the direct exchange of goods in the market that makes such flow of cash in the society relatively affect the value of a particular product compared to another. The facilitation of the exchange of values through monetary marking specifically allows for economics to measure the capacity of a particular community to survive the challenge of modern competition imposed through a capitalist’s approach of operation. Specializations on products then spur in the market thus making specific institutions leaders in their own industries. The level of expertise they gain in assuring proper monetary use in the creation of their products makes it easier for them to manage a larger rate of cash inflow into their organization therefore assuring the continuous development of products as desired and demanded by the market.

a.The Society of Operating Economics

The operation of economics in developing communities around the globe specifically makes it possible for values exchange to occur. Notably, the pricing of the products specifically mandate the capacity of the market to accept the products as response to what they have been demanding for in the first place. This way, the release and utilization of resources become balanced if not properly managed thus allowing humans to enjoy what they demand for based on the power they have to buy.

4. Conclusion

Overall, economics entail to create a system of development that is based on the manner by which humans are able to understand what they can and cannot have depending on the capacity they have to buy. Through time, such role of economics do not only affect the cash flow, it also becomes affective on how the culture of a particular community develops including that of the definition of status that humans have depending on their power to buy. For years to come, it is expected that economics and the manner by which it analyzes the elements of finance in the society would play a great role on how people are defined according to what they can and cannot have based on their capacity to ‘purchase’ what they need in the market.

References:

McEachern, William. (2012). MacroEconomics. Cengage Learning.

Chapter 1: The Art and Science of Economic Analysis

Chapter 2: Economic Tools and Economic Systems

Chapter 3: Economic Decision Makers

Chapter 4: Demand, Supply and Markets.

Daly, H. (1995). “On Nicholas Georgescu-Roegen’s Contributions to Economics: An Obituary essay.” Ecological Economics 13: 149–54.

Samuelson, Paul A., and William D. Nordhaus (2004). Economics, 18th ed., ch. 11, “Uncertainty and Game Theory” and [end] Glossary of Terms, “Economics of information”, “Game theory”, and “Regulation.”

Bernanke, Ben and Mark Gertler (1990). “Financial Fragility and Economic Performance”, Quarterly Journal of Economics, 105(1), p p. 87