Why is it important to understand economics

Hi this is a 2-page paper, like a discussion that will focus on why is it important to understand economics.

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Why It Is Important to Understand Economics

Economics is a social science that studies how governments, societies, businesses, households and people apportion and manage their scarce resources. It is an evaluation of how human beings make decisions when faced with scarcity of resources. Naturally, resources are limited in supply. For instance, land only exists in a finite amount. Individuals, on the other hand, have reoccurring needs. The satisfaction of these needs relies on the scarce resources. Therefore, people have to prioritize the most pressing needs and aim at satisfying as many needs in accordance with the available resources. The science of Economics is concerned with these processes.

One of the reasons why it is essential for people to understand economics is that it can help people solve many of the problems being experienced by most countries in the world. Challenges such as unemployment, global warming and conflicts in countries such as Somalia, Afghanistan and Syria all require the study of economics to address them. Most of the global challenges arise from human conflicts on the utilization and management of resources. It could be conflicts from such as divided opinions on mining of oil or allocation of land and boundary disputes such as in Israel and Palestine. Either way, the scarcity of resources usually result in conflicts among people or different parties. Understanding economics is an important step in solving such challenges.

All people are consumers of a wide variety of products. Consequently, understanding economics can help one to understand a variety of issues regarding scarcity of raw materials and their distribution. A person who understands economics is well versed in dealing with scarcity of resources. This is because such a person can understand the consequences of a shortage of resources such as oil and gas.

Moreover, economics equips a learner with the knowledge of opportunity cost during the prioritizing of needs according to their urgency. Closely related to this is that understanding economics presents a person with the ability to formulate an analytical approach that enables a person to comprehend the various factors that determine the prices of different commodities. The influences of demand and supply, which are the primary determinants of price can only be understood via a comprehensive understanding of economics. This way, a person can tell the indirect factors that lead to scarcity of resources.

Understanding economics also gives a person the knowledge and understanding of the internal challenges facing the economy. The primary role of economists is to investigate and understand issues such as unemployment, poverty and low economic growth. Closely related to this is the effect of other social disciplines such as education, religion and politics on the economy of a country. Additionally, a student of economics can understand how such factors affect the economy; with issues such as immigration and birth control being of high concern in the recent years.

Finally, another reason why understanding economics is beneficial is that this knowledge can help a person gain employment in business-related careers. Economics is a career discipline. A student who has gained knowledge and skills in this discipline can work as actuaries, accountants, financial analysts, bookkeepers, budget analysts and market research analysts. A person can also secure employment as a tutor, teacher or lecturer of economics in various institutions and thus perpetuate knowledge of economics. Evidently, understanding economics benefits both the individual and his/her society.

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