Economics is the study of our everyday behavior. The goal of economics is to understand why people make certain choices, and how those choices affect society at large. I’ll use myself as an example! Let’s say I’m getting ready for class in the morning, and I realize that I need a snack before leaving the house. Do I get a bowl of cereal or some instant oatmeal? Well, if you ask me, instant oatmeal sounds much better! But if you ask Mom she might disagree with me…why? Because Mom knows that eating healthy food helps your body function properly. Ultimately though, it’s up to me what I eat because my preferences are what matter most in this case! Right now it looks like oatmeal won’t cut it for breakfast this morning…I think I’ll grab some cereal instead. How did mom know to tell me about eating healthy food though? It just so happens that doctors have studied nutrition extensively! Nutritionists have found out many things about specific foods and how they affect your body over time. The inflation rate is another example of economics in action. The inflation rate measures how much the prices of goods and services increase over time. The government tracks this number so they can keep inflation at a healthy rate. If the price of food goes up, for example, people might stop buying it because it’s too expensive! That would be bad for our economy…because we need to buy food in order to survive!
Why Do We Need Economics?
I think that we need economics because it helps us understand the world around us. If we knew about our economic decisions then we might make better choices in life (and save money!). We also use economics when deciding how to improve our society and environment. For example, if we want more people to bike down the street instead of driving their cars, then maybe we could put bike lanes all around town or add bike racks near busy places like schools or grocery stores! There are many other examples where economics comes into play such as taxes and tariffs (basically taxes on imports) which help support local businesses by making foreign products more expensive.
What is the Market?
The market is a way that buyers and sellers can interact with each other. The market is full of people buying and selling things every single day! We are all “part” of the market when we buy or sell something. It’s important to understand how the market works so you can make better decisions when you buy or sell something! Let’s say your parents want to buy a new TV for their bedroom. They didn’t know what kind to get, but they saw one in an advertisement at their local store that seemed really nice! After they bought it though, they realized that it didn’t have enough HDMI ports for them to connect everything into it. They decided then that maybe they should have done some research before buying the TV…but oh well, mistakes happen! Part of being in the market means learning from your mistakes so you don’t make them again if possible…which brings us back to me getting ready for class in the morning. I’m thinking about eating oatmeal again today instead of cereal because I was watching this video about calories on YouTube last night and I learned some interesting things: Oatmeal has more calories than cereal (I knew this already), but oatmeal also has vitamins and minerals while cereal doesn’t (so my body will be healthier with oatmeal!). But wait. Oatmeal has more calories than cereal, but oatmeal is healthier than cereal. Does that mean that I should eat oatmeal instead of cereal every morning? Well, maybe…but it’s important to remember that what you eat today affects your body tomorrow! If I eat too much oatmeal in the morning, then dinner might not be enough to satisfy me later in the day. So I’ll have to take my breakfast into consideration when I plan my meals for the day!
What is Money?
Money is something we all use everyday…so why don’t we know much about it? In fact most people don’t think twice about using money every single day…which can be a problem if you don’t understand how it works. That’s where economics comes in again! Just like any other thing on this planet, money has a history and an origin story. It also serves many purposes beyond just being “currency”. For example: banks use money as a means of storing wealth (for investors), companies use money as a way of investing for their future (through loans and stocks), and government uses taxes on our income to pay for public services such as police departments or fire departments! There are many different kinds of money used throughout history including gold coins which were used before paper currency was invented so people could trade goods more easily.
Economics is a very useful tool for understanding our world, and it can even help us make better decisions in life! I would like to thank you for reading this post, and I hope that you learned something new today!