Why do we study Economics? – meaning and explanations.
We study economics which is a branch of the social sciences because of the following reasons.
1. Human Wants: We study Economics because, it deals with human beings and the satisfaction of their numerous wants with their limited available resources.
2. Allocation Of Scarce Resources: As a result of the fact that the resources within the limit of human beings are not in abundance, it becomes necessary for us to study Economics and decide the alternative uses of these scarce resources in order to satisfy our numerous wants.
3. Production: We also study Economics because, it deals with the fundamental questions of what, where, for when and how to produce goods and services in order to satisfy human wants.
4. Distribution: After production, Economics goes further to study how the goods and services produced are to be distributed.
5. Hoarding: The study of Economics enables us to monitor the nefarious activities of hoarders that disturb the smooth distribution of goods ancf services and how to counteract them.
6. Consumption: The study of Economics enables us to know the pattern of consumption of goods and services in our society.
7. Budget: The study of Economics is also important because, the Economists, after studying human beings and the economic activities of the country will be in a better position to estimate a countrys total revenue, human wants and project the total expenditure in a given year.
8. To Take Part in Government: The study of Economics prepares us to take active part in the act of governance of our country.
9. Logical Thinking: The study of Economics helps to develop in us an inquisitive, well balanced and highly philosophical and logical thinking mind.
10. Economic Analysis: The study of Economics enables us to build up theories and tools of economic analysis.
11. Human Behaviour: The study of Economics enables us to understand individual differences and why people behave the way they do in their material pursuit.
12. The study of Economic theories and laws like elasticity of demand and supply and the laws of demand and supply enables agents to maximize profits subject to cost minimization.
13. The study of economics assists individuals to be independent and be practical individuals. This is possible through the application of practical approaches to emerging issues and providing solutions to daily problems E.g An educational system will stop admission of students or expansion when Average Variable Cost. (AVC) equals Marginal Cost (MC) i.e. AVC = MC because that is the optimum point at which the cost will be minimum and the output will be maximum.
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