Economics is a science which difficult to define. If some people are asked about what their definition of economics, they will have some difficulty in defining the subject. They will give these following opinions, “It is study of money,” “It has to do with business, profit and loss, and so forth,” “It is about how society chooses to distribute wealth,” or “It is the search for mathematical pattern that describe the movement of prices,” (Callahan, 2004). Israel Kirzner points out that even among professional economists, there are “a series of formulations of the economic point of view that are astounding in their variety.” (Kirzner, 1966, as cited in Callahan, 2004).
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Similar to definition by Gans et al. (2009), Mises (1962 as cited in Callahan, 2004) also emphasises his definition on human action. Human action is purposeful behavior to reach goals (Mises, 1962, as cited in Callahan, 2004).
In my point of view, economics is a study of human behavior, which can be individuals, groups, or organisations, when they face the resources scarcity. That definition is the basic definition of economics. If we see economics nowadays, it is so much more complicated, it include individuals to even every country worldwide.
Human behavior in economics is based on scarcity. For example, if one does not have food to eat, he will find a way to get the food. In order to get the food, he needs money to purchase it. To have the money, he have to work. So, the scarcity here is the need of food and the behavior is work to get the money, which is used to purchase the food.
Besides working to get the money, others can plant some crops then sell it in a higher price. We can see here that each person will has different behavior or action to the scarcity. These different behaviors create some different positions in the economy system. The most basic ones are producers and consumers. Producers are ones who produce products needed by others, while consumers are ones who buy the products needed from producers. Each person has to act as both producer and consumer. No one can only produce without consume, because each of us has our own needs that have to be fulfilled by other producers. In addition, no one can only consume without being a producer. To consume, it needs money which can be owned from working or selling goods (or being a producer).
Economics is a complicated science because each economy agent (can be individuals, group, or organisation) behaves in different way in facing resources scarcity. They also have different needs and different taste. These aspects create many concepts in economics, such as demand and supply, price elasticity, welfare, and so on. All of these concepts are divided into two big classifications, which are micro economics and macroeconomics.
Economics is important in my life. I have some goals in my life which I want to pursue. Some of them are having a happy family and living prosperously. In order to reach those goals, I need a quite huge amount of money, because a family definitely needs money to fulfill their daily needs to survive and be happy. And to fulfill those needs, money is needed. How to get the money? The understanding of economics is the answer to that question.
I can examine the importance of economics by positioning myself as a consumer and producer. On one hand, being a consumer, understanding economics can help me to use money wisely. For example, by using the demand and supply concept, I know...