Everyday in our live we get to see something , somewhere and somehow related to Economics. Think about the cup of coffee your are having every morning, or the amount of sugar you are adding. About the telephone service you are using or internet package that enables me to write this blog !!! How are all these products and services allocated and distributed ? Several processes and decisions must have been made before you receive the last product. So all that we are consuming everyday in our lives must have gone through a process that provides us the comfort or satisfaction for a better standard of living !! So here comes the part ! Yes we need to understand what Economics is about and how it works. How does individuals and societies choose to these limited resources and use them efficiently so as to fulfill our needs.
Now there is a difference between needs and wants. To add humor with my example, we need food, clothing and shelter to live . But we want Play-station, BMW and a home in Switzerland for our leisure. Note that the need part is much lower than the want part which cant fulfilled. Why ? Obviously , my wants just doesn’t ends up at these 3 desires i mentioned. I would WANT something new in my life everyday !!! … Everyday ! Okay lady i need to tell myself to be in my limits … Limitss !
Now it very easy to assess that almost all the resources are limited around the world because of which we need decide how cost effectively we can produce and distribute them. So when we talk about individual entities, say an individual, a firm , a marketplace, which deals with limits like limited time, budget and ability to produce, directs us to MICROECONOMICS.
Apart from the proper definition of microeconomics with deals with individual entities. It is also concerned with effective usage of the natural limits we have as well as the process of allocating them or deciding whats best for whom !
So yes! The concepts in this branch aren’t just a piece of cake especially when you cant easily apply them over the economy. And you end up making specific models with which you determine the effects of one variable while keeping the others constant, knowing the fact that this too isn’t practically possible and the consequences is rather an estimation of the expected or unexpected ….
How do you make tradeoff in your life . At this very moment have you thought that you could be doing something else instead of reading my blogpost ? yes ! You probably must have and if not, than you should. Because people also need to understand whats best for them and for their business. Here comes Microeconomics again, Will You hire more workers or buy new equipment ? Would you prefer to save money or go shopping ? Would you bother to take a degree in the said subject or take a vacation? . It seems that you have been making choices. Choices that assists people either as a consumer or producer…
So yeah ! I think i really need to study Microeconomics to decide whats best for all in general and for me in particular….