Saturday 13 June 2015
Tuesday 26 August 2014
daily econ 1 | What is Economics?
What is Economics?
Economics is a social science and can be defined as the efficient allocation of scarce resources to accommodate for unlimited human wants.
The basic economic problem is that there are infinite human wants but finite resources to provide for them. Economics is therefore the study of how these finite resources can be allocated efficiently considering externals factors as well.
In Economics, we assume that all parties act rationally - this means that a firm, for example, will act to achieve the best, most efficient outcome.
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