What is Economics?

What is Economics?

People want to satisfy their needs. About our basic needs, we strive for safety, for belonging to groups and for self-realization. Only part of these needs are economic in nature. And only these can be met by the consumption of Goods and services. Economists refer to Goods and services than goods. Goods according to different criteria can be distinguished:

Free movement of goods, like Sand in the Sahara – available in Abundance and are not traded on markets. The majority of goods are scarce. If Sand is needed for the construction of houses, must be used for the provision of labour and machinery. Since this is associated with costs, is Sand in this example to a scarce Good. Scarce goods have to be produced and therefore have a price. Only you can be the subject of economic decisions.

Goods are secondly distinguished by their physical characteristics. In the case of Goods, as material goods production and consumption can be separated in time and space, because transport and storage are capable of. This is in the case of intangible goods differently – to put it crudely, you can have the services not on the foot fall.

According to the type of use of consumer goods and investment are different goods to. Consumer goods directly serve the purpose of need satisfaction. In contrast, investments to facilitate future production. If the currently available goods can be either consumed or invested, then the investment must be associated with a waiver of current consumption. And Investing are two sides of the same coin save.

After the period of use, a distinction fourthly, use, and consumption of goods. While consumer goods have to go through the consumption process, allow the use of goods, some of a many years of use. In a household consumption of goods to be found in the refrigerator while the refrigerator is in itself a commodity.

Finally, there are private and public goods. Private goods are individually make use of. Public goods the state provides all citizens and financed the production or provision through taxes. Classic examples are national defence or maintaining public safety and order by the police and the judiciary. Private goods are traded on markets. Markets arise because we specialize in certain activities and by exchange over a wider range of goods range of want to have. Goods markets are characterized by the fact that the households did not provide demands and company Goods or services. In most markets – such as the weekly market or the housing market – prices in the long term for a balance of supply and demand.

This does not, for example, must apply to the labour market. In the case of permanent unemployment, for example, questions about the mechanisms that complicate the balancing of labour supply of the households and the companies ‘ demand for labour.

In addition, economy subjects on capital markets: capital markets bring the supply of and the demand for physical capital and financial capital to compensate. On the stock exchange, among other things, shares and bonds are traded. Banks refinance themselves on the money market with the Central Bank. The banking system as a whole, provides businesses, government and households the liquidity for the settlement of transactions. This is done via the credit markets.

Economics is the study of the markets. Their methods are used to explain the behaviour of people in markets and to show how individual decisions be combined. In addition, Economics deals with what is the overall economic processes arising from the interaction of developments in the market and what are the sizes describe the economic Situation of the country comprehensively. The goods production as a whole, the employment or the money value of the development. In addition to the description and explanation of economic facts, the Economics also aims to give recommendations for the design of economic conditions and economic policies.

The Text is taken from the current Textbook by Thomas screens:

Many students will be confronted in the context of micro-Lectures for the first Time with the analytical economic way of thinking. This book introduces, therefore, for a bachelor’s degree relevant to the topics in 15 units of learning understandable and memorable. The author introduces each module with learning objectives and illustrated the material with numerous examples. Tasks, with sketches help during the Repeat of the fabric. Mathematical methods are used sparingly and expertly explained.