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04/25/2024
An IB Economics tutor in India from IBGA says, “The social science of economics examines how individuals make use of finite resources to fulfill their seemingly limitless needs and desires.”
Since it is concerned with how people engage and the reasons behind their behavior, you will note that it is a branch of social science. It is similar to psychology in some ways because we discuss and decide based on our perceptions of the motivations behind people's actions.
Economics is one of the IB courses in India from the domain of social science is the systematic and disciplined study of society and its structures, as well as how and why individuals and groups within society behave in certain ways. It encompasses economics, psychology, sociology, anthropology, and political science.
Economics in the name of social science
Economics, sometimes known as the science of scarcity, is a scientific investigation of who owns, uses, and exchanges limited resources.
Because it applies scientific methods to develop hypotheses that provide light on how people behave as individuals, as groups, and as organizations, economics is recognized as a social science. Economics makes an effort to understand the economic behavior that results from the exchange of limited resources.
Like other experts in social science, economists are not equipped to conduct controlled investigations in the same manner as biologists and chemists. As a result, economists must use a variety of techniques, mostly centered on inference and observation as well as the creation of abstract models.
In the last century or two, the fields of social science have become more specialized as they have developed.
In the case of economics, this is evident in the growth of numerous subfields of study, such as micro- and macroeconomics, international economics, development economics, industrial and financial economics, pure and applied economics, and so forth.
The goal of comprehending exchange, including how it occurs, why it occurs, and how it affects participants' costs and rewards, is what unites them all.
Microeconomics
Basic components of the economy, such as markets and individual agents, as well as the interactions between them and the results of those interactions, are examined in microeconomics.
Households, businesses, buyers, and sellers are a few examples of individual agents. As an illustration, businesses sell items to families, and households supply labor.
Macroeconomics
The field of macroeconomics examines the economy as an organization consisting of manufacturing, spending, saving, and investment, as well as the factors that influence it. These factors include the use of labor, capital, and land resources, currency fluctuations, economic expansion, and government initiatives that affect these components.
The central concepts
Well-Being
Equity and equality are not the same thing. The same or comparable economic results for various groups or individuals are referred to as equality. Equity is connected to the normative idea of fairness. Any statement that assigns a value is normative.
Nobody can "prove" that a remark is true or false; it is the speaker's opinion in this case. In economics, the term "inequity" (unfair) is frequently used to describe how income, wealth, or even opportunities are allocated in society.
Regardless of culture or economic structure, injustice and inequality are important problems that exist both inside and across cultures (e.g., Saudi Arabian men and women) as well as between cultures (e.g., Zimbabwe and Denmark).
Interdependence
To achieve their financial goals, consumers, households, companies, and governments interact with one another across national borders.
The more these organizations interact, the more interdependent they are; the world economy is extremely interdependent, and choices made by one economic actor can have numerous unintended repercussions for other economic players. Interdependencies should be taken into consideration when carrying out an economic analysis.
Effectiveness
Efficiency can be measured as an input-to-output ratio. Efficiency can be defined as the ability to produce a given amount of output with an identical quantity of inputs or a greater amount with a similar quantity of inputs.
Allocative efficiency is the process of maximizing the use of limited resources to produce commodities and services in the most advantageous combinations for society while reducing resource waste.
Option
Because resources are limited and many demands and wants can't be satisfied, economics is a discipline of choice. As a result, decisions must be taken, and opportunities present themselves each time a decision is made.
The IBGA’s IB tutor in Delhi says,” Governments, corporations, and households must constantly choose between options that compete with one another. Economics studies the present and future effects of these decisions. “
Intervention
In economics, intervention refers to the involvement of governments to address perceived market failures (taxation and redistribution, for example). To discuss more on this employ the experienced expert IB teachers in Gurgaon from IBGA.
Even while markets are the best at allocating limited resources, they frequently fall short of achieving many societal objectives, including sustainability, equity, and economic well-being.
Even if policymakers and economists dispute much on whether government involvement is necessary, what kind of intervention to deploy, and how much to do, these failings may be justified reasons for government action. The benefits of intervention vs the free market are hotly contested topics.
