Answer to Question #315896 in Microeconomics for Pat

Question

Explain four reasons why the study of Economics is important to society.

Answer 1

Economics is the study of how humans make decisions in the face of scarcity. These can be individual decisions, family decisions, business decisions or societal decisions. The study of economics is important tot he society for the following four reasons;

1. It promotes good citizenship: The study of economics equips the students with knowledge on budget making, financial management and fiscal policies. All these skills compounded together facilitates good decision making even in the electoral process as citizens get to make informed decisions.
2. It produces well-rounded thinkers: The study of economics produces citizens who give a critical look at every issue. Their decisions are often well thought and based on facts and data. This way, it is possible to establish what makes sense and what does not.
3. Addresses scarcity: The study of economics is all about tackling the common human problem of scarcity. Economic concepts encourage more production to meet the growing demand of goods and services by suggesting models that optimize production.
4. Globalization: The study of economics exposes one to understanding world perspectives and hence provides a useful insight into how different cultures and societies interact. This in turn promotes global trade and expands the source of production resources and markets for products and services.