The Importance of Economics and How Our Lives Revolve Around it
Every aspect of our lives are related to economics, here’s how!
Throughout the many years that humans have inhabited the Earth, economics has always played a major part in our lives. Whether it be in obvious or subtle ways, everything we do is related to economics. But what is this social science called economics?
Economics is the study of how people interact with things of value. For example, the most common places economics is apparent is in production, distribution, and the consumption of goods and services. Think of it like this. Have you ever bought anything? Chances are you have! And by doing so, you contributed to your country’s economy or level of wealth and resources. Whether it be buying groceries, clothes, electronics, or even getting a fresh trim, you the “consumer” are always contributing to your country’s economy.
When I say economics ties into our daily lives, I mean everything, whether it be positive or negative aspects of our lives. For example, in the lives of students, one of the most common negative aspects is debt, with the average time it takes to pay off debts in the United States being 20 years!! However, there is a solution. By developing a better understanding of economics, students will be able to make more informed financial decisions, allowing students to save more. As a high school student, I can say that I’ve made several poor financial decisions, but now, as I begin to understand economics, I feel more confident in my financial choices.
Speaking of choices, have you ever made a choice between two things? Chances are you have, and by doing so you did something related to economics called Opportunity Cost, which lies within the microeconomic branch. This is when a person decides to do something over another, therefore, giving up on the alternative option. High school students in particular make high opportunity cost choices every day! For example, instead of being a responsible student and studying for my math test, I decided to go to a football game instead and by doing so, I lost the ability to get a higher grade on my math test.
Another way economics affects our lives is through the stock market. Now, you’ve probably heard your parents or other adults talking about how the stocks are down. But how are economics and the stock market-related? Well, it’s simple. The stock market reflects the economic conditions of an economy, so if there is a period of economic growth then the price of shares in a specific company will rise. Not only does it show the proportional relationship between stocks and the economy, but it also predicts recessions. This is how investors like Warren Buffet and Dave Portnoy make their millions. So, if you’re running low on cash and want to buy a new pair of Jordan 1’s I highly suggest learning about economics so you can invest and make money!
Economics is all around us, in households, businesses, societies, and governments around the world. It helps provide valuable knowledge for making decisions in our daily lives, whether it is financially related or not. As you get older you begin to realize the importance of economics and how it affects our lives and the lives of everyone around us. Whether it be running errands with your parents, going out to the movie theatre with your friends, or buying new clothes, everything we do is related to economics. Therefore, by realizing how much of our life is impacted by economics and developing an understanding of this social science, it will allow us to make informed decisions throughout our lives that maximize productivity and profits.
