Economics - Wikipedia, the free encyclopedia. For a topical guide to this subject, see Outline of economics. Economics is a social science concerned with the factors that determine the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek. Consistent with this focus, primary textbooks often distinguish between microeconomics and macroeconomics. Microeconomics examines the behaviour of basic elements in the economy, including individual agents and markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers.
Macroeconomics analyses the entire economy (meaning aggregated production, consumption, savings, and investment) and issues affecting it, including unemployment of resources (labour, capital, and land), inflation, economic growth, and the public policies that address these issues (monetary, fiscal, and other policies). Other broad distinctions within economics include those between positive economics, describing . Economic analyses may also be applied to such diverse subjects as crime. At the turn of the 2. Countries in red were in recession. Definitions. A map of world economies by size of GDP (nominal) in USD, World Bank, 2. Some of the differences may reflect evolving views of the subject or different views among economists.
Factors Affecting the Economics and Performance of. So far the medical profession everywhere in the United. Economics, Insurance and Moral Hazard. Pauly, “THE ECONOMICS OF.
- Making sense of the new transitional care codes How to maximize revenue related to the federal government's drive to reduce rehospitalizations.
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- Medical malpractice law in the United States is derived from English common law, and was developed by rulings in various state courts.
Say (1. 80. 3), distinguishing the subject from its public- policy uses, defines it as the science of production, distribution, and consumption of wealth. It enquires how he gets his income and how he uses it. Thus, it is on the one side, the study of wealth and on the other and more important side, a part of the study of man.
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This is because war has as the goal winning it (as a sought after end), generates both cost and benefits; and, resources (human life and other costs) are used to attain the goal. If the war is not winnable or if the expected costs outweigh the benefits, the deciding actors (assuming they are rational) may never go to war (a decision) but rather explore other alternatives. We cannot define economics as the science that studies wealth, war, crime, education, and any other field economic analysis can be applied to; but, as the science that studies a particular common aspect of each of those subjects (they all use scarce resources to attain a sought after end). Some subsequent comments criticized the definition as overly broad in failing to limit its subject matter to analysis of markets.
From the 1. 96. 0s, however, such comments abated as the economic theory of maximizing behaviour and rational- choice modelling expanded the domain of the subject to areas previously treated in other fields. Among economists more generally, it argues that a particular definition presented may reflect the direction toward which the author believes economics is evolving, or should evolve. These entities include private and public players with various classifications, typically operating under scarcity of tradable units and government regulation. The item traded may be a tangible product such as apples or a service such as repair services, legal counsel, or entertainment. In theory, in a free market the aggregates (sum of) of quantity demanded by buyers and quantity supplied by sellers will be equal and reach economic equilibrium over time in reaction to price changes; in practice, various issues may prevent equilibrium, and any equilibrium reached may not necessarily be morally equitable. For example, if the supply of healthcare services is limited by external factors, the equilibrium price may be unaffordable for many who desire it but cannot pay for it.
Various market structures exist. In perfectly competitive markets, no participants are large enough to have the market power to set the price of a homogeneous product. In other words, every participant is a .
In the real world, markets often experience imperfect competition. Forms include monopoly (in which there is only one seller of a good), duopoly (in which there are only two sellers of a good), oligopoly (in which there are few sellers of a good), monopolistic competition (in which there are many sellers producing highly differentiated goods), monopsony (in which there is only one buyer of a good), and oligopsony (in which there are few buyers of a good). Unlike perfect competition, imperfect competition invariably means market power is unequally distributed. Firms under imperfect competition have the potential to be . This method of analysis is known as partial- equilibrium analysis (supply and demand).
This method aggregates (the sum of all activity) in only one market. General- equilibrium theory studies various markets and their behaviour. It aggregates (the sum of all activity) across all markets. This method studies both changes in markets and their interactions leading towards equilibrium. It is an economic process that uses inputs to create a commodity or a service for exchange or direct use. Production is a flow and thus a rate of output per period of time.
Distinctions include such production alternatives as for consumption (food, haircuts, etc.) vs. Choices must be made between desirable yet mutually exclusive actions. It has been described as expressing . Part of the cost of making pretzels is that neither the flour nor the morning are available any longer, for use in some other way. The opportunity cost of an activity is an element in ensuring that scarce resources are used efficiently, such that the cost is weighed against the value of that activity in deciding on more or less of it. Opportunity costs are not restricted to monetary or financial costs but could be measured by the real cost of output forgone, leisure, or anything else that provides the alternative benefit (utility). Other inputs may include intermediate goods used in production of final goods, such as the steel in a new car.
Economic efficiency describes how well a system generates desired output with a given set of inputs and available technology. Efficiency is improved if more output is generated without changing inputs, or in other words, the amount of . A widely accepted general standard is Pareto efficiency, which is reached when no further change can make someone better off without making someone else worse off. The production. In the simplest case an economy can produce just two goods (say . The PPF is a table or graph (as at the right) showing the different quantity combinations of the two goods producible with a given technology and total factor inputs, which limit feasible total output. Each point on the curve shows potential total output for the economy, which is the maximum feasible output of one good, given a feasible output quantity of the other good. Scarcity is represented in the figure by people being willing but unable in the aggregate to consume beyond the PPF (such as at X) and by the negative slope of the curve.
This is because increasing output of one good requires transferring inputs to it from production of the other good, decreasing the latter. The slope of the curve at a point on it gives the trade- off between the two goods. It measures what an additional unit of one good costs in units forgone of the other good, an example of a real opportunity cost.
Thus, if one more Gun costs 1. Gun is 1. 00 Butter. Along the PPF, scarcity implies that choosing more of one good in the aggregate entails doing with less of the other good.
Still, in a market economy, movement along the curve may indicate that the choice of the increased output is anticipated to be worth the cost to the agents. By construction, each point on the curve shows productive efficiency in maximizing output for given total inputs. A point inside the curve (as at A), is feasible but represents production inefficiency (wasteful use of inputs), in that output of one or both goods could increase by moving in a northeast direction to a point on the curve.
Examples cited of such inefficiency include high unemployment during a business- cyclerecession or economic organization of a country that discourages full use of resources. Being on the curve might still not fully satisfy allocative efficiency (also called Pareto efficiency) if it does not produce a mix of goods that consumers prefer over other points. Much applied economics in public policy is concerned with determining how the efficiency of an economy can be improved.
Recognizing the reality of scarcity and then figuring out how to organize society for the most efficient use of resources has been described as the . Different individuals or nations may have different real opportunity costs of production, say from differences in stocks of human capital per worker or capital/labour ratios. According to theory, this may give a comparative advantage in production of goods that make more intensive use of the relatively more abundant, thus relatively cheaper, input. Even if one region has an absolute advantage as to the ratio of its outputs to inputs in every type of output, it may still specialize in the output in which it has a comparative advantage and thereby gain from trading with a region that lacks any absolute advantage but has a comparative advantage in producing something else.
It has been observed that a high volume of trade occurs among regions even with access to a similar technology and mix of factor inputs, including high- income countries. This has led to investigation of economies of scale and agglomeration to explain specialization in similar but differentiated product lines, to the overall benefit of respective trading parties or regions. Among each of these production systems, there may be a corresponding division of labour with different work groups specializing, or correspondingly different types of capital equipment and differentiated land uses. More total output and utility thereby results from specializing in production and trading than if each country produced its own high- tech and low- tech products.