Example Of A Personal Account Of How Economics Affects Your Life Essay

The word economics originate from Greek words “Oikos” that means home and “Nomos” that means management. Economics can be understood as home management. The head of the family faces the challenge of managing the unlimited needs of the family within the limited resources of the family. The society can be considered as a family that faces the challenge of managing the needs of its members within the scarce resources. Therefore, Economics the study of the how human beings manage the scares resources to meet their needs in life. Adam Smith defines Economics as the study of nature and causes of nation’s wealth. In simpler terms, Smiths implies that Economics is the study of wealth. The critical point in Smith’s definition is the creation of wealth. Several researchers have come up with a variety of definition of Economics. However, the most comprehensive definition is modem growth-oriented definition by Professor Samuelson. The main features of his definition are resource distribution, allocation pattern, costs and benefits of allocation model, and trends in growth.
Economic theory can be categorized into tow broad areas namely microeconomics and macroeconomics. Microeconomics is a branch of economics that is concerned with the decision making by micro-units of an economic system. On the other hand, Macroeconomics is a branch of economics is concerned with the magnitude of the entire economic system. Economic study has had a significant impact on my personal life. Financial resource especially for students is in most cases limited. Therefore, one will always be faced with the problem of making decision how to spend the limited cash at his or her disposal in order to satisfy his or her unlimited needs. The task of personal finance management has not been an easy one on my side. However, over time I have developed principles of personal financial management. Planning has been my most important step in taking control of my finances. Trade-offs in my budget plan are the core reality of the economic life. A dollar spent on an item means giving up spending that dollar on something else. This reality in spending allows me the opportunity to choose that which will best satisfy my needs and at the same time it is cost effective.
The approach of quality life is based on satisfaction of one’s preferences within the constraints they possess. Naturally people will select those things that will enhance their quality life. However, some needs have grave consequences if not prioritized. My budget helps me to identify the must items that have serious consequences and the lesser ones that do not have a severe impact. For instance, buying songs and going to the movies have classified them as wants while academic trips and keeping healthy are must have. Therefore, if I do not have enough money to go to movies and to pay for gym I usually forego movies because it lies under lesser important items in my budget. Another item in my budget is savings. Savings are important to me in particular for the unforeseen circumstances. However, the perception of the economic outlook may sometimes influence my saving decisions and my parents. For instance, the current economic situation indicates regression thus have advised my parents not to save because the interest rates are likely to be low. Instead, I urge them to invest on mortgage as the payment would be cheaper.
Even in the rich nations many parents do not strategize on leaving inheritances. These parents want support at old age, and they under-invest in their children and other care. This Economics aspect of life has affected my education my life. One’s education is closely connected to their well-being, income and life chances. A student’s educational success is greatly influenced by the type of the college that they attend. School factors that can limit a student’s academic success are composition, climate, and facilities. In this regard, I entered in agreement with my parents. They are investing heavily in my education in return I will be able to take good care of them at their old age. The attitude and behaviour of adults are largely influenced by their childhood experience. For instance, an India living in America may love curry because she developed a strong taste for it while rising up in India, or a child may forever fear men if sexually abused by a man. The economic approach to life has given me insight into the formation of preferences through childhood experiences. In addition, I view my younger sibling’s attitude and behaviour when adult from this economic point of view and thus I try my best to be a good role model.
In human capital theory, people weigh the benefits and costs of activities such as education, expenditure on health, training, and the formation of behaviour and habits that radically alter their character. For instance, potential criminals can be presumed to act as if they consider both the gains and the dangers of their actions. This economic approach of life has created me a good neighbourhood. Most people have the notion that economics deals with people’s material well-being. However, Economics study provides me an opportunity for rational and objective thinking. Every situation I encounter I approach it with an open-mind and a willingness to accept the answer that seems to be correct according to the evidence. The use of economic principles helps me to make such an objective analysis. However, in some cases the appropriate decision I draw from this economic point of view differs with ethics. In such a scenario, my motto has been to go by the least expensive side. My Objective thinking in economics includes rational behaviour. This perspective enables me to weigh the cost against the benefits of the various decisions. If benefits of a particular decision will be greater than the costs, then I implement my decision.
In conclusion, economics is a significant domain in human. It affects everyone about choice and is at the heart of all decision making. Government, firms and individuals are all faced with challenges of allocating scarce resources at their possession. As a result, economics has an extensive application in most aspects of daily life and can be used to analyse everyday actions. Economics study examines topics of importance to people’s well-being and gives a person an insight of their community. The study of economics has helped me to learn and develop new skills in life. It is not just a subject of study, but also a way of thinking. I am excited to realize where I end up in the future as I firmly believe it will be an inspirational through the application of the skills have learnt from economics.