Definition+of+Economics

As a society we seek services and goods that will provide us with a comfortable style of living. However, the amount of things we desire always surpass the amount of resources we have. Therefore, making this human dream impossible. To get as close as we can to total efficiency, we have established a system that we know as economics. The **definition of economics** is "the social science concerned with the efficient use of scarce resources to achieve the maximum satisfaction of economic wants." Economic analysis is obviously applied in association with business and finance, but the economic way of thinking can also be used for such things as family life, education, crime, politics, and even relationships.

Economics is based on the assumption that individuals will pursue actions that allow them to receive the most personal satisfaction. A person will make different choices based on the type of situation that their in. The main deciding factor in economics is that of **marginal analysis**. If the benefits of an action outweigh the costs then the action should be taken, and the opposite for if the costs are greater than the benefits. Economics can be used to make assumptions and theories by applying the scientific method (**theoretical economics**), or it can be used to find successful policies by which to live by.

Regardless of how you use economics, it is important. Some of the most important ideologies of modern time have been shaped by previous economists--Adam Smith, John Stuart Mill, Karl Marx--just to name a few. Economics are incredibly important to society.

This is a picture of Angels outfielder Torii Hunter. Until this past year, Torii played for the Minnesota Twins, however the Anaheim Angels needed a center fielder due to the limited amount of them in the league. In order to obtain their maximum satisfaction from this scarce resource (centerfielders) they wanted to get the best possible centerfielder around. This was Torii. Because of the scarcity of centerfielders, they were forced to pay the high cost of Torii's $90 million contract while also paying the non-monetary cost of potentially getting the next best centerfielder. This shows that while making administrative decisions in sports, general managers often use economics to finalize their choice. In this case the benefits outweighed the costs for the Angels.

media type="youtube" key="OxRpGMeJPs8&hl=en&fs=1" height="342" width="419" In this episode of Full House, Joey and Jessie have an offer for a full time job at an advertising company. Unfortunately they begin to realize that by taking a full time job they would be missing out on a lot of things, like watching the girls growing up and they would not have time for their hobbies. But on the other side they enjoy the success and the feeling of importance that they get from their new job. to make their decision they visualize the costs and the benefits of the decision in checker pieces to try and maximize their happiness given their scarce resources. In this case the resource is time. This is a good example of how economics can be used in every day decisions.

Sample Question:

Which of the following examples could economics be applied to? A) How to spend the least amount of money grocery shopping B) How to increase the profit of your business C) Deciding how many hours of World of Warcraft to play D) Every day decisions E) All of the above

Other definitions of economics: http://en.wikipedia.org/wiki/Economics http://www.investorwords.com/1648/economics.html http://www.merriam-webster.com/dictionary/economics

answer to sample question: E