Why should we Study Economics?
| Aziza Amonova Saidulloyevna - 16 May 2023

Everyone has their views on the concept of economy and how it is used in everyday life, based on their personal experience. Now we will briefly introduce you to the views of N. Gregory Mankiv, professor of economics at Harvard University.  The professor gave a broad overview of three main reasons for this topic. The first reason to study economics is that it helps us to better understand the world we live in.  Depending on your interests, many questions about economics may arise.  For example, why is it so difficult to find accommodation in some cities?  Why do you think living standards are so low in many African countries?  Why is it that inflation is high in some countries, and fixed prices prevail in other countries?  Why is it easy to find a job in some places and very difficult in others?  These are just a few of the questions that can be answered while studying economics. A second reason to study economics is that studying this field will make you an intelligent member of all economic processes.  As you live, you make many financial decisions.  For example, when education is in demand, you make decisions about how long you stay in school and how long you study at other institutions.  Once you start working, you'll think about how much of your paycheck should be used for necessities, how much to save, and how to save.  Whether you're running a small business or a large corporation, you'll find yourself wondering how to price your products.  Naturally, you can get answers to such questions by knowing the economy.  Knowing economics will not make you rich by itself, but it will give you the tools you need to get there. Third, as we study economics, we gain a better understanding of limited economic resources and their alternatives.  Economic questions are also in the minds of the representatives of the government, whether they are legislators or executives. For example, what is the best way to protect the environment?  What are the effects of state budget deficits on the economy?  As a commenter, you can also help government officials know how to best allocate society's resources.  Understanding the economy will instill in you a sense of responsibility.  Who knows, maybe one day you will be the representative of that government.  Thinking if you look at it, even our simple choices are one of the most important parts of the economy. I will tell you about the processes involved.  About opportunity cost, or alternative costs.

      Opportunity cost is the opportunity cost of doing one thing instead of doing another.  To be more clear, the alternative value is the "cost" of not consuming it. Look, if you believe that there is no such thing as free anywhere, it's hard to believe.  Let's take a free meal as an example.  You may think that if I get that food without spending money, it will be free.  But at this point, you're not taking into account opportunity costs.  Let me explain opportunity cost with examples. Let's say you see a poster advertising "free hot dogs" and go there to get a free hot dog.  When you go, about 12 customers are waiting in line, hoping to get a free hot dog.  You are also in line.  If we say that it takes 5 minutes to prepare one 7,000 soum hot dog in that store, it is obvious that your turn will come in 5 min×12=60 minutes, i.e. in one hour.  As a result, you will agree to work for 7,000 souls per hour.  If instead of coming to this store, you could go home and read a book, watch TV, or otherwise do something more important within an hour.  Therefore, that hot dog is not free, its value is equal to the value of the work you can do in an hour. Where things that people need are cheap, there naturally are long queues, if those low prices are artificially controlled by government intervention.  the opportunity costs will increase significantly.  Why is it that if you open a store and someone from the government comes and says that you sell potatoes for 2,500 sums, but you bought potatoes for 2,800 sums, it is clear that you are not selling potatoes?  Why?  Because you cannot profit.  As a result, only one or two stores sell potatoes.  You see, those long queues again.  In the case of women, the theory is that time spent on housework reduces the time available to work outside the home, that is, to earn money.  Here is a fact: in 2014, 70% of highly educated women in the labor force aged 15 to 60 were employed in Ukraine.  What for?  Because opportunity cost or opportunity cost is calculated here, naturally.  If a woman with higher education stays at home and does not work anywhere, this woman is more expensive than if she worked somewhere.  As we know from economic theory, the more expensive it is not to work outside the home, the less women choose to stay at home.  For example, money has an alternative cost.  Let's say you want to buy a pair of shoes.  If you go to the market, there are two different prices.  Turkey's goods are 67,000 soums more expensive than elsewhere, and that's what you got.  As a result, you will have to allocate 67,000 soums less money for some of your needs...So, alternative spending is the most important idea of ​​the economy, I am not afraid to return - the most important idea.

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