What is Economics: Definition and 194 Discussions

Economics () is the social science that studies how people interact with value; in particular, the production, distribution, and consumption of goods and services.Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes 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 analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies that have impact on these elements.
Other broad distinctions within economics include those between positive economics, describing "what is", and normative economics, advocating "what ought to be"; between economic theory and applied economics; between rational and behavioural economics; and between mainstream economics and heterodox economics.Economic analysis can be applied throughout society, in real estate, business, finance, health care, engineering
and government. Economic analysis is sometimes also applied to such diverse subjects as crime, education, the family, law, politics, religion, social institutions, war, science, and the environment.

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  1. H

    Understanding GDP and its practical meaning

    If a country's GDP is 200000,0000000 USD (too many zeros eh?), and $$ \text{GDP} = \text{ Compensation to employees} + \text{Government Spendings} + \text{ Investments} $$ (Closed Economy, for simplicity, I mean for my simplicity not the country's) Why do they call it Compensation to...
  2. H

    KE of photo-electron and nominal interest rate

    Einstein's formula for kinetic energy of a photo electron is $$ KE = h\nu - \phi$$ $$ h\nu = KE + \phi$$ Which basically says whatever energy you provide through radiation, a part of it will be used (but I would like to say 'wasted') in overcoming the work-function (that is in cajoling that...
  3. H

    In search of an economics forum

    I need an economics forum very similar to the way PhysicsForums is for Maths and Physics. S done I tried reddit and stackexchange but they were not very suitable. Stackexchange in economics was not very active and reddit was mostly about discussing the everyday issues involving economics. What...
  4. Leo Liu

    Is Mankiw's Principles of Economics a good textbook for beginners?

    I want to teach myself the basics of economics and see that many people recommend this book to absolute beginners. What's your take on it, and is it a book suitable for noobs? If not, what are some decent alternatives of it? Thanks in advance.
  5. sbrothy

    Subtle scientific insight in the field of economics. :)

    I didn't really want to create another thread just to make a (hopefully) humorous observation but on the other hand to link to this paper under a "cranky science" header hardly seems fair. Especially when I really haven't read the thing in it's entirety. One very scientific statement piqued my...
  6. bhobba

    What Are The Economics Of Pebble Bed Reactors

    Hi All Out here in Australia you are not allowed to build a nuclear reactor. Even talking about it brings out the nut cases saying really intellectual carefully considered comments - Oh no not another nuclear nut. Further discussion usually indicates they don't even know the difference...
  7. Q

    Market psychology?

    I have a question that's bothering me. Namely, externalities aside (et ceteris paribus) humans are still the main component of rational actors in the marketplace, then if we perfectly understood human psychology, then would the market be perfectly predictable and understandable?
  8. K

    Minimization problem: Economics: quantity to order

    Homework Statement Homework Equations Minimum/Maximum occurs when the first derivative=0 The Attempt at a Solution $$Q=\sqrt{\frac{2(K+pQ)}{h}}~\rightarrow~Q=\frac{2}{h}(KM+pM)$$ ##Q'=0~## gives no sense result
  9. W

    The merger of engineering and economics

    I couldn't fit it in the title, but I think the merger of engineering and economics is going to be important going forward. I feel most economists look down on engineering economics (just thinking of variable/fixed operational costs and investment costs, etc), and most engineers think that...
  10. Posty McPostface

    Will climate change stimulate or harm the economy?

    I'm reading about the parable of the broken window, which states: I was wondering if this can be related in some way to climate change as a whole. My reasoning is that given that climate change is a consequence of a lack of knowledge about the sum total negative and positive externalities of...
  11. bhobba

    Teaching Economics Without Calculus

    Just a quick question. Can you really teach economics without calculus? Reviewing it now just to refresh my memory since we have a budget being delivered tomorrow here in Aus. I have reached the point where it is proven that maximizing overall profit is different from profit per unit of...
  12. C

    Solving a Sequencing Problem: Allocating Cost Savings

    <Moderator's note: LaTeX code edited.> 1. Homework Statement Hi, I have a question. I have a sequencing problem ##(N, \sigma_{0}##, ##\{p_{j}\}_{j\in J}, \{c_{i}\}_{i\in N})## with ##N = \{1,2,3\}## the set of players, and ##J = \{A,B,C,D,E,F\}## the set of jobs. The processing times of the...
  13. nomadreid

    I Economics: Cumulative CPI

    Suppose you have a set of monthly Consumer Price Indices, and you want to find the factor for a period of two years: it seems dodgy to just multiply all the indices together. But is that the correct way to do it?
  14. H

    Sampling Distribution Question

    I've added a screenshot (https://imgur.com/a/isQXZ) and the text below for your convenience. Please show steps if possible to help my understanding. Thank you. Consider a random variable that is Normally distributed, with population mean mu = E [X] and population variance sigma^2 = var [X]...
  15. Posty McPostface

    Arguing with economics (economists)

    And with a conservative for the matter... How do you argue with economics? Let's take the example of fossil fuel production. If fossil fuels get the job done cheaper (in terms of energy production) then the common sense thing to do is to invest in fossil fuels, such as by expanding offshore...
  16. P

    Maintaining interest in the new 'private' space race

    It's said that expectations drive the economy. So, how do you maintain interest in something that has no immediate bearing/benefit/utility of a population? I would think the answer to that question is to manifest a 'goal', in this case being an interplanetary species or even just building a...
  17. M

    MHB Elasticity Business and Economics Applications

    Elasticity The Demand function for a product is modeled by P=20-0.02x, less than or equal to x less than or equal to 1000 Where p is the price per unit in dollars and x is the number of units. A. Determine when the demand is elastic, inelastic, and of unit elasticity. B. Use the result of...
  18. M

    Adjusted present value, finance, economics

    Did not find any "place" for this question, but hopefully someone will be able to give me some help with this. corporate tax: Tc= 25% return on debt: rD=4% return on assets = rA= 10% Debt as amount of total value: D/V = 0.6 Equity as amount of total value = E/V = 0.4 A perptual cashflow before...
  19. P

    Can human traits be formalized?

    I've been wondering about modeling human traits that seem to have a universal aspect of nature. Though this is worthy of another topic, on a more fundamental level or serving as a good example, can 'masculinity' have a more objective measure of measuring it and formalizing it. In other words, is...
  20. P

    Can Economics be guided by science?

    In economics, Adam Smith coined the term (rather unintentionally) 'the invisible hand' of economics that drives all the efficiency gains and progress entailed by using the market to mediate and satisfy human wants and needs. The rather recent advent of the market entity has led to enormous...
  21. UsableThought

    New book on dynamical, agent-based models for economics

    This may be of special interest to mathematicians, physicists, and anyone who is skeptical of the various "social sciences." The book is The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction, by Richard Bookstaber; 2017, Princeton U. Press. I've only...
  22. luckyscar

    IB Micro Economics, PED (price elasticity of demand) and Firms

    Homework Statement What is it: Practice Paper 1 b question for SL Economics IB Question: Discuss why it may be important for a firm to have a knowledge of price elasticity of demand. PS: It isn't stated explicitly to use a diagram, but my understanding is all Paper 1 questions need to be...
  23. M

    Financial engineering

    Hi guys, Am I totally lost if I am searching for help in financial engineering here- I have been struggling with a question for way too long now. Thanks,
  24. H

    Economics Price Elasticity of Demand

    Homework Statement So, my professor gave a test this weekend. I missed a problem concerning price elasticity of demand, but that's only because I assumed the opposite direction. Now, I'm considering challenging this question, because the price elasticity was listed as a positive number...
  25. N

    Whatever happened to geothermal energy production?

    I've become nauseated with the recent obsession with colonizing Mars, mining the moon or asteroids, and spending resources on intermittent power production from wind, solar, and batteries. I've looked at numerous sources of energy production and have come to the conclusion that instead of...
  26. R

    I Applying physics to economics/finance

    Hello everybody, I am currently a junior majoring in physics and economics and I am starting to think about my senior projects. For my senior project next year, I would like to see if I can apply any physics "concept" to economics or finance. Do you know what would be the best approach for this...
  27. E

    How to Read a GDP Graph?

    Is reading a GDP graph the same as any other graphs? For example, given a certain GDP growth over a certain period of time, the average growth can be calculated as taking the sum of all values and then dividing the sum by the number of data points. Are there also crucial points to consider...
  28. 1

    Where do physics and game theory meet?

    This is going to sound really strange, but I don't want to have this question inside of me and never ask it. I love business/economics/game theory. However, the subject I've studied the most in my life at this point is physics. The question of what I want to write about for my PhD thesis is...
  29. S

    Subforum for quantitative and mathematical economics?

    Here I would like to take the opportunity to suggest the addition of a subforum for the purpose of discussing quantitative and mathematical economics. This idea came up after I posted in a few recent topics (1st topic, 2nd topic). I am also partially motivated by QuantEcon, a website pointed out...
  30. T

    Compare these two Linear Algebra courses

    Hi! First off, I am actually a math / econ major. I hope I'm still welcome here I am trying to figure out if it's worth it to take both of these courses or just one of them. I have not taken LA before. Course 1: Addition, subtraction and scalar multiplication of vectors, length of vector...
  31. G

    Engineering Economics: Converting a NFW to an AEW (future worth)

    given a net future worth of $72700 after 5 years at 10% interest is it possible to convert it to an annual equivalent worth that is 20 years at 10% interest?
  32. EnumaElish

    Blockchain & the End of the Firm: Why Are Firms Needed?

    Blockchain is much touted to be the next coolest idea happening right now: https://www.weforum.org/agenda/2016/06/the-blockchain The idea seems to be lower transaction (e.g. contracting) costs. Which are huge. (Between 5-10% of total project cost according to a world bank estimate.) So...
  33. obstinatus

    Programs Economics Major, Physics Minor?

    As I've posted in another thread, I'm struggling with having failed to make significant progress in my physics degree; continuing to pursue it as an undergraduate major would likely result in another two years of school (and including a couple semesters off, I've already been an undergrad for 5...
  34. EnumaElish

    CERN discovers new economics particle

    @Evo is this your blog (evonomics)? ;-P Economists Discover Quasi-Equlibriated Economic Sub-Particle The problem economists have explaining the financial crash By Steve Keen CERN has just announced the discovery of a new particle, called the “FERIR”. This is not a fundamental particle of...
  35. Felice

    Utility function von Neumann Morgenstern

    Homework Statement I have a financial intermediation model with delegated monitoring to a venture capitalist. At the moment all participants are risk neutral and i want to introduce risk aversion to the model. Therefore i need a utility function under the von neumann morgenstern criteria, ie...
  36. Mr Davis 97

    AD/AS Model for economics

    Homework Statement If the AD curve intersects the AS curve in the intermediate section of the AS curve, can you calculate the increase in real output in the AD/AS model resulting from the $100 million increase in government spending? If not, what additional information would you need? Homework...
  37. blackunicorn

    Calculate Car Payment Principal w/ Engineering Economics & 0.75% Interest Rate

    1. Assume monthly car payments of $500 per month for 4 years and an interest rate of 0.75% per month. What initial principal will this repay? 2. I'm looking for the formula that would be used to calculate it and how to apply it. 3. My attempt - P*0.075= $500[1-(1+0.075)^(-48) I calculated...
  38. E

    Cost Function for Start Up

    Homework Statement Trying to determine appropriate cost function for my start up. Usually total cost= fixed costs + per unit cost* Q. However, it is usually assumed your fixed costs are monthly recurring costs, like rent, utilities, etc. Many of the costs we face are one time development costs...
  39. K

    Economics Homework -- Maximizing Profits....

    Hello, I need help with parts 4b-4d and to know if everything I've done is correct. A medical facility is faced with the following information concerning each MRI they provide. Q=2100-.5P MR=4200-4Q TC=400Q+5000 MC=$400 1. Find profit maximizing level of output (Q*). Find P at Q*...
  40. A

    Why is Percent Change Calculated Like This?

    Homework Statement The formula for price elasticity in my micro/macroeconomics course is: elasticity = For those unable to view the image: (change in quantity / avg quantity)/(change in price / avg price) My question is: Why is it that the average quantity/price is used instead of just the...
  41. D

    Learning Trigonometry and Calculus for High School Economics Students

    I am in the 3rd grade of high school and we have a very weird math program.Since the school is specialised for economics we don't study trigonometry in the 3rd grade ,instead we learn about interest rates and how to calculate credits etc... Regardless, we have additional lections (which I am...
  42. alexmahone

    MHB Dimensions in economics

    A typical demand function is y=5000-p where y is quantity demanded and p is price. But this equation isn't dimensionally correct. What am I missing?
  43. K

    Calculus Calculus for business and economics textbook?

    Hey there everyone, can you kindly recommend me a textbook of calculus with special emphasis on its applications in business and economics. I am a Management Sciences Major and I really want to learn the applications of calculus in economics and business.
  44. Stephanus

    Fusion Power Economic Impact: An Overview

    Dear PF Forum, Can anyone give an idea. Supposed fusion power is available. With its limitless fuel source from the ocean. What would happen? How much would this energy cost in term of money compared to gasoline and electricity? In fission, the fuel is expensive (uranium).
  45. S

    Engineering Economics - Practice Problems

    Sorry if this is not in the correct section. I have an engineering economics exam this week. I'd like to know if anybody (particularly professors and/or tutors) know of a website or have a document they could share with me with a few practice problems. I have attached a PDF document with the...
  46. A

    Programs Is a math degree worth it?

    I am an economics major with a minor in mathematics. I have three semesters left in college, but if I took an additional semester I could complete a double major in econ and math. If completed, I would be interested in pursuing a master's in applied mathematics. My hope is that this will be...
  47. B

    Homework question from economics

    < Mentor Note -- thread moved to HH from the technical math forums, so no HH Template is shown > Hi, I have already delivered the homework so my reason for asking is because I want to/ need to understand it. I am at question d. I have found the two differential equations. They are: c° =...
  48. jdawg

    Economics NPV Problem

    I hope that I am posting this in the right place, I wasn't sure where to post this question! Chris is renting a house, and it does not have a refrigerator. A refrigerator is worth $3 every day because Chris will eat out less. Chris has a discount rate of 18%. Refrigerators usually last 5 years...
  49. H

    Engineering Economics of an Engineering PhD

    Ill keep this short and sweet: Everyone knows you don't go into a PhD program to get rich, that is silly. A PhD requires a sacrifice in earning power, my question is whether or not this is worth it in today's economy, especially in the USA (consider the student loan crisis). It seems to me...
  50. L

    Electrical Engineering, Computer Science or Economics

    Dear PhysicsForums members, being currently in my final year of Austrian high school I have to decide what to pursue my Bachelors degree in. (Un)fortunately I have three huge interests. Those are Economics, Computer Science and Electrical Engineering. All of which are highly fascinating and I...