Economics Definition and 30 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. 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?
  5. 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...
  6. C

    Sequencing game

    <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...
  7. 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?
  8. H

    Sampling Distribution Question

    I've added a screenshot ( 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]...
  9. 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...
  10. 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...
  11. 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...
  12. 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...
  13. 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...
  14. 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,
  15. 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...
  16. 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...
  17. 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...
  18. 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...
  19. 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...
  20. EnumaElish

    Is blockchain the end of the firm? (Or, why are there firms rather than nothing?)

    Blockchain is much touted to be the next coolest idea happening right now: 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...
  21. 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...
  22. 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...
  23. 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...
  24. 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...
  25. 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...
  26. 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...
  27. 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...
  28. 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...
  29. N

    How to get over being a grade perfectionist?

    I have always been interested in majoring in a STEM field. I never saw myself as a scientist, per say, (I abhor labs) but I always thought I would major in physics, math, or computer science. However, recently I have been very offset by the relatively low grades given out in my STEM classes than...
  30. S

    For interest compounded on yearly basis, how much will be paid back in 3.5 years?

    - This may be a stupid question as I am totally new to the concept of interest. I don't even know if my question is valid. - Figure is given below for reference Suppose I deposit some money in a bank that pays compound interest on yearly basis. If I decide to withdraw my amount at the end of...