Whenever we hear words like GDP, demand, supply, growth, pricing, etc. the first thing that comes to our mind is Economics. Even if we know nothing about study economics, we all can say that the growth of a nation or any place, in general, is related to economics.
Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among people. The ultimate goal of study economics is to improve the living conditions of people in their everyday lives.
Economics help in budgeting the expense of an individual as well as an entire nation. It is a way of growing our income sustainably and managing our expenses.
One can study economics to decipher various graphs and curves that they see in business dailies or newspapers. One can also study economics to develop a successful business strategy. It helps you manage your income sources as well as expenditures to optimize your earnings.
Economics is broken down into macroeconomics and microeconomics. While macroeconomics focuses on the behavior of the economy as a whole, microeconomics deals with the behavior of individual people and businesses.
Now the major question that arises here is to understand how economics is important to you. Like many other aspirants, if you too are confused with this question, go ahead and give this article a read. By the end of it, you will know if you can relate to the outcomes of the economics courses.
Economics is not only a study of business models. It helps people in acquiring skills that will help them throughout. It helps people in developing analytical, numerical as well as problem-solving skills. It also helps a person in understanding businesses and markets. These developed skills find their applications in business planning, research, strategy, and management areas. Economics helps in strategizing decisions that help in optimizing output.
If we look at the skills acquired by studying economics, we can easily see that it not only helps in the business world but in any professional world too.
Now that we know why to study economics from 1-on-1 tutoring, let us explore more in the reasons with an explanation of how it helps in the real world.
Advantages of Studying Economics
Let us look at the five strongest reasons which are the advantages of studying economics via 1-on-1 tutoring.
1. Expansion of Vocabulary in study economics
We all know words but the understanding of those words is defined by how much we relate to them. We have seen words like equity, equilibrium, scarcity, stability, efficiency, opportunity cost, and whatnot. These are just mumbled jumbles if we do not understand the true meaning of these words. These words are not just for economics, they define the world markets too. These words find their daily implications in market trends, volatility, businesses growing in the world, investments, etc. Knowledge of these words will help you understand market dynamics more deeply and will help you to apply those dynamics to your business organization.
Thus not only will you expand your vocabulary, but you will also find applications for those newly learned words in your profitability.
2. Put in Practice and effort in study economics
Economics is not just about learning theories and passing exams. It crawls its way into every aspect of our lives. Income, earning, investment, businesses, almost everything has an economic aspect to it which if gotten hold of enables a person in the economical growth, both personally as well as for the organization. One may encounter many fancy words while studying economics, but they aren’t just there to make your reading good, you can find the applications in various business models as well as analysis. One can understand theories and frameworks like Porter’s Five Forces and SWOT Analysis to assess the situations prevailing with business decisions and make an informed and analyzed choice. Be it pricing models, acquisitions, product launches, or just merely profit-loss, one can analyze these situations using various business models and assess them to gain financial success.
3. Understanding your Finances
Economics doesn’t mean studying markets and businesses or any large organization. Economics is the study of the finances of everyone, from an individual to a Fortune 500 company. It teaches us how a market behaves but it also tells us of our finances, our spending habits.
For example, Willingness To Pay (WTP) is the maximum amount of how much a person is willing to pay to buy some goods or services. We have a theoretical or hypothetical WTP and then we have the actual WTP. Learning about these terms and their importance will help you learn about your behavior and will also help you make sound decisions to optimize your spendings. Economics will give you an understanding of how much of your income you should save and spend to have enough savings after a certain period. It will help you manage your budget, consolidate your debt, review, and understand your credit report and slash unnecessary expenses.
4. Not just Graphs and Curves
Most people have the illusion that economics means studying graphs and curves. They believe that economics consists of theories, relationships, graphs, curves, etc. but in reality, it is much vast with high applicability. Economics on its core is based on the assumptions and cognitive abilities of humans. It teaches us about how a person may behave under certain implications and how their decision making varieties with varying situations. It helps us in predicting human behavior under real-life constraints, both rational as well as irrational. Economics gives us tools that can be used to analyze real-life scenarios and predict the decision making for production, distribution, and consumption of wealth. The theories explained in the course helps a person design economic models to use limited resources to give high output.
5. Leveraging Economic Tools
Economics lays the foundations for various theories and tools. They yelp in analysis statistical models, business models, business schemes, new ventures, etc. But apart from offering tools, it also lay the foundation for developing new tools that one can use depending on the case they are working on. Various used economic tools are social cost-benefit analysis, input-output analysis, economic impact study, business analysis, marginal analysis, etc. The Law of supply and demand is the most basic economic tool that finds its applicability in every economic decision. These tools help in conservative and smart planning.
For example, conjoint analysis is the statistical approach for measuring the consumer demands for specific product features. It helps a person to analyze price versus feature trade off that a consumer makes while buying new products. It is a complicated study that is made easier using this conjoint analysis tool.
For example, if you own a smartphone manufacturing company, you may need to perform conjoint analysis to understand how much a consumer is ready to pay for every new feature introduced to the phone. This will help you in pricing, manufacturing, distribution, and profit analysis.
We have now seen that economics tutor focuses on the behavior and interactions of economic agents and how economies work. We have seen that economics is concerned with the efficiency in production and exchange and uses models and assumptions to understand how to create incentives and policies that will maximize efficiency.
We have also seen that economics has diverse applications like education, agriculture, politics, businesses, social institutions.
Thus we have now reached an informed and detailed description of why to study economics and what to expect with the subject. This will help you make an informed decision about studying the subject.
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