Economics is the discipline that deals with the relationship that the components of a marketplace. It aims at explaining the processes by which a market works. This is achieved by examining the micro and macro factors affecting the market. Furthermore, it also studies the endeavors people undertake in the pursuit of the satisfaction of their various wants and needs. There are various theories in place to explain the forces that are normally at play and many varying results of various trends in the economy (Taussig, 2014).
Finance is a discipline that focuses on the management of the funds put aside for the execution of a specific mainly large-scale endeavor by a company. It focuses on the understanding of the money needed for the undertaking, the understanding of the financial instruments in place needed to source funds, the making, and managing of investments and the success of the tasks (Ullah & Giles, 2011).
One of the main concepts in economics is the concept of needs. These include the basic needs that most people would not have the ability to exist without access such as food, shelter, and clothing. Another concept is the concept of wants. Wants are the broader things that people normally desire but can live without if they are not able to afford them. Some of the things that fall into this category include vehicles, electronics, Wi-Fi, and a vast array of luxury products. Goods are commodities produced for sale in the market place (Ullah & Giles, 2011). They are normally tangible. Services are intangible since individuals perform them. A businessperson exchanges this work with a consumer for money. They are various types of goods available. Goods produced for direct consumption by consumers are consumer goods. Goods used by producer in the manufacture of consumer goods are capital goods. Relatively rare goods are the best for economic transactions; these products are economic products (Ullah & Giles, 2011).
Scarcity is also a concept of economics. This can be described as the shortages of resources required for various tasks caused by the fact that there is a limited amount of resources available at any one time. Supply can be described as the variable that represents the availability of specific goods and services in the market. Unless affected by other variables, a decrease in supply normally causes an increase in the price of the product and vice versa (Mankiw, 2014).
Demand represents the desire that there is in the market for particular goods and services. If the demand for a certain product increases this usually leads to an increase in the prices of that product in the market. Supply and demand are very closely related and are used to control the prices of goods and services in open market economies. The value of a product is the measure of the worth of a particular service or good in the market. A number of variables affect the value of a product. Some variables that directly affect the value of certain goods and services are the forces of supply and demand. Either the value of the product will rise or fall based on the market forces of supply and demand. Economic resources are the goods and services that are put to use by producers in the manufacture of consumer goods. The most common resources include land, labor, and capital (Mankiw, 2014).
Mankiw, N. G. (2014). Principles of economics. Stamford: Cengage Learning
Taussig, F. W. (2014). Principles of economics. New York: Cosimo Classics.
Ullah, A., & Giles, D. E. A. (2011). Handbook of empirical economics and finance. Boca Raton, FL: Chapman & Hall/CRC.
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