(“What is Economics”)

He said that each of us encounters many economic problems every day, and we also need to make many choices at any time. To think like an economist is to learn to use the methods, tools, and thinking skills provided by economics to analyse realistic problems and make correct decisions. For example, the director of a clothing company, Xian Wang and his wife, resigned to start a business. Using his savings of 500,000 yuan over the years, he also borrowed 500,000 yuan from the bank to set up a clothing factory in his own house. At the end of the year, the cost they calculated included purchasing raw materials, paying workers’ wages, paying bank loan interest, taxes and other expenses totalling 1 million, and their total income from selling clothing was 1.2 million. Xian Wang’s conclusion is that he made 200,000 yuan in profit and it is worthwhile to resign. His friend Xian Li, a doctor of economics, read the bill and told him that you actually lost. Because there are still some costs you haven’t included. For example, if you don’t set up a garment factory, you can get an interest of 50,000 yuan if you don’t set up a clothing factory. You can rent out your own house without a factory, and you can get a rent of 50,000 yuan. More than 130,000. The total cost of just adding these three items should be 1.23 million, which is a loss of 30,000. Lang Xi amen said that this is why Xian Wang does not understand the concept of “opportunity cost” in economics tuition in Singapore.

In economics, what you give up in order to get something is called opportunity cost.

In the decision-making of modern enterprises, the concept of “opportunity cost” is widely used. For example, companies have a variety of investment opportunities. Although they can all make money, they will lose money from the perspective of opportunity cost if they give up the most profitable projects and choose the second most profitable projects. For example, a mobile phone factory has 10 million, which can be used for diversification and production of air conditioners, earning 1 million a year, or it can be used to invest in development and research, producing new mobile phones, and earning 1.5 million a year. At this time, in terms of opportunity cost, giving up 1.5 million to earn 1 million is a wrong decision. Of course, in economics, there are many important concepts and thinking dimensions such as short-term costs, long-term costs, and marginal benefits. Economics is divided into macroeconomics and microeconomics. To put it plainly, microeconomics is the study of individual and corporate decision-making, while macroeconomics is the study of the overall economic situation and the central government’s decision-making. Thinking like an economist, the first thing to understand is the ten principles of economics: people face trade-offs (choices); the cost of something is to get what it gives up (opportunity cost); rational people consider the margin Quantity (marginal analysis); people respond to incentives (incentive mechanism); trade makes everyone better (the principle of comparative advantage); the market is a good way to organise economic activities (price adjustment); the government can sometimes improve the market The result of ( the role of the government); the standard of living of a country depends on its ability to produce goods and services (productivity); when the government issues too much currency, prices rise (inflation); society faces a gap between inflation and unemployment Short -term trade-offs (policy adjustments).Knowing these ten principles, you will understand why economists’ suggestions on certain economic decisions are controversial and will cause their own quarrels first. Because they must recognise that most policy decisions involve trade-offs. A policy to improve efficiency can be at the expense of equality, a policy will help future generations, but will hurt the current generation. Wait a minute, and this brings me back to Bernard Shaw’s famous ridicule of economists, to help those who own it to analyse problems and make decisions. For those who own it, it is indeed “an art that makes people happy.” Arguing and arguing first. Because they must recognise that most policy decisions involve trade-offs. A policy to improve efficiency can be at the expense of equality, a policy will help future generations, but will hurt the current generation. Wait a minute, and this brings me back to Bernard Shaw’s famous ridicule of economists, “If all economists are lined up end to end, they will not be able to help those who own it to analyse problems and make decisions. For those who own it, it is indeed “an art that makes people happy. “Arguing and arguing first. Because they must recognise that most policy decisions involve trade-offs. A policy to improve efficiency can be at the expense of equality, a policy will help future generations, but will hurt the current generation. Wait a minute, and this brings me back to Bernard Shaw’s famous ridicule of economists, “If all economists are lined up end to end, they will not be able help those who own it to analyse problems and make decisions. For those who own it, it is indeed “an art that makes people happy.”

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I am a senior strategy manager at Econs tuition. We provide services for nearly all course about Economics

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Nuswa Smith

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I am a senior strategy manager at Econs tuition. We provide services for nearly all course about Economics

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