Many people believe that economics it is all about money. The term economics can be defined in different ways. It is “the study of scarcity, the study of how people use resources and respond to incentives or the study of decision making” (1). In fact, economics is a social science that involve topics such as wealth and finance but is not all about money. Economics studies how an individual, a business or any institution or organization make important choices regarding the use of their resources to satisfy their wants and needs. The study of economics involves three main factors that help to determine how economy functions; it involves consuming, producing and the sale of goods and services.Economics is generally divided into two categories; the first category is macroeconomics. This category concentrates on the economy as a whole entity. It studies the overall economy and some of the topics studied include investments, economic growth, employment, government intervention and more. The second category is microeconomics. Microeconomics focuses on individual decisions, how these individuals make trades with others and the different factors that may influence the demand and supply of goods and services. When taking about economics, many people wonder where did economics originate? Adam Smith is regarded as the father of modern economics. “Smith was a Scottish political economist and philosopher, who became famous by his influential book The Wealth of Nations (1776).(2)” However he might have been inspired by French writers who shared their ideas on how economics work. Adam Smith took many of these ideas and expanded them in his book, explaining how economics should work as opposed to how they do work. With the Wealth of Nations, Smith established himself as “the leading expositor of economic thought. (3)” This book was published as a five-book series that described the nature and cause of a nation’s prosperity. According to Smith, the pursuit of someone’s own self-interest, the precision of labor and trade between nations it is what determines the wealth of a nation. In the Wealth of Nations, Smith begins explaining how production and exchange have a great contribution to the national income. He uses an example on how assigning certain tasks to different people can boost the productivity to a higher level. Smith also believes that building a capital, by saving some of the goods that have been produced instead of selling them immediately will help to have a better condition and to have economic progress. For Smith, someone who was earning money by their own labor benefits themselves but without knowing is also benefiting society because it is earning an income in a competitive free market and must be producing something that others will value. Smith also published a book called The Theory of Moral Sentiments in which he shows that “our moral ideas and actions are product of our very nature as social creatures. (4)” This book identifies the basic rules that are needed to survive on society and explains what it must be done. Smith argues that as individuals, it is natural to look after themselves first. That can be considered ethically wrong, because people are looking forward to doing something that might have a benefit on them, but it doesn’t matter if this action affects others. Ethics studies the values and virtues of human beings and explains how a value is a good to achieve something or if it is a standard that someone might have to follow to achieve the good, whether it is right or wrong.In today’s economy, ethical issues have a connection with economic issues. Investors, producers or any individual can be doing something that it will be considered good for their company, but it might be morally incorrect. According to Smith, not everything related to self-interest can be considered bad, human beings might be selfish but also have the capacity to help others when it is needed, and this is what makes possible to “live together peacefully in the moral sphere and productively (in the economic). (4)”For college students in general, the study of economics will give them a background of how the economy of the country works and will help them to develop skills that will be useful for them in the future. For those who want to major on economics or any business area they will have an even more strong background in microeconomics and macroeconomics, will have more knowledge about economic institutions and their functions, they will acquire knowledge in different areas of this field. Economics majors will prepare these students for careers that have to deal with banking, insurance services, government agencies as well as non-profit organizations. It will also provide an excellent foundation for those students who will decide to continue their education beyond the bachelor’s degree. Economics will be a good preparation for students who will like to pursue a law career and other business and social science areas.
In general, every individual should know that it is important to care about economics. In this country we have a free market economy, it is a flexible and adaptable system which can vary from time to time, but it will definitely cope with whatever the future brings. Economics affects everyone’s lives and learning about its concepts can help you understand what it is happening on a day to day basis, it will help you to make better financial decisions, understand policies and see the world in a new different way.