What Is Economics? Why Is It Important To Learn About The Ideas That Economics Covers?

An economics course will teach you the fundamentals you lot need to decipher the graphs yous may acquaintance with a typical economics grade, too as the tools to develop a successful business strategy. But, how can you know if studying economics is right for you lot?

If you're asking yourself this question, consider the learning outcomes of various economic science programs and how they compare to your personal and professional goals.

What Is Economics?

At its core, economics is the study of how individuals, groups, and nations manage and use resources.

Economics tin can be cleaved down into microeconomics, which looks at individual decisions, and macroeconomics, which is concerned with the economy as a whole. Both types of economic science utilize historical trends and electric current conditions to inform business conclusion-making and make predictions nigh how markets might deport in the hereafter.

Why Study Economics?

Students who choose to study economics not only gain the skills needed to understand complex markets just come up away with strong analytical and problem-solving skills, as well as the business organisation acumen necessary to succeed in the professional world. In fact, economics can be useful for professionals in all industries, not just in concern.

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Advantages of Studying Economic science

Here's a await at seven of the top advantages of studying economics and how it tin can benefit both your arrangement and career:

ane. Y'all'll Expand Your Vocabulary

Whether information technology'south scarcity (limited resources), opportunity price (what must be given up to obtain something else), or equilibrium (the toll at which demand equals supply), an economics course volition requite you fluency in fundamental terms needed to empathise how markets work. Fifty-fifty if you don't utilize these words ofttimes in your electric current role, studying these economic terms will give you lot a ameliorate understanding of market dynamics equally a whole and how they employ to your organization.

2. Yous'll Put New Terms into Practise

Economics isn't just learning a fancy ready of words, it's actually using them to develop a viable business organization strategy. When you understand these terms, you can use theories and frameworks like Porter's Five Forces and SWOT analyses to assess situations and brand a variety of economical decisions for your organization, like whether to pursue a bundled or unbundled pricing model or the all-time ways to maximize revenues.

3. Yous'll Understand Your Own Spending Habits

Economics volition teach you about how your organization and its marketplace behaves, just you lot'll also gain insight into your own spending habits and values. For example, Willingness to Pay (WTP) is the maximum amount someone is willing to pay for a good or service. There's often a gap betwixt hypothetical and actual WTP, and learning about it will aid you decode your own behavior and enable you to make economically sound decisions.

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For Shamari Benton, the concepts he learned in Economics for Managers opened his eyes to how everyday decisions are infused with economic calculations and principles.

"A uncomplicated grocery shop visit becomes filled with economic references and belittling ponders," Benton says.

four. Y'all'll Understand the Nuances of the Field

Many people recall of economics as merely curves, models, and relationships, just in reality, economics is much more nuanced. Much of economical theory is based on assumptions of how people behave rationally, but it'due south important to know what to practice when those assumptions fail. Learning well-nigh cognitive biases that affect our economic controlling processes artillery you with the tools to predict human beliefs in the real world, whether people deed rationally or irrationally.

5. Yous'll Larn How to Leverage Economic Tools

Learning economic theory is i thing, simply developing the tools to make business decisions is some other. Economic science will teach yous the nuts and besides give yous concrete tools for analysis. For example, conjoint analysis is a statistical approach to measuring consumer demand for specific product features. This tool volition let you to go at the surprisingly complicated feature versus cost tradeoffs that consumers brand every day.

For example, imagine you work for Apple Inc. and yous want to know what part of the iPhone you should amend: Battery life, screen size, or camera. A conjoint assay will let you know which improvements customers care about and which are worth the company's fourth dimension and money.

6. You'll Be Amend-Prepared for Graduate Schoolhouse

In addition to helping y'all make ameliorate decisions in both your personal and professional life, learning economics is as well benign if you're considering a graduate concern degree. Studying economics tin equip yous with the problem-solving skills and technical knowledge needed to prepare for an MBA.

An MBA typically includes courses in finance, accounting, management, marketing, and economics, so if y'all practise decide that an MBA is right for y'all, y'all'll exist one pace ahead. Furthermore, with a foundational noesis of economics, you'll be able to use economic theories and frameworks to make up one's mind if graduate schoolhouse is worth the investment.

7. You lot'll Meliorate Your Career Prospects

An education in economic science tin can improve your employability in a variety of industries. Co-ordinate to the Globe Economic Forum'south Time to come of Jobs Study, analytical thinking and complex problem-solving skills top the list of skills that employers will discover increasingly important by 2025, both of which can be gained by studying economics.

In addition, many careers require cognition of economic concepts, models, and relationships. Some possible career paths for economics students include finance, cyberbanking, insurance, politics, and healthcare administration. You'll also be able to further your career in your current industry, as an understanding of the economics that ability your industry can help you lot to exist more constructive in your role.

Options for Studying Economics

There are many options available for those looking to pursue an education in economics. Depending on your personal and professional goals, your current stage in life, and other important factors, you may cull to pursue an undergraduate or graduate economics caste or take an online economics course.

Whether you lot're new to the business world or an experienced managing director, having a thorough understanding of how markets work, pricing strategy, and consumer behavior is essential to success.

Do you want to take your career to the adjacent level? Explore our eight-week online course Economic science for Managers or other business essentials courses to learn how to apply economic principles to business decisions.

This post was updated on May 11, 2021. Information technology was originally published on November thirty, 2017.

Virtually the Author

Natalie is an Associate Product Manager at Harvard Business School Online working on Alternative Investments, Leading with Finance, Negotiation Mastery, and Sustainable Business Strategy. She received her B.A. and Thousand.A. from Stanford Academy and Thou.B.A. from UCLA Anderson. In her gratuitous time, she enjoys running, cooking, and staying up likewise late rooting for her Bay Area sports teams.