What is economic theory?
The economy surrounds us. If there is not enough money, we begin to think about how to earn it. Or sell your property. You can also grow vegetables, sell them on the market, or buy them from other people, then sell more expensive. Even for the management of our own property, we go into economics. The actions of people in the marketing system considers economic theory? But what is it all about? We will try to answer the question of what is economic theory.
Science of luxury
The interaction of man and society in the field of economics is called economic theory. Economic theory deals with the study of monetary transactions, production resources and their use, finances of business people. This theory is even called the science of luxury. Economic theory consists of many sections. For example: micro and macroeconomics, international relations and game theory. Also, it is divided into various schools. And according to these schools, there are different methods of economic theory.
Economic theory has several methods. For example, analysis and modeling. The deduction method known to all of us, by means of which the fictional character of Arthur Conan Doyle became famous, Sherlock Holmes, is also one of the methods of economic theory.
The foundations of economic theory give us the opportunity to study the processes of the economy, teaches us to establish a connection between them and distribute the economy among the subjects. This theory is the foundation for other sciences and forms the logic of economic thinking, the concept of a market system. Having studied the basics of the theory, we can develop the principles of a rational economy, highlight the prospect of economic development.
Strange as it may sound, economic theory studies human life. After all, we always want something. Most often, these desires are closely related to finances. We want to earn more or win the jackpot, we strive for this. Such desires are a statement of purpose. And statements about goals are one and the basic elements of economic theory.
But during the achievement of the goal, obstacles constantly arise in our path. Similarly, there are problems of economic theory.Or we want to purchase two necessary items for business development, but we can afford only one. Naturally, everyone will think and choose the best. The item we donated is an alternative cost. And all the obstacles that we face are an element of the theory called the statement about restrictions.
Of the majority of such items, we acquire only one. Usually, we make this choice based on common sense and our financial situation. More often than not, people buy something that is a bit cheaper. And we are faced with such a choice every day. This is the third element of economic theory - the Statement of choice options.
The concept of economic theory
Economic theory is more a method than a science. It can not be studied thoroughly, because its study does not contribute to the development of the economy. A housewife who has read a textbook on economic theory will not find a bag with money and clothes for children near the house in the morning. Do not see, opening the refrigerator, a lot of necessary products. But from now on she will know how to achieve this.How to save a husband's earnings, how to farm, so that it makes a profit. Since the purchase of feed for cows takes all the income from the sold milk. Economic theory will teach counting and choosing alternatives. Perhaps someone will say that this theory will never be useful to him. For example, a blacksmith forges iron, gets paid for it and is satisfied with it. Why should he load his thoughts with various economic thoughts? The fact is that this very blacksmith, with the help of economic theory, can calculate the amount of work and sales. Raise the price, or, conversely, reduce, which will contribute to greater earnings. Everyone chooses for themselves, naturally, the best. And all our thoughts are a philosophy from which the economic theory itself originated.