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Cape Economics

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Economics: What is it?

If someone asks you to define economics, what are you going to tell them? Without running to your book, let’s look at the word eco-nomics itself. The prefix ‘eco’ from the Latin word ‘oeco’ refers to household and ‘omics’ is a general term for a broad discipline of science which analyses certain variables. So the word economics can be defined as:
‘...A social science that studies how individuals, governments, firms and nations make choices on allocating scarce resources to satisfy their unlimited wants’ (Investopedia)
‘...The social science that deals with the production, distribution, and consumption of goods and services and the theory and management of economies or economic systems.’ (American Heritage Dictionary)
‘... The study of how society uses its scarce resources.’(The Economist) ‘...the branch of knowledge concerned with the production, consumption and transfer of wealth.’ (Oxford Dictionary)
How is economics going to help me?
Scenario 1:
As a high school or college student, you about doing a number of different career options but why do you end up with one or two major interests?... Yes, you make a choice whether or not you want to be a Doctor, Lawyer, Entrepreneur, Accountant, Economist, among other professions. And economics has to do with making effective choices and how they impact you as an individual.

This leads us to the first branch of economics. A group of concepts and explanations have been developed to explain the choices that individuals and firms make and how they react to certain conditions that may occur. This branch of Economics is called ‘Microeconomics’ or narrow economics.

Individuals and firms from the previous definitions are not the only ones who have to make economic choices. Governments around the world have to make choices which affect their population. For larger countries such as the

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