Economics is the social science that examines the ways in which individuals and entire societies allocate scarce resources to meet their needs and wants. Resources are by nature limited. People do not have the time, money or materials to do or acquire all of the things they need and want. This means individuals, families, companies and entire nations have to prioritize their needs and wants, deploying their available resources accordingly.
Harvard economist Gregory Mankiw, a former White House economic adviser, points out that studying economics prepares you to be a more knowledgeable and informed participant in the modern economy. A basic understanding of economics can make you a smarter consumer, worker and investor. In addition, Mankiw observes that studying economics provides a knowledge base for understanding government actions and world events.
California State University at San Marcos cited a survey in "Business Week" magazine that asked corporate executives of major companies what they considered the best undergraduate degree. According to this survey, economics ranked second, behind engineering. The university noted that economics ranked even higher than business administration, which many students consider a more marketable degree.
The two main branches of economics study the resource allocation decisions of individuals, households, businesses and entire societies. The first branch, microeconomics, focuses on the actions of individual consumers, families and firms. The second branch, macroeconomics, adopts an economywide perspective, studying the economy as a whole and how entire societies allocate resources. Economics also has a large number of specialized fields. These include international economics, public finance, econometrics, health economics, labor economics and business economics.
Nearly all government decisions have an economic dimension to them. Societies want strong national security, quality education and health care systems, sound infrastructure and a social safety net that assists the poor and most vulnerable. However, because government services cost money and most people want low taxes, governments must prioritize national needs and allocate resources. Political leaders often appoint economists to advise them on policy decisions.
The Economics Help website points out that economics constantly evolves as a subject and may provide insights for addressing such issues as global warming and world poverty.