Economics in Today's Society

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Economics is defined as the study of how the forces of supply and demand allocate scarce resources. Economics can be subdivided into microeconomics, which examines the behavior of firms, consumers and the role of government; and macro economics, which looks at inflation, unemployment, industrial production, and the role of government (Investor Word, 2008). Economics can be further divided to include positive economics and normative economics. Positive economics is the study of what is, and how the economy works and normative economics is the study of what the goals of the economy should be. Simply put positive economics looks at how things such as current gas prices directly affect individual buying power and how that buying power affect…show more content…
A change in anything that affects supply besides price causes a shift on the supply curve. Factors that affect the supply curve are; price of inputs, technology, expectations, and taxes and subsidies. If a producer finds that the cost for producing specific items is getting higher than supply of that item will begin to decrease as it is not economically sound to continue to make a large amount of these items. Technology has a direct affect on supply, as it becomes easier and less expensive to produce an item more of that item is produced. As with the demand curve expectation also has an affect on the supply curve, if consumers expect the cost of a product to increase they will buy more of that items which causes a decrease of supply. An example of this would be when the price of gas is expected to raise people will fill their car up and also fill gas containers. Tax also has an effect on the supply curve as it does on the demand curve, as taxes increase on a specific items then the supply for that particular items increase as people stop purchasing the item. In an article titled “Research focuses on Dining Pattern, Demographics,” it was reported that dining out has declined. This decline is closely related to housing problems and rising gas prices. The research indicted that the most effected by the economy problems are the “Baby Boomers (ages 43 to 62) research show that these individual tend to reserve dining out for special occasions. The
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