How Economics affect our daily lives?

Answer 1

Our resources are limited (scarcity of resources). But our needs and wants are unlimited. So, how we can fullfill as much wants and needs as possible with that limited resources? We have to prioritise the needs and wants, to allocate the recourses and use them the most efficient way. So, it's about efficiency.

Let's say, your income. Your income is not unlimited. With that limited income, you want to buy a lot of things. You have to choose what product to buy, at which price and how much quantity. Now, let's say that you have 13 last dollars in your pocket. With that money you can either buy a ticket for a movie or buy beers and pizzas and watch the TV-show. What you do is what gives you more pleasure, or, as we say, what maximize your utility. You make an economic choice.

Also, economics is about your income itself. The level of your income depends on the overall status of the economy. For example, if we have a recession, then the income (for most of us) will be less. If we have growth, then the income will rise. If we have growth, then I would have a job. If we have recession, then I might be unemployed. As you can see, economics affects almost everything.

Economics is about freedom, as well: in our economy, you're free to do what you want (economically speaking), because the market itself will decide what to produce and how to produce. In order to do what you want (let's say, to buy what you want at the quantity you want), you have to have the money. So, another factor of economics that affects your everyday life is the distribution of the total income.