well in this brief video I'm going to provide an introduction in an overview to the subject of economics economics is actually considered to be a social science so it's a study of essentially people but more specifically economics is the study of how people actually allocate their limited resources in an attempt to satisfy their unlimited wants now we all have obviously certain resources at our disposal we have certain financial resources we have resources in terms of our time and our talent as well as energy and we use those resources to varying degrees to accomplish individual objectives but we also do so in an attempt to satisfy the wants that we have and we all have what we would classify unlimited wants meaning that there are a number of different things that we want and unfortunately we don't have the resources necessary to fulfill all of those different wants and so that requires us to make choices we have to make choices and prioritize what are the things that are going to get it going to get our resources our best and obviously if we choose to devote our resources to one particular thing whatever that may be then that would essentially eliminate our ability or reduce our ability to go after and fulfill another want and so economic studies that particular thing it's trying to study the choices that we as individuals and governments and what we do with the resources that we have economics uses a lot of different theories and models as a way of drawing conclusions theories and models are simply very simplistic representations of how the world works and then we use that to apply it towards a particular setting so we may look at the different variables that influence price and try and draw conclusions based upon that so that we can apply that in a certain setting now economics can be divided into two separate categories for the purpose of studying them and that is macroeconomics and microeconomics now macroeconomics is simply the study of the behavior of the economy as a you're looking at the big picture kind of 30,000 feet bird's-eye view and trying to understand how the economy behaves and ultimately what the condition of the economy is as a whole so you would look at things what are known as an aggregate meaning in total the sum of smaller parts if you will and aggregates include things like the inflation rate include things like national unemployment and also include the gross domestic product which is the total dollar value of goods and services produced by an economy over a given period of time usually on an annual basis now microeconomics is very similar but instead of looking at things from kind of a 30,000 foot view looking at the economy as a whole we're going to drill down more specifically and look at the smaller components that make up that larger economy so with microeconomics we're really looking at the decisions that individuals households and businesses make we're getting very very specific here we're looking at things through kind of a microscope if you will and trying to assess the individual decisions made by those particular groups so we're looking at things on a smaller scale this can include anything from how a student may decide how to allocate their time spent studying obviously that's a very very big issue and trying to balance competing interests between work and school and personal life and ultimately how much time can you allocate to something like studying a family's choice to purchase a new vehicle would be a microeconomic matter because once again it's a decision made on the individual level on a household level one of the things I said I should mention is that with economics we're not necessarily to studying how people think that's not necessarily a concern here but we're studying the actual behavior the action because as many marketers know with various focus groups and surveys and different things is that people will often think one way but do something completely different there is not necessarily a consistency between what people will say and what ultimately they do and so we're focusing more on the actual behavior not the thoughts that go along with that because those not might not be consistent but we're focusing on the actions and the behavior because those are much more difficult or much more easy to assess versus the way people think we're looking more at actions here now one important thing to note as well is that macro and microeconomics are interrelated even though we separate them for the purpose of studying them individually they are very much so intertwined okay an example of this is when you look at macro and micro economic factors micro economics obviously we're talking about smaller scale decisions made by individuals households and businesses but if you add up all the individual spending patterns and habits of individual consumers and households ultimately you get to spending on a national type level and so a microeconomics really is a small part but added together gets to macroeconomics if individual households and individual consumers don't spend money then that essentially affects unemployment because businesses will not have demand for their goods and services because individual spending is low they in turn are forced to lay off workers obviously because they don't necessarily need that type of capacity if there's no demand and that in turn affects a national figure like unemployment and so even though we isolate them to study them and to look at them through the different lenses we need to consider them as interrelated because they do have an effect on everything as a whole you know we've seen with the current condition of the economic climate a current macroeconomic indicator being things like unemployment and the rate of unemployment once again has a significant effect on individual spending as well what unemployment is high which historically it has been then that tends to affect the purchasing habits and behaviors of individual consumers because the concern is if I may not be in a position or may not be employed six to nine months down the road that's going to affect my individual spending patterns now I'm not going to spend frivolously I'm going to stick to things that are considered to be necessities because I want to make sure and put myself in a position to where I have money set aside for that and so once again we do have to consider these things they are interrelated but we do separate them for the purpose of studying them