what is economics economics can be defined as the branch of knowledge concerned with the production consumption and transfer of wealth economics is the study of how people businesses and societies choose to allocate scarce resources the first principle in economics is scarcity this principle implies that resources are limited and cannot be created or destroyed the second principle is choice this principle states that individuals have the freedom to make choices about what they do with their limited resources the third principle is trade-offs this principle states that every choice has an opportunity cost associated with it for example if you buy a five dollar coffee from Starbucks you are foregoing the opportunity to spend your money on something else like a ten dollar shirt at Macy's instead the birth of Economics as a separate discipline happened around 1776 when Adam Smith created an inquiry into the nature and causes of Wealth of Nations the two main branches of Economics are microeconomics and macroeconomics microeconomics is a branch of Economics that deals with the behavior of individual Market participants and the resulting interactions among these individuals and markets macroeconomics on the other hand is a branch of Economics that studies the economy as a whole not just individual markets and industries it can be applied to any country region or group of countries overall economic analyzes are often used to determine whether a particular policy will be affected or efficient in achieving its stated goals the goal might be increasing national income or reducing poverty the significance of economics has been growing in recent decades as the world becomes more globalized it is important to understand how economics affects the world and what the future holds [Music] studying economics will prepare you to think strategically and make decisions that are in the best interest of your business such as where to redeploy a profitable product or how to optimize an Investment Portfolio there is particular demand for people who studied economics or Finance as they are prepared for a range of jobs in banking and the financial sector such as accounting Corporate Finance Insurance Equity investing Etc studying economics can help people get a better understanding of our world and make efficient choices in response to the many changes that happen [Music] it provides an important perspective on people markets business and government among others [Music]