Why Study Economics?

In This Article

1. What Is Economics?

2. Microeconomics vs. Macroeconomics

3. 7 Reasons To Study Economics

4. Why Is Economics Important?

5. Topics You Can Study in Economics

6. Studying Economics FAQs

The word economics can conjure certain images in your mind. Money. Wall Street bankers. The stock market.

But economics is much more than that.

Economics is a subject for you if you’re interested in:

• Money

• Banking

• Business

• Investment

But what if you’re interested in other areas?

Things like:

• Public health

• Climate change

• Education

• Criminal justice

• International trade

• Politics

• Global development

Then you may be surprised to learn ‌economics has a place for you as well. Let’s dive into why economics is an amazing topic.

What Is Economics?

Economics is the study of how individuals, families, businesses, and governments secure and improve their material living standards.

Many definitions of economics are out there, but one of my favorites is called the “scarcity definition of economics.” It comes from a 20th-century economist named Lionel Robbins. Robbins described economics as “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”

In other words, economics studies any situation where scarcity causes people to make trade-offs as they pursue a goal.

Robbins’ definition should give you an appreciation of why economics has such wide applications. We never have enough time, energy, or money to have or do everything we want.

Scarcity and Trade-off Examples

Scarcity is all around us. When you think about dinner tonight, you’ll face trade-offs as you decide what to eat or whether you should cook or order in.

When you choose a major in college or a career path after you graduate, you’ll face trade-offs. Will you choose a career you’re passionate about or one that pays well? Will you work a remote job or one with a long commute but great office amenities?

Households, businesses, politicians, governments, and all other types of human organizations face daily trade-offs as well. Families navigate decisions like whether to rent or buy a house. Couples decide whether to get married and have kids. Parents face decisions about whether to spend more time at work or with their children.

Firms must decide who to hire and how to invest their time and resources to grow their business. Non-profits like schools have limited seats and teachers to serve their students, and every day they face tradeoffs as they try to decide how best to educate.

Decisions made at every moment all around the world involve scarcity and trade-offs. As Lionel Robbins put it: “Everywhere we turn, if we choose one thing, we must relinquish others […] Scarcity of means to satisfy ends of varying importance is an almost ubiquitous condition of human behavior.”

This is why economics has applications in almost every aspect of our lives.

Microeconomics vs. Macroeconomics

The field of economics is divided into 2 approaches:

1. Microeconomics

2. Macroeconomics

Microeconomists are the portrait photographers of economics. They study the decisions and behavior of:

• Individual consumers

• Households

• Organizations

• Businesses

• Government agencies

A microeconomist might study why a particular school district is outperforming others on a national exam, or they might study how a specific industry has responded to globalization.

Macroeconomists are the landscape photographers of economics. They study the overall health and stability of entire economic systems. They look at aggregate figures like:

• The value of all goods and services produced in an economy (GDP)

• The total number of people who are employed or unemployed in the economy

• The overall increase in prices from year to year (inflation)

Microeconomics studies the choices and behavior of individual actors in the economy.

Macroeconomics studies the economy as a whole.

7 Reasons To Study Economics

Getting an economics degree or even ‌taking a few economics courses can provide you with the following benefits.

1. You’ll gain an international perspective and a better understanding of the world around you.

2. You’ll learn a set of critical thinking and problem-solving skills that employers across the private sector, public sector, and non-profits look for in potential employees.

3. You’ll learn the language of business and finance.

4. You’ll become a more engaged and informed citizen.

5. You’ll learn to work with data.

6. You’ll be better equipped to make big life decisions like choosing where to live, building a career path, and buying a home.

7. You’ll learn to manage your personal finances better, which means you’ll learn how to lower your debt and build savings and wealth.

If you need more reasons to study economics, one online course covers how relevant it is in our everyday lives. Outlier.org’s Principles of Economics paints an easy-to-understand, big picture of economics in our world:

Why Is Economics Important?

Virtually every problem facing the world today has an economic component. If you want to be part of the effort to fight climate change, or if you want to be involved in responding to global health issues like pandemics and world hunger, you need to know economics.

If you want to be an entrepreneur, an influencer, a global business leader, a diplomat, or a local politician, you’ll need to know at least some economics. And the more you know, the better you’ll be at your job. Even teachers, lawyers, and doctors can benefit from learning the basics of economics.

It’s hard to overstate how crucial economics is. Even if you have no desire to learn economics for the sake of your job, a little background in economics can make you a more informed citizen and help you navigate major decisions in your life.

You’ll be surprised at how even an introductory course in economics can help you make better sense of the news, a new job offer, a credit card statement, a health insurance package, or a mortgage application.

Topics You Can Study in Economics

As an economist, you can study a wide range of topics. You can study them from a microeconomic perspective or a macroeconomic perspective.

Here’s a list of some topics you can study in economics. Some may surprise you!

• Inequality and poverty

• Behavioral economics

• Game theory

• Finance

• International business

• Environmental economics

• Innovation

• Money and banking

• Entrepreneurship

• Market design

• Economic history

• Trade and globalization

• Immigration

• Education

• Public policy

• Digital currencies like Bitcoin and other cryptocurrencies

• Labor and worker protection

• Healthcare economics

Studying Economics FAQs

What course in economics should I take?

If you only take one or two courses in economics, you’ll likely sign up for a Principles of Economics, Introductory Microeconomics, or Introductory Macroeconomics course.

A Principles of Economics course will give you a basic introduction to micro- and macroeconomics.

An Introductory Microeconomics course introduces you to economics but from an entirely microeconomic perspective. Introductory Macroeconomics does the same from a macroeconomic perspective.

In addition to these introductory courses, you should look at your economics program’s course offerings for electives that pique your interest. For example, if you are interested in the minimum wage and labor unions, you could take a course in labor economics. If you’re interested in the stock market, you might want to take a course in finance.

What courses will I have to take as an economics major?

If you want to major in economics, you’ll typically be asked to take 24-28 credits for the major. This means, ‌in addition to introductory courses, you will take about 8 or 9 additional courses in the subject.

Most economics departments require completion of intermediate-level microeconomics and macroeconomics courses. These intermediate courses are similar to their introductory counterparts but typically involve more math and analytic rigor.

Most programs also require 1 to 3 math, statistics, and/or econometrics courses. Econometrics is the application of statistics to economic data.

Finally, in addition to required courses for the major, you’ll be free to choose several electives that match your interests.

Do I need to be good at math to major in economics?

You do not need to be good at math to take a few economics courses. Majoring in economics does involve math and statistics. But by no means do you have to be a math whiz to get your degree in economics. If you think you’d be interested in economics, but you’re intimidated by the math components, reach out to faculty, advisors, classmates, and tutors in your program. Most schools offer additional support for students who need an initial leg-up in math, and getting help early on will help you thrive in your program.

What about graduate school?

Economics is an excellent major to choose if you are interested in applying to graduate school programs. This is especially the case if you are considering applying to business school or law school, or if you are planning to pursue a graduate degree in finance, economics, political science, or another social science.

Will studying economics be good for my career?

Yes. Economics majors, on average, have better employment prospects and career options than the average college graduate. Starting salaries and employment rates are higher for economics majors than most college majors.

That being said, think about what you would like to pursue as a job. Try to understand how the skills and knowledge you’ll gain in economics will help you succeed in your desired career.

Is economics important in everyday life?

Without a doubt! Economics can help you manage your personal finances and make decisions in your daily life. It will help you make better sense of politics, the news, and your career. It can even help you appreciate how you spend and value your time. The concepts and transferable skills you learn in an economics program can be applied in the real world.

What career paths do economics majors typically choose?

You'll have plenty of career opportunities with a bachelor’s degree in economics. In the private sector, economics graduates commonly work in finance and business as analysts, actuaries, bankers, accountants, or consultants.

Graduate students with a master’s degree or Ph.D. in economics often become academic economists at colleges and universities. Or they can become economic advisors or senior analysts for non-profits, businesses, or governments.

Now that you’ve discovered how economics is relevant and beneficial, plan your next steps to learn more. Articles, videos, or economics-related books are a good start. You can also take one or more courses. Whatever the path, increasing your understanding of economics will enrich your life.

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