The study that deals with how goods and services are produced, distributed, and consumed refers to the term economics. It is a social science, and came from the Greek word oikos which means house and nomos which means custom or law, combining these two words together, yield to a new word which means “rule of the house (hold)”.
There had been several definitions of economics since the 19th century. W. Stanley Jevons defined economics as the mechanics of utility and self interest.
During the early 20th century, Alfred Marshall gave definition to economic on his book Principles of Economics, which had became the most influential book in economics. He defined economics as the study of wealth and a study of man. Some books defined economics as the study that deals with the exchange and production.
However, this definition was not usually used today because they found out that it is far beyond the borders of economics. Moreover, other books had defined economics entails the concept of choice and scarcity. The definition of economics had been widely varying since there have been so many authors who had used different words in their definition.
Supply and Demand
The quantity of a product or service that a buyer wants is what was called the demand in the economic concepts. An amount a buyer is willing to buy at a given price refers to the demanded quantity of a product or a service. There is a relationship formed between the price of a certain product or service and the demanded quantity. This refers to the demand relationship.
The number or quantity of a product or service the market can offer is called supply. Upon getting a certain price of a product or service, the producer of that certain product or service would create a number of supplies.
The quantity supplied refers to the amount those producers, at a certain price, are willing to produce. The supply relationship is the relationship of the amount of product or service to be produce and supplied by a certain producer in the market and its price.
The national income, unemployment, inflation, investment, and the international trade are the main concerns of the study of macroeconomics. The study and understanding of the determinants of collective patterns and trends in the economy are also involved in the study of macroeconomics.
Thus, macroeconomics is defined as a branch of economics, which deals with the economy’s behavior, structure, and its performance as a whole.
The decision to where the limited resources are to be allocated and how its behaviors have an effect on the supply and demand for goods and services, where the prices were determined, and conversely how these supply and demands of goods and services were determined by the prices, usually in places where goods and services are being bought and sold, are the areas examined by microeconomics.
Thus, microeconomics is defined as a branch of economics which deals with the decision on where to allocate the limited resources and how individuals, households, and firms come up with this decision.
The unit change in supply (which refers to supply elasticity), or a change in a unit of demand (which refers to the demand elasticity), caused by a change in the price of an item. This measure of responsiveness relative to the amount of change is called elasticity.
Inelasticity is the lack of elasticity. That is, the inability to response or being inadaptable to a change in supply or demand caused by the changed in the price of an item.
The total market value of all the final goods and services that has been produced within the country in a given period of time is called the Gross Domestic Product. It is the value equal to the total of the consumption, investments and of the government spending, plus the value of exports, minus the value of imports.
There is an increasing nurse shortage that is happening and if forecasted to continue to increase. The reason for this increase in the nurse vacancy rate is due to the retirement of the nurse professors. They are retiring from teaching and choose to go back in the field where there is more money they can earn.
Comparing the average salary of a nurse professor with a master’s degree of $60,357 to a nurse practitioner with the equivalent education who was earning $80,697 is relatively the main reason why the nurse professors return to the field.
That is 34% more money, working at an emergency department than teaching in front of the nursing students. Leaving their rooms would imply a loss of instructors that would teach the nursing students. And so, the production or supply of nurses would be lesser.
Relating this incident to the law of supply, this states that there is a high supply (greater number of nurses returning as a medical staff) if the price of that good or services is also high (the average salary of a medical staff). The supply is directly proportional to the price of a product or service. In short, the supply is high if the price of a product or service is also high