Understanding Economics: Principles and Activities

What is meant by economics? Understanding Economics is a social science that studies human activities related to the activities of production, distribution, and consumption of goods and services.

Economic understanding can also be interpreted as anything related to effort and human power in meeting their needs to get a level of prosperity.

Understanding Economics According to Experts

1. Robbins

According to Robins, the notion of economics is the study of human behavior as a relationship between its goals and the availability of resources to achieve its goals.

2. Alfred Marshall

According to Alfred Marshall, the notion of economics is the study of humans as they go about living, moving and thinking in everyday contexts.

3. Adam Smith

According to Adam Smith, the notion of economics is an investigation of the circumstances and causes of state wealth.

Economic Principles

In accordance with the above economic understanding, the following economic principles are:

1. Production Principle

The principle of production in the economy is that the economy has a role in the procurement of products, both goods and services. Production activities require costs and effort in their implementation. With the existence of production activities it will open up jobs and produce a product.

2. Principles of Distribution

The principle of distribution in the economy is the activity of channeling a product to consumers. Distribution activities must be run with a good time calculation so that the products delivered arrive at the sales location on time.

For example, food delivery from farmers to traders in the market. The distribution of food is running at dawn so that the quality of fruits and vegetables remains good when consumers buy them.

3. Principles of Consumption

The principle of consumption in the economy is all activities related to the use of a product carried out by humans to meet their needs. For example, a builder buys tiles to replace damaged house tiles. The goal is that the roof of the house does not leak when it rains and the homeowner feels comfortable.

Economic activity

Referring to the economic understanding above, the following are economic activities:

1. Production Activities

Production activities have the aim to produce products, both goods and services. This production activity is carried out by entrepreneurs in various industries, for example farmers, ranchers, consultants, and others.

Products created from production activities are then distributed to consumers to meet their needs. So, the purpose of production activities is to meet the needs of consumers.

2. Distribution Activities

Distribution activities aim to distribute products from one location to the closest location to consumers. This distribution process is a combination of various activities, including; activities of transportation of goods, packaging, storage, standardization of quality of goods, and others.

That is, the distribution process has many activities that are interrelated to one another. And the final goal is the distribution of products to consumers can arrive at the right time and goods in good condition.

3. Consumption Activities

This consumption activity is the activity of using products (goods / services) to meet consumer needs.

That is a brief explanation of the notion of economics, economic principles, and economic activity in general. May be useful.

Eka Wahyu Budi Santoso

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