Economics
Economics is a social science that is applied to the production, distribution, exchange, and consumption of goods and services. Economists focus on the way in which individuals, groups, businesses, and governments seek to efficiently achieve economic objectives. General economics can be divided into two major fields:
- Microeconomics, or price theory, explains how the interaction of supply and demand in competitive markets creates a variety of individual prices, profit margins, wage rates, and rental changes. Microeconomics assumes that people behave rationally, and that consumers generally spend their income in ways that give them as much pleasure as possible. For their part, capitalists are viewed as seeking as much profit as possible from their operations.
- Macroeconomics deals with modern explanations of national income and employment. British economist John Maynard Keynes (1883–1946) explains macroeconomics as the total or aggregate demand for goods and services by consumers, business investors, and governments.
Economics of Pollution
The study of the economics of pollution as it relates to the environment must begin with an understanding of the nature of the economic system. This starting point is essential to any analysis of pollution economics because the basic cause of environmental problems is a specific type of market (economic) system failure.
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