what's the role of economic theories in our life???

Question

pls elaborate if you can

Answer 1

Economics helps you understand what's going on around you. When you buy a Starbucks, do you understand how & why hundreds of people got together to plant the seeds, grow the beans, arrange the transportation, built the store, hired the people & then ensured they all got to your store just in time for you to walk in?
And why is it that you pay only 10c to supersize at McDonalds yet it cost $2 for the entire meal?
And why should you pay your taxes?
etc etc

There's loads of great books on Economics (Freakeconomics, Armchair Economist etc) that explain why economic theories are profoundly important for better relating to the world around you

Answer 2

Economic theories help shape policies and the policymakers thinking of many of the organizations that tie us together as humans.

Government, businesses, agencies, groups, local clubs and so forth all have foundations built on economic theory whether they know it or not. Economics is simply the study of how scarce resources are allocated. Economic theory tries to explain or predict which policies will best lead to the desired results.

So, what the heck does that mean? Ask yourself why we allow 10-15 (or more) airlines to exist. Wouldn't it be much more efficient just to have one? Just one example of efficiency gain is that you could consolidate 10-15 accounting departments into one. So, why does having 10-15 (or more) work?

Because each of the airlines is constantly trying to beat the other airlines. And, generally, that means serving the customers better and innovating and reducing costs. What incentive would one national airline have to do this?

Answer 3

I think J.M. Keynes said it best:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.

[End of quote]

In other words, economic theories (especially when they are poorly understood) are important because they are used to justify government policies.

Answer 4

One's economic philosophy, which may be unconscious, but is always there, is one of the most important mental and moral filters through which he understands his world and his experiences. It colors many decisions and attitudes. If someone believes in self-reliance and enterprise, he may be less victimized by circumstances and more resilient in the face of setbacks.

A free, democratic society like the U.S. is heavily influenced by competing economic philosophies in electing representatives and supporting government programs.

Answer 5

What can I say? the first two answers were perfect. The third one was good also.