Why is a diamond priced so much more than water which is essential for survival? This puzzling question is known as the Diamond-Water Paradox.
The act of saving is preached as a virtue from a young age. However, if every family practices this virtue in excess, it can become detrimental to the economy. Families could even end up saving less! This conundrum is known as the Paradox of Thrift.
We welcome you to begin your life-long journey of learning Economics in RI. Economics is a social science which studies human decision-making. Scarcity is the condition where limited resources are called upon to meet the growing and unlimited wants of people. Decisions must be made on the use of these limited resources to best meet the wants of society. Whenever decisions are made, opportunity costs are incurred. In using limited resources to meet a certain want, some other want must be compromised. For example, the use of timber resources to manufacture paper compromises the conservation of forests to act as carbon sinks. Scarcity, decisions and opportunity costs lie at the heart of the study of Economics. Economics provide a set of tools to understand and evaluate human decision-making.
Economics is broadly categorised into Microeconomics and Macroeconomics. Microeconomics is a branch of Economics that studies the decision-making of individuals and businesses, and the impact of these decisions on markets. Microeconomics will provide you with a framework to analyse and explain many market-level phenomena including the fluctuation of prices of commodities such as steel and oil, the dominance of certain industries such as banking and telecommunications by large firms, and the active role played by governments in breaking up and regulating monopolies. Macroeconomics studies the decision-making of the economy as a whole. Topics such as Gross Domestic Product (GDP), unemployment rate, inflation rate, exchange rate, fiscal budget and international trade are analysed in Macroeconomics. Macroeconomics equips you with the tools to appreciate and critically analyse current events and issues such as the US twin deficits in its government budget and current account, US-China trade war, sustainable and inclusive economic growth, among many others.
If you are excited in wanting to understand, analyse and critically evaluate the happenings of the modern economy, we welcome you to start your life-long journey of learning Economics with the RI Economics Department.