What is the importance of understanding economics?

Harley Olustee: What is the importance of understanding economics?
I’m taking economics and we have an essay on the subject. They said to have at least one paragraph on what we could find on the internet. I figured this counted.

Answers and Views:

Answer by ChocolateCoveredGoodness
The country can make better decisions if it understands economics.

Sometimes the “obvious” answer is the wrong one, and economics can help clear up the confusion.

For example, when one country puts up trade barriers to protect its local goods. Another country might think to put up trade barriers too, in order to punish them. But economics tells us that both countries will end up hurting their people.

Here’s another. When gas prices were going up in the 70’s, the government figured that it would put a cap on the prices. So no gas station was allowed to raise its prices past a certain amount. Sounds good enough at first, right. Because it seems like they are trying to help the little guy out by not letting prices get too high. Wrong, they ended up hurting everyone. Gas shortages spread throughout the entire country. People had to wait hours in line to get gas. They finally stopped that idea, realizing their foolishness.

Basically economics says that you can’t commit an action without expecting something else to come back to you. And it is a very important lesson for people in government and, more importantly, the voting public that puts them in office.

Answer by fromeasternworld
Starting with the most general value, economics is all about a material life, If you distinguish it from a spiritual life. It deals how people can live better in material wealth. And, in term of being better, economics explains how to achieve economic growth at a minimum inflation rate, which are the economic goal for most countries in the world. However, you, as a student, probably should study the very fundamental theories and concepts to establish your understanding and opinions before reaching to the final stop.
Although many ordinary people believe economics is all about money, it’s not necessarily entirely True. There are various schools of economic theories: Marxism, Classical, Neo-Classical, Keynesian, Neo-Keynesian, Monetary, etc. Each of them has a little different perspective to see an economy differently; as a result, none of them completely agreed with one another. Only one school among them, Monetarists, focus mainly on money. As you study economics, you’ll eventually hear about all of them.
Generally speaking, better economic system can contribute on people’s well-being, including getting the poor out of poverty. For you as an individual, better understanding of economics will help you understand your own life and plan for a better life. Starting with understanding of scarcity, opportunity cost, marginal cost, marginal utility, demand, supply, price system, importance of competition, and so on and on, economics will lead you to understand the world better.
Personally, I still remember how widely I could open my eyes after I studied macroeconomics. As you study economics more and more, you’ll find your view becoming quite different.