What Do We Mean By The Term Thinking Like An Economist (Essay Sample)
In your own words, define " What do we mean by the term Thinking like an Economist" and why this is important for students in a business program to understand economic concepts.
Thinking like an economist can be perceived as the ability to solve market hitches. However, this kind of thinking can be used in areas outside the field of economics. This kind of thinking helps people in various ways such as avoiding making unreasonable decisions and aid them in understanding the world around them CITATION Cle03 \p Para.5 \l 1033 (Clement Para.5). Thinking like an economist can be defined as assessing facts without involving rational fallacies and ideas which can easily control decisions. Once a person learns to think like an economist, they start to make effective decisions in their daily activities. The economic theory about the scarcity of resources requires people to efficiently utilize the resources. Therefore, an economist evaluates the cost of people’s choices and helps them in determining the best choices to gain maximum utility while minimizing costs.
People who think like economists understand the concept of incurred costs that may not be recovered irrespective of the future outcome. For example, an economist helps people in overcoming some of the pervasive delusions such as sunken cost CITATION Cle03 \p Para.8 \l 1033 (Clement Para.8). When people incur sunken costs, they view this as a waste of resources, but economists perceive this as useful. Additionally, an economist appreciates that the cost of something is what someone gives up CITATION Cle03 \p Para.5 \l 1033 (Clement Para.5). In this co
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