An economics course will teach you the fundamentals you need to decipher the graphs you may associate with a typical economics course, as well as the tools to develop a successful business strategy. But, how can you know if studying economics is right for you?
If you’re asking yourself this question, consider the learning outcomes of various economics programs and how they compare to your personal and professional goals.
What Is Economics?
At its core, economics is the study of how individuals, groups, and nations manage and use resources.
Economics can be broken down into microeconomics, which looks at individual decisions, and macroeconomics, which is concerned with the economy as a whole. Both types of economics utilize historical trends and current conditions to inform business decision-making and make predictions about how markets might behave in the future.
Why Study Economics?
Students who choose to study economics not only gain the skills needed to understand complex markets but come away with strong analytical and problem-solving skills, as well as the business acumen necessary to succeed in the professional world. In fact, economics can be useful for professionals in all industries, not just in business.
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Advantages of Studying Economics
Here’s a look at seven of the top advantages of studying economics and how it can benefit both your organization and career:
1. You'll Expand Your Vocabulary
Whether it’s scarcity (limited resources), opportunity cost (what must be given up to obtain something else), or equilibrium (the price at which demand equals supply), an economics course will give you fluency in fundamental terms needed to understand how markets work. Even if you don’t use these words often in your current role, studying these economic terms will give you a better understanding of market dynamics as a whole and how they apply to your organization.
2. You’ll Put New Terms into Practice
Economics isn’t just learning a fancy set of words, it’s actually using them to develop a viable business strategy. When you understand these terms, you can use theories and frameworks like Porter’s Five Forces and SWOT analyses to assess situations and make a variety of economic decisions for your organization, like whether to pursue a bundled or unbundled pricing model or the best ways to maximize revenues.
3. You’ll Understand Your Own Spending Habits
Economics will teach you about how your organization and its market behaves, but you’ll also gain insight into your own spending habits and values. For example, Willingness to Pay (WTP) is the maximum amount someone is willing to pay for a good or service. There’s frequently a gap between hypothetical and actual WTP, and learning about it will help you decode your own behavior and enable you to make economically sound decisions.
For Shamari Benton, the concepts he learned in Economics for Managers opened his eyes to how everyday decisions are infused with economic calculations and principles.
“A simple grocery store visit becomes filled with economic references and analytical ponders,” Benton says.
4. You’ll Understand the Nuances of the Field
Many people think of economics as just curves, models, and relationships, but in reality, economics is much more nuanced. Much of economic theory is based on assumptions of how people behave rationally, but it’s important to know what to do when those assumptions fail. Learning about cognitive biases that affect our economic decision-making processes arms you with the tools to predict human behavior in the real world, whether people act rationally or irrationally.
5. You’ll Learn How to Leverage Economic Tools
Learning economic theory is one thing, but developing the tools to make business decisions is another. Economics will teach you the basics and also give you concrete tools for analysis. For example, conjoint analysis is a statistical approach to measuring consumer demand for specific product features. This tool will allow you to get at the surprisingly complicated feature versus price tradeoffs that consumers make every day.
For example, imagine you work for Apple Inc. and you want to know what part of the iPhone you should improve: Battery life, screen size, or camera. A conjoint analysis will let you know which improvements customers care about and which are worth the company’s time and money.
6. You’ll Be Better-Prepared for Graduate School
In addition to helping you make better decisions in both your personal and professional life, learning economics is also beneficial if you’re considering a graduate business degree. Studying economics can equip you with the problem-solving skills and technical knowledge needed to prepare for an MBA.
An MBA typically includes courses in finance, accounting, management, marketing, and economics, so if you do decide that an MBA is right for you, you’ll be one step ahead. Furthermore, with a foundational knowledge of economics, you’ll be able to use economic theories and frameworks to decide if graduate school is worth the investment.
7. You’ll Improve Your Career Prospects
An education in economics can improve your employability in a variety of industries. According to the World Economic Forum's Future of Jobs Report, analytical thinking and complex problem-solving skills top the list of skills that employers will find increasingly important by 2025, both of which can be gained by studying economics.
In addition, many careers require knowledge of economic concepts, models, and relationships. Some possible career paths for economics students include finance, banking, insurance, politics, and healthcare administration. You’ll also be able to further your career in your current industry, as an understanding of the economics that power your industry can help you to be more effective in your role.
Options for Studying Economics
There are many options available for those looking to pursue an education in economics. Depending on your personal and professional goals, your current stage in life, and other important factors, you may choose to pursue an undergraduate or graduate economics degree or take an online economics course.
Whether you're new to the business world or an experienced manager, having a thorough understanding of how markets work, pricing strategy, and consumer behavior is essential to success.
Do you want to take your career to the next level? Explore our eight-week online course Economics for Managers or other business essentials courses to learn how to apply economic principles to business decisions.
This post was updated on May 11, 2021. It was originally published on November 30, 2017.
