The Economizing Problem - and Its Direct Effect on the Economy at Large. a Short Essay from Islamic Perspective by Mustafa Aydemir V0.4
These Short Essays are partial fulfillment of Paper IE1001 of Part 1 of Certified Islamic Finance Professional (CIFP) [DRAFT V0.4]
INCEIF
Student Name: Mustafa Aydemir Student ID: 1200279
IE1001 Assignment in Islamic Economics - Short Essay No 1 by Mustafa Aydemir - Version 0.4.doc
-1-
Bismillahirrahmanirrahim The economizing problem - And its direct effect on the economy at large. A short essay from Islamic perspective by Mustafa Aydemir Human beings are greedy by nature and their needs are universally recognized as infinite. A simple prove for this statement is the wish of every person to live forever. The unlimited wants are the main reason that resources are considered insufficient or scarce. This is probably the strongest argument and a good justification to define an entire field of study to explain and solve the resulting economizing problem between unlimited needs versus limited resources. “Economics is the social science that studies the allocation of scarce resources to satisfy unlimited wants” (INCEIF Lecture Notes1), It is divided into Macro- and Microeconomics. The former is the field of economics that studies the behavior of the economy as a whole, and not just on a singular company, but entire industry sector and markets. Whereas, the latter focuses on supply and demand as well as other forces that determine the price levels seen in the economy.
The previous section described the economizing problem, that is the relation between the scarcities or resources relative to ‘needs and wants’. People are self-interested economic agents that maximize their own utility by using goods and services (Williamson, 1985)2. In the capitalistic worldview, people are rational in their choices and would for example prefer a job paying 3000 USD salary over a job with a 1500 USD pay. The individual is looking after his own well-being, which is likely to increase by taking the higher income employment.
INCEIF
Student Name: Mustafa Aydemir Student ID: 1200279
IE1001 Assignment in Islamic Economics - Short Essay No 1 by Mustafa Aydemir - Version 0.4.doc
-1-
Bismillahirrahmanirrahim The economizing problem - And its direct effect on the economy at large. A short essay from Islamic perspective by Mustafa Aydemir Human beings are greedy by nature and their needs are universally recognized as infinite. A simple prove for this statement is the wish of every person to live forever. The unlimited wants are the main reason that resources are considered insufficient or scarce. This is probably the strongest argument and a good justification to define an entire field of study to explain and solve the resulting economizing problem between unlimited needs versus limited resources. “Economics is the social science that studies the allocation of scarce resources to satisfy unlimited wants” (INCEIF Lecture Notes1), It is divided into Macro- and Microeconomics. The former is the field of economics that studies the behavior of the economy as a whole, and not just on a singular company, but entire industry sector and markets. Whereas, the latter focuses on supply and demand as well as other forces that determine the price levels seen in the economy.
The previous section described the economizing problem, that is the relation between the scarcities or resources relative to ‘needs and wants’. People are self-interested economic agents that maximize their own utility by using goods and services (Williamson, 1985)2. In the capitalistic worldview, people are rational in their choices and would for example prefer a job paying 3000 USD salary over a job with a 1500 USD pay. The individual is looking after his own well-being, which is likely to increase by taking the higher income employment.