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Tarron Khemraj Article analysis In understanding economics first summarize what is economics. No universally definition of economics. Although it defined as the study of how individuals and groups make decisions with limited resources, coordinate their wants and desires, given the decision mechanisms, social custom, and political realities of the society. Economic are operative in aspect of lives, market forces of goods sold in a market but supply and demand also used to analyzes situation in which economic forces operate. In addition to the study of economics, coordination refers to how the three central problems facing any economy solve. These central problem are what and how much, to produce, how to produce it, and for whom to produce it. We find economies as inevitably individuals want more than is available, given how much they are willing to work. The economic theory divided into two parts, stated that as microeconomics is the study of individual choice and how that choice is influenced economic forces, microeconomics studies things as the pricing policies of firms, households’ decisions on what to buy and how markets allocate resources among alternative ends. The invisible hand theory comes from microeconomics that states that economists call the invisible hand theory, a market economy, through the price mechanism will tend to allocate resources efficiently. Good economic policy analysis is objective; it keeps the value judgments separate from the analysis. The distinction between objective and subjective analysis, economists has divided economic into three categories, positive economics, normative economics, and the art of economics. Positive economics is the study of what is and how the economy works, Normative economics is the study of what the goods of the economy should be, and the art of economics called the political economy is the application of the knowledge learned in positive economics to the achievement of the goals one has determined in normative economics. To express the law of demand is to the invisible hand ability to coordinate individuals’ desires, as prices change, people change, and their willing to buy. The law of demand states the quantity demanded of a good is inversely relate to the price of those good, other thing constant. As the price of a good goes up, the quantity demanded goes down, so the demand curve is downward sloping if the price of demand goes up, people will tend to buy less of it and buy another product instead. In addition, the law of supply corresponds to the law of demand states the law of supply, is quantity supplies rises as prices rises, other things constant or alternatively, quantity supplied falls as price falls, other things constant whereas the price determines quantity supplied just determines quantity demanded. Likewise, the law of demand, the law of supply is the market ability to coordinate individuals’ action. While the law of supply firm’s ability to switch from producing one well to another that is to substitute. The price of a good a person or firm supplies raises individuals and firms can rearrange their activities in order to supply more of that Good to the market. As those higher profit leads to increase output as price rises, a supply curve is the graphical representation of the relationship between price and quantity supplied. The terms that matter about supply and demand is not the label, but how the concepts interact. In which neither suppliers nor consumer collude and in which prices promote the forces of supply and demand interact to arrive at equilibrium, a concept in which opposing dynamic forces cancel each other out. Although the Equilibrium price is the price toward which the invisible hand drives the market, the equilibrium price, quantity demanded equals quantity supplied. When quantity supplied do not equal quantity demanded the outcome is either excess supply or excess demand, and a tendency for price to change. As this happen the consumers will increase their quantity demanded, and the movement toward equilibrium caused by excess supply is both the supply and demand sides. When the excess supply occur quantity supplied is greater than quantity demanded. While the reverse of excess demand quantity demanded is greater than quantity supplied. The excess demand pushes prices upwards in decreasing the quantity demanded and increasing the quantity supplied. This movement takes place along both the supply curve and the demand curve. The price adjusts to rise when the quantity demanded exceeds the quantity supplied and for price to fall when the quantity supplied exceeds the quantity demanded is a central elements to supply and demand. Although individuals tendencies to change prices exist as quantity supplied and quantity demanded differ the changes in price brings the law of supply and demand into play. Whenever the quantity supplied and quantity demanded are unequal, price will stay the same cause no one will have an incentive to change. One thing to remember equilibrium is not the model framework they use to look at the world. Although to establishing the current value of a consumer product Economics has evolved through the centuries there are a few factors that led to a change in supply and a change in demand. Whereas, the demand side, prices of a substitute or complimentary good can cause demand to change. For example, the cost of chicken goes up, consumer shifts toward turkey. Also in general, peoples preferences, which can be influence by marketing and surroundings will influence demand. Another example would be of a report that a famous celebrity went on defence, as saying that beef cause cancer; can imagine what happen to demand for beef While the supply side, look for things like the availability of resources used to make a good, perhaps the discovery of a natural resource or if a good becomes less expensive to make. For instance, if an environmentally company discovers a million dollar may expect the cost of gas to go down. The cost of silicon goes down, it might drive down the cost of computers, as silicon is use to make CPUs and Motherboards, the main components in computer hardware. Price fluctuations, is a strong factor affecting supply and demand. When a product arrives at expensive enough that the average consumer no longer believe it is worth it to buy the product, the demand declines. This leads to cuts in production that will stabilize the products value. Lowering the price of a product may increase demand, indicating that the public think the product is suddenly a value. This may also cause changes in production to increase to keep up with the demand (Lee Morgan). Another, factor that lead to a change in supply and a change in demand were changed in income level and credit availability can affect supply and demand in a major way. The housing market is an example of this type of impact. During a recession when there are fewer jobs available, and there is less money to spend, the price of homes tends to drop. Also the availability of credit may be less because of the average person inability to qualify for a loan. To help encourage those who can afford to buy, prices fall and lower interest rates appear to help boost the sales. When there is an economic boom, unemployment is very low and people are spending money, the price of homes and other major purchases tends to rise and so do interest rate. The seasons can affect supply and demand drastically. The supply and demand for toys peaks around Christmas, and turkey sells like crazy at Thanksgiving. Fireworks experience a boom at the Fourth of July in America. Meanwhile, economists say economics a science, cause, a branch of moral philosophy has developed over time to become a discipline that emphasizes a scientific approach to understanding how economies work. As social scientists, along with sociologists, psychologists and political scientists, economists employ scientific methods to the study of how societies allocate scarce resources to meet their needs and wants. According to Harvard economist N. Gregory Mankiw, author of Principles of Economics and a former White House adviser, calls the scientific method, which requires the development and testing of theories, the essence of science. In economics, this means developing theories about such questions as what causes inflation why people save or consume. To explain these and other economic issues, an economist develops hypotheses collect and analyzes data, and formulates theories based on their results. Economists may revise or refine existing theories in response to further examination and analysis that advances (Shane Hall) In conclusion, Economists develop their theories about how the worlds of economics and finance work based on extensive observation of real-world activities.