HSM 544 – Final Exam – Major Tasks of Economics

HSM 544 – Final Exam – Major Tasks of Economics.

Q. Identify the major tasks of economics and discuss why they are important. What are their roles in organization management?
Ans. The three major tasks of economics are description, explanation and evaluation. Description: is the fundamental task of economics and it includes the identification, definition and measurement of any phenomena. Through this task we can have the idea about the existing facts. This task is mostly related to facts finding. For instance, in America, in 1992 the average of 65 years older people visited physician’s office was 5.5 times each year and the average of 15 to 22 years old people was of 2.5. This statement will fall under the category of description. The process of description helps the organization in better understanding of what is happening in the company at each level that later help in improvement.
Explanation: the second task of economics is of explanation and prediction of certain phenomena. In this task there is cause and effect analysis is done. An example of explanation task is that why people of 65 years older and more use more medical care than younger people. This task helps the organization on identifying causal factors so that it can analyze how much these factors are contributing to outcomes.
Evaluation: the third task of economics is evaluation that focuses on analyzing and making judgment about the alternate phenomena according to some standard. First standard is chosen then it is used to rank the alternative means of distribution of resources that are scarce that leads to desired outcomes. This helps in creating a natural process and generating funds for the benefits of health care services.