Economics – The origin, meaning and history of the word

We study about various theories of economics,  different models and aspects in detail quite often . But do we focus on the basis of economics? Why do we study economies? What are the problems of economics?

Let’s take a break from all the detailed studies of economic concepts and focus on the root of economics. Starting with basic definition of economics.

ECONOMICS , in simple terms, is the study about how society chooses to use to its resources so as to maximize the level of satisfaction.

Economics is considered as the “Social   Science” . The word ‘Social’ is used as it deals with society and human behaviour. On the other hand, we use the word ‘Science’ as it includes study of theories in the systematic ways.

Economics is all about making choices between the limited available resources. It makes sure that all the available resources are put to best use.

After giving the definition of economics, let’s turn to our next question – ‘ Why do we study economics?

We have unlimited wants, but limited resources. Putting in simple words, we can say, that we study economics because of Scarcity. Scarcity means available resources are less than the demanded. Hence, we use the tools of economics to optimize the use of available resources.

While working on this, there are many economic problems that arises. What are these problems?

Economic Problem is a problem that deals with making the choices in such a way that it involves satisfaction of unlimited wants out of limited resources that have alternate uses. This statement highlights three basic reasons for the problem ;

1. Scarcity of Resources as resources are very limited.

2. Unlimited Human Wants as human wants can never be fully satisfied.

3. Alternate Uses as a particular resource can be put in more than one use. For example, milk can be used for various purposes.

Hence, economics is not just a subject of theory, it deals with all the situations that we face in our daily life. After studying the basics of economics in bit detail , in the next article we will turn to the ‘ECONOMY’ and “Central Problems of Economy.”

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