Definition of Economics ,Economics is both Science and Art,Origin of Economics,Scarcity and Choice
Economics is the study of how people allocate their limited resources to their alternative uses to produce and consume goods and services to satisfy their endless wants or maximize their gains. Economics is the social science that studies how people use scarce resources to satisfy unlimited needs and wantsEconomics studies economic phenomena systematically and methodically.This approach to economic inquiry imparts economics the status of a ‘social science’.
The subject mmatter of economics continues to grow and expand in scope,size and character right from the days of its founders,Adam Smith to date.Boundaries of economics science are not yet precisely marked ,nor can it be.In the opinion of some economists,”Economics is still a very young science and many problems in it are almost untouched”(Charles Schultz) and “Economics is an unfinished science”(Zeuthen).Yet, economics is claimed to be “the oldest and best developed of the ‘social sciences’ and continues to grow in content and level of analytical sophistication.However, the mainstream economics is divided,though imperfectly,into two major branches.ie;Microeconomics and Macroeconomics.
Economics is both Science and Art:
Origin of Economics:
Scarcity and Choice(Basic economic problems/issues):
Scarcity, in general terms, means that the demand for something is much greater than the supply, or there is not enough money to buy it. The exact definition in economics is that there are insufficient resources to satisfy everyone’s needs and wants. Whether you’re talking about oil, from which we get the gasoline that powers most of our cars, or corn, even seats in a movie theater, there isn’t enough for everyone to get what they want at a zero price. You know something is scarce if you try to offer it for free, and you don’t have enough of it for everyone who stands in line to get it.
So, how does a society decide who gets what? Producers charge a price for it. That way, whoever values it the most will pay the most for it. This is how scarce resources are allocated, or divided up and distributed, efficiently in our economy. When you go to the store, you can’t buy everything you want, so you must make choices to buy one thing instead of another. If you walk into the store with $50 and the store offers you 500 different items, you’re only going to walk out of that store with a cart full of stuff that totals $50. Scarcity always leads to choice, and people can actually make better decisions because they have a better understanding of how much each choice costs.