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WHAT IS ECONOMICS?

Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Greek for oikos (house) and nomos (custom or law); thus economics means “rules of the house hold.” It is a complex social science that spans from mathematics to psychology. At its most basic, however, economics considers a society provides for its needs. Its most basic need is survival; which requires food and shelter. Once those are covered, it can then look at more sophisticated commodities personal transport, entertainment, the list goes on. Today, this social science known as ”economics” tends to refer only to the type of economic thought which political economists thought which political economists refer to as neoclassical Economics. The economics is divided into various sections such as-production, distribution, consumption and exchange etc.

Production 

In economics, all those activities that have to do with the creation of commodities, by imparting to raw materials utility, added value, or the ability to satisfy human wants. The farmer who grows wheat, the miller who grinds the wheat into flour, and the baker who transforms flour into bread are examples of producers who, each in his own way, impart utility to a natural or partially processed material. Production was the major thrust of industry until at least the beginning of the 20th cent., when sales and marketing began to be considered equally important in the transference of commodities from producers to consumers.

Distribution

In economics, the allocation of a society’s total wealth among various economic groups. Distribution, in that sense, does not refer to the physical marketing or circulation of goods, which is part of the process of exchange, but to the relative well-being and economic wealth of persons and groups.

Consumption 

Process of using consumer products in order to satisfy desires and real or imagined needs so that the products are used up, transformed, or deteriorated in such a manner as not to be either reusable or recognizable in their original form.

Exchange 

Mutual transfer of goods, money, services, or their equivalents; also the marketplace where such transfer occurs, such as a stock exchange or a commodity exchange. In early human society, exchange of unessential articles, such as jewelry, was common, but no group could afford to rely on another group for the necessities of life. Gradually, division of labor led to the barter economy, in which articles were produced for exchange.

In other words economics is the study of how individual and societies choose to use the scarce resources that nature and previous generations have passed to them. In a large measure, it is the behavioral science studying individual choices and more broadly societal choices added up from them. Either you are planning the upcoming holiday against limited time or slicing a gigantic watermelon with several of your siblings, you are doing economics.

In general way economics is a social science that studies the allocation of limited resources used to produce the goods and services that satisfy unlimited consumer wants and needs. Economics is one of several social sciences (others are sociology, political science, and anthropology) which apply the scientific method to human behavior. The distinguishing feature of economics is a concern with the fundamental problem of scarcity-unlimited wants and needs and limited resources.