Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economicscomes fromthe Greek for oikos(house) and nomos(custom or law), hence"rules of house(hold)".
Economics is customarily divided into microeconomics and macroeconomics. Of major concern to macroeconomists are the rate of economic growth, the inflation rate of unemployment.
Specialized areas of economic investigation attempt to answer questions on a variety of economic activities; they include agricultural economics, economic development, economic history, environmental economics, industrial organization, international trade, labour economics, money supply and banking, public finance, urban economics, and welfare economics.
Socialist in mathematical economics and econometrics provide tools used by all economics overlap with many other disciplines, notably history, mathematics, political science and sociology.
Economist study our everyday live and the system wich affects our lives. The economist tries to describe the facts of the economy in which we live and teies to describe how the sistem works. Therefore his methods should be objective and scientific.
Most people must work to earn the living. If they coulf get food, clothes, and shelter without working, they probably would not work. But, they work to produce goods and services, and this is called economic activity. All the economic activities make up the economic system, which is very complex.
The science of economics is concerned with all our material needs and wants, it is not just concerned with basic needs like food, clothes and shelter; and if we wish to learn about the science of economics, we must study both books and people.
A definition that captured much of modern economics is that of Lionel Robbins in a 1932 essay: " the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses". Scarcity means that available resources are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no economic problem. The subject thus defined involves the study of choices as they are affected by incentives and resources.
Areas of economics:
- microeconomics and macroeconomics
-positive economics and normative economics
-mainstrem economics and heterodox economics
One of the uses of economics is to explain how economies work and what the relations are between economic players(agents) in the larger society.
Methods of ecobimic analysis have been increasingly applied to fields that involve people(officials included) making choices in a social context, such as crime, education, the family, health, law, politics, religion, social institutions, and war.
Adam Smith, generally regarded as the Father of the Economics, author of the" An Inquiry into the Nature and Causes of the Wealth of Nations", commonly known as "The Wealth of Nation".
Althoght discussion about production and distribution have a long history, economics in its modern sense is conventionally dated from the publication of Adam Smith's " The Wealth of Nation" in 1776. In this work Smith defines the subject in practical terms:
"Political economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects: first, to supply a plentiful revenue or product for the people, or, more properly, to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign"
Smith reffered to the subject as "political economy", but the term was gradually replaced by " economics" after 1870.
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