Economics
Topic: Scarcity, Choice and Economic Systems · NCERT: Class 9, Ch 8 "Building Blocks in Economics: The Problem of Choice"; Class 11, Ch 1 "Introduction (Statistics for Economics)"; Class 11, Ch 8 "Use of Statistical Tools"
Meaning
Economics is the study of how people and society choose to use scarce resources that have alternative uses (resources that are limited and can be put to more than one use). They use these resources to produce goods that satisfy wants, and they share those goods among persons and groups. The word comes from the Greek oikonomia: oikos (household) + nemein (management). So it began as "household management". Definitions changed over time:
- wealth: Adam Smith, 1776;
- welfare: Alfred Marshall, 1890, "the study of mankind in the ordinary business of life";
- scarcity: Lionel Robbins, 1932;
- choice and growth "over time": Paul Samuelson.
Example
A state government has a fixed budget. It must decide how much to spend on roads, how much on hospitals, and who benefits. How it makes and shares out these choices is the subject of economics.
Don't confuse with
- Economy: the economy is the actual system of production, distribution, trade and consumption in an area. Economics is the study of such choices.