Economics

Economics is the study of how people, individually and collectively, allocate their limited resources to try to satisfy their unlimited wants. Here are a few definitions of economics:

• Economics asks what goods are produced, how these goods are produced, and for whom they are produced.

• Economics analyzed movements in the overall economy – trends in prices, output, unemployment, and foreign trade.

Outputs are transformed materials; the results of production.

• Economics is the study of commerce among nations.

• Economics is the science of choice.

• Economics is the study of money, banking, capital, and wealth.

Capital is all physical improvements made to natural resources that facilitate production, including buildings and all machinery and equipment.

Wealth is the value of the assets owned by an individual or a group of individuals.

Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people.

Macroeconomics studies the functioning of the economy as a whole, and microeconomics analyzes the behavior of individual components like industries, firms and households.

I think you suggested that our economic knowledge serves us in managing our personal lives, in understanding society, and in improving the world around us.

In economics, we must be careful to distinguish between positive statements and normative statements.

Positive economics describes the facts and behavior in the economy.

Normative economics involves ethical precepts and value judgments.

Scarcity occurs because human wants exceed the production possibility with our limited time and resources. Economics is grounded in the law of scarcity, which holds that goods are scarce because people desire much more than the economy can produce. Economic goods are scarce, not free, and society must choose among the limited goods than can be produced with its available resources. The law of scarcity means that when we can't have something, we want it more. And when we know we can have as much as we want of something, we want it less.