Introduction to Economics

The word ‘Economics’ is derived from the Greek word ‘Oikonomia’ which can be divided into two parts :

(a) ‘Oikos’, which means ‘House’, and

(b) ‘Nomos’, which means ‘Management’.

Together they mean managing household. The coverage of economics is broader than the meaning of the word ‘Economics’.

Economics is a social science. It is called “social” because it studies mankind of society. It deals with aspects of human behavior.

It is called science since it studies social problems from a scientific point of view.

The development of economics as a growing science can be traced back in the writings of Greek philosophers like Plato and Aristotle.

Economics was treated as a branch of politics during early days of its development because ancient Greeks applied this term to management of city-state, which they called “Polis”. Actually economics broadened into a full fledged social science in the later half of the 18th century.

People have limited number of needs which must be satisfied if they are to survive as human beings.  Some are material needs, some are psychological needs and some others are emotional needs.

People’s needs are limited; however, no one would choose to live at the level of basic human needs if they want to enjoy a better standard of living. This is because human wants (desire for the consumption of goods and services) are unlimited.

The major economic problems are (i) what to produce? (ii) How to produce? (iii) When to produce and (iv) For whom to produce?

Reference:

ICSI

Shivaji University

LPU

Calicut University

Rai University

Pondicherry University