Definition by Maryana Luchynets

Maryana Luchynets

Gr.13

MP-1 “Finance”

Sentence definition
Economics is the social science that studies the production, distribution, and consumption of goods and services.
Extended definition
Economics is the social science that studies the production, distribution, and consumption of goods and services. Dimensions of production include measurement - how much, how efficiently, and for whom (that is, 'distribution'). The word 'economics' is from the Greek words [oikos], meaning house, and [nomos], meaning custom or law, hence "rules of the house(hold)". Discussions about production and distribution date back to ancient laws and to philosophers, such as Plato. However, economics in its modern sense is conventionally dated from the publication of Adam Smith's “The Wealth of Nations” in 1776. Moreover 'economics' displaced the earlier term of 'political economy' with the rise of neoclassical economics after 1870. Furthermore, a definition that captures 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. Consequently economics involves the study of choice, as affected by incentives and resources. Its methods have been applied to seemingly distant fields of study that involve people with faced with alternatives that require choice, including education, the family, politics, health, law, crime, religion, and war.