Economics Definition

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the origin of the term 'Economics'?

French

Greek (correct)

Latin

German

Which book by Adam Smith is associated with the early belief that Economics focuses on increasing a nation's material wealth?

Capital

The Wealth of Nations (correct)

Principles of Political Economy

The General Theory of Employment, Interest, and Money

According to Alfred Marshall, what does Economics study?

Political systems

Human evolution

The creation and distribution of wealth

Human behavior in ordinary life (correct)

What aspect of welfare does Bejo claim Economics studies?

Economic welfare Signup and view all the answers

What do the socialist economists focus on in their definition of Economics?

Social laws governing the production and distribution of material means Signup and view all the answers

What are the two types of goods mentioned?

Physical goods and non-material goods Signup and view all the answers

What characterizes an economic good?

It is useful and rare. Signup and view all the answers

What is Microeconomics primarily concerned with?

Individual and business issues Signup and view all the answers

What is the key difference between a free good and an economic good?

A free good is available to satisfy everyone’s needs without payment. Signup and view all the answers

What problem does microeconomics primarily address?

Price determination and quantity Signup and view all the answers

What does production mean in economic terms?

Increasing the satisfaction capacity of a good Signup and view all the answers

What did the term 'Oikous' originally refer to in Greek?

The household Signup and view all the answers

What determines the productive capacity of a country?

The available productive resources Signup and view all the answers

What are techniques of production?

The set of permitted production methods for all goods Signup and view all the answers

What is a static analysis?

An analysis that indirectly refers to the process achieving equilibrium Signup and view all the answers

What distinguishes dynamic analysis from static analysis?

It includes the element of time as a crucial factor. Signup and view all the answers

How does economics relate to political science?

It connects with state policies and funding Signup and view all the answers

What is the primary focus of business administration within the capitalist system?

Maximizing project profits or growth Signup and view all the answers

Which approach does economics use alongside deductive methods?

Inductive methods Signup and view all the answers

Which type of science does economics fall under?

Social science Signup and view all the answers

What is a key function of economics?

Gaining knowledge on production, distribution, and consumption Signup and view all the answers

How does economics relate to psychology?

By studying human origin, evolution, customs, and beliefs Signup and view all the answers

Which of the following fields use logical reasoning similar to economics?

Engineering Signup and view all the answers

In what way does business administration's analysis differ from economics?

It concentrates on efficient project management and profit maximization Signup and view all the answers

From which civilization is the term 'economics' derived?

Greek Signup and view all the answers

Who was the first to introduce the seeds of economic theory?

Aristotle Signup and view all the answers

Which book is considered a significant marker for the beginning of economics as a science?

The Wealth of Nations Signup and view all the answers

Which problem highlights the need to make choices due to limited resources?

Scarcity Signup and view all the answers

What is necessary when faced with the problem of scarcity?

Making effective allocation decisions Signup and view all the answers

Which of the following schools of thought is NOT mentioned as an early economic school?

Keynesians Signup and view all the answers

Study Notes

Definition of Economics

The term "Economics" originates from Greek, derived from two words: "oikous" meaning household and "nomos" meaning management or law.
Economics is the study of household management, which implies the efficient use of limited resources to meet unlimited wants.

Subfields of Economics

Microeconomics: studies individual economic units, such as firms and households, focusing on price determination and the behavior of economic agents.
Macroeconomics: examines the economy as a whole, analyzing issues like economic growth, inflation, and unemployment.

Basic Economic Concepts

Goods: anything that satisfies human wants, classified into material goods (tangible) and intangible services.
Economic goods: scarce goods that require payment, unlike free goods, which are abundant and free.
Production: the creation of utility or value addition to goods and services.
Utility: the ability of a good or service to satisfy human wants.
Factors of production: resources required for production, including labor, capital, and entrepreneurship.

Economic Analysis

Static analysis: a method of economic analysis that examines the equilibrium state of an economy, ignoring time and focusing on the relationships between variables.
Dynamic analysis: a method that considers the effects of time on economic variables, analyzing the economy's dynamic behavior.

Relationship between Economics and Other Sciences

Economics is closely related to politics, as it studies the behavior of governments and institutions in resource allocation and policy-making.
Economics is also connected to business administration, as both fields deal with the management of resources and decision-making.
Additionally, economics is linked to psychology, sociology, and other social sciences, as human behavior and social structures influence economic phenomena.

Development of Economics

The concept of economics evolved from ancient civilizations, with Aristotle being one of the first to lay the foundations of economic theory.
The term "economics" was coined in the 18th century, and the discipline has since developed into a distinct field of study.
Significant contributors to the development of economics include Adam Smith, who published "The Wealth of Nations" in 1776.

The Problem of Scarcity

Scarcity is a fundamental characteristic of economic resources, leading to the necessity of choice and resource allocation.
The problem of scarcity highlights the importance of efficient resource allocation and optimal decision-making.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Learn about the origin and definition of economics, tracing back to Aristotle and the Greek words 'oikos' and 'nomos'. Understand the concept of managing household resources and its evolution.