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ByBritannica Publication

As a social science that studies how a society’s resources are shared, economics (a) describes and analyzes choices about the way goods and services are produced, distributed, and consumed, and (b) assesses the consequences of those choices. The word “economics” comes from the Greek oikos, meaning “household,” and nomos, meaning “rule,” or “governance.” Thus “household management”—the performance of the tasks and services that allow a family to survive and prosper—refers to those economic activities devoted to satisfying the primary needs of food, clothing, and shelter. Such needs are common to all human be-ings. Economic functions also satisfy desires for goods and services that are not essential needs but that people choose to buy. Such goods and services are often called luxuries, but most goods are more accurately considered neither luxuries nor necessities. Additionally goods, such as automobiles, mobile phones, and visits to the dentist, that might be seen as luxuries in one country may be considered necessities in another.By studying the means through which goods and services are pro-vided, economists come to understand more about entire economies. There have been economies since the dawn of civilization, but econom-ics is a recently developed field of study. It originated as a discipline during the 18th century when Scottish moral philosopher Adam Smith published his classic study An Inquiry into the Nature and Causes of the Wealth of Nations (1776).An economy is the wealth-producing segment of society. Wealth is defined as the total sum of all possessions (including financial assets) minus total liabilities. Where it is possible to attach a value to every pos-session, wealth can be measured in terms of money. Although money is best understood as a means of exchange, it may be called the economic equivalent of wealth. Economies exist because human beings have needs and desires. These are satisfied by the production of goods—all of which express a society’s wealth.


Publication Date
Jul 11, 2021
Business & Economics
All Rights Reserved - Standard Copyright License
By (author): Britannica Publication



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