Question

What is Economics?

Hint:

The three basic questions every economy must answer are: What to produce? How to produce? and For whom to produce?

Answer 1

Step 1: Understanding the Concept:
The word 'Economics' originates from the Greek words 'Oikos' (house) and 'Nomos' (management), meaning household management.
It is fundamentally the study of choices under the constraint of scarcity.
Step 2: Detailed Explanation:
The core problem in economics is the "Scarcity Problem" because resources are limited but human desires are infinite.
It is divided into two main branches:
1. Microeconomics: Deals with individual units like a consumer or a firm.
2. Macroeconomics: Deals with the economy as a whole, focusing on aggregates like national income.
Step 3: Final Answer:
Economics is the study of how people make choices to use limited resources with alternative uses to achieve maximum satisfaction.