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The essential thing to see in the concept of opportunity cost is found in the name of the concept. Opportunity cost is the value of the best opportunity forgone in a particular choice. It is not simply the amount spent on that choice. The concepts of scarcity, choice, and opportunity cost are at the heart of economics.
- 1.2 The Field of Economics
Microeconomics is the branch of economics that focuses on...
- Chapter 1: Economics: The Study of Choice
Chapter 1: Economics: The Study of Choice Start Up:...
- 10.2 The Monopoly Model
Monopoly and Market Demand. Because a monopoly firm has its...
- 24.1 What Is Money
If cigarettes and mackerel can be used as money, then just...
- 7.1 The Concept of Utility
Mr. Higgins’s total utility rises at a decreasing rate. The...
- 17.1 The Gains From Trade
Figure 17.2 Measuring Opportunity Cost in Roadway. The slope...
- 1.2 The Field of Economics
- Introduction to FRED. Data is very important in economics because it describes and measures the issues and problems that economics seek to understand. A variety of government agencies publish economic and social data.
- The Problem of Scarcity. Think about all the things you consume: food, shelter, clothing, transportation, healthcare, and entertainment. How do you acquire those items?
- The Division of and Specialization of Labor. The formal study of economics began when Adam Smith (1723–1790) published his famous book The Wealth of Nations in 1776.
- Why the Division of Labor Increases Production. When we divide and subdivide the tasks involved with producing a good or service, workers and businesses can produce a greater quantity of output.
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- Historical development of economics
Written byMark Blaug
Mark Blaug
Visiting Professor of Economics, University of Exeter, England. Emeritus Professor of Economics, University of Buckingham, England. Emeritus Professor of the Economics of Education, Institute of Education, University of London. Author of Economic Theory in Retrospect.
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The Editors of Encyclopaedia Britannica
Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They write new content and verify and edit content received from contributors.
No one has ever succeeded in neatly defining the scope of economics. Many have agreed with Alfred Marshall, a leading 19th-century English economist, that economics is “a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment, and with the use of the material requisites of wellbeing”—ignoring the fact that sociologists, psychologists, and anthropologists frequently study exactly the same phenomena. In the 20th century, English economist Lionel Robbins defined economics as “the science which studies human behaviour as a relationship between (given) ends and scarce means which have alternative uses.” In other words, Robbins said that economics is the science of economizing. While his definition captures one of the striking characteristics of the economist’s way of thinking, it is at once too wide (because it would include in economics the game of chess) and too narrow (because it would exclude the study of the national income or the price level). Perhaps the only foolproof definition is that attributed to Canadian-born economist Jacob Viner: economics is what economists do.
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Difficult as it may be to define economics, it is not difficult to indicate the sorts of questions that concern economists. Among other things, they seek to analyze the forces determining prices—not only the prices of goods and services but the prices of the resources used to produce them. This involves the discovery of two key elements: what governs the way in which human labour, machines, and land are combined in production and how buyers and sellers are brought together in a functioning market. Because prices of the various things must be interrelated, economists therefore ask how such a “price system” or “market mechanism” hangs together and what conditions are necessary for its survival.
The effective birth of economics as a separate discipline may be traced to the year 1776, when the Scottish philosopher Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations. There was, of course, economics before Smith: the Greeks made significant contributions, as did the medieval scholastics, and from the 15th to the 18th century an enormous amount of pamphlet literature discussed and developed the implications of economic nationalism (a body of thought now known as mercantilism). It was Smith, however, who wrote the first full-scale treatise on economics and, by his magisterial influence, founded what later generations were to call the “English school of classical political economy,” known today as classical economics.
Adam Smith, paste medallion by James Tassie, 1787; in the Scottish National Portrait Gallery, Edinburgh.
Apr 4, 2024 · Economics is a social science concerned with the production, distribution and consumption of goods and services. It studies how individuals, businesses, governments and nations make choices on ...
Jul 17, 2023 · Economics is the study of how humans make decisions in the face of scarcity. These can be individual decisions, family decisions, business decisions or societal decisions. If you look around carefully, you will see that scarcity is a fact of life. Scarcity means that human wants for goods, services and resources exceed what is available.
Jul 17, 2023 · Economics is a social science that examines how people choose among the alternatives available to them. It is social because it involves people and their behavior. It is a science because it uses, as much as possible, a scientific approach in its investigation of choices.
Economics is the social science that studies how people interact with scarce resources, such as money, goods, services, and natural resources. Economics covers a wide range of topics, such as production, consumption, distribution, trade, development, and policy. Economics can help us understand and address many real-world issues, such as poverty, inequality, unemployment, inflation, growth ...
