Reading. Read the text and find out what economics is

Read the text and find out what economics is.

The term «economics» originated from the Greek word «oikonomika» which means household management. It became a separate field of study with the publication of Adam Smith’s «The Inquiry into the Nature and Causes of the Wealth of Nations» in 1776 in Scotland. Adam Smith is considered to be the founder of economics because he was the first economist to outline the activity of a free market economy.

By definition, economics is the science that deals with production, distribution and consumption of goods and services. It is the study of how human beings allocate scarce resources to satisfy their unlimited wants. Different societies face with the problem of scarcity, that is why it is important to study the way resources are distributed to meet the needs of the greatest number of people.

But what do resources include? They include the time and talent people have available, land, buildings, equipment and knowledge. By the way, people’s knowledge helps them to combine all the available resources to create useful products and services. Economists emphasize that people use resources to improve their well-being and gain satisfaction from products and services they choose to consume.

There are two major subdivisions of economics: microeconomics and macroeconomics. Microeconomics is the study of how the system affects an enterprise and it considers how individuals make decisions. Macroeconomics is the study of the entire system of economics and it considers aggregate outcomes.

In general, economics is involved in all spheres of people’s activity. It examines how we make choices among alternatives and gives us a logical way of understanding how to make the best use of natural resources, machinery and people’s work efforts.