What is the best definition of economics so that I can get full two marks for it?Its for me in the exam.

Expert Answers
pohnpei397 eNotes educator| Certified Educator

To me, the best way to define economics is to say that it is the study of how people, firms, and whole economies deal with the fact of scarcity.

The central idea of economics is scarcity -- this is the idea that resources in the world are limited while the desires of human beings are unlimited.  This fact forces people to make choices about how to use those resources.  Economics is the study of how this is done.

You might further define economics by splitting it up into micro and macro economics.  Micro looks at individual firms or industries (or individual people) while macro looks at whole economies.

I cannot guarantee that this is what your teacher wants, but I have taught this subject at the college level and would have given full marks to this answer.

krishna-agrawala | Student

I am not sure if there is a definition of economics that is accepted as the best definition. There are some minor differences in the definition given by the best economists. I am giving below a definition by Paul Samuelson who has received the Nobel Price for Economics in 1970.

The study of how societies use scarce resources to produce valuable commodities and distribute them among different people.

Economics is divides in two branches of economics - microeconomics and macro economics.

Microeconomics is the branch of economics that that is concerned with the behavior of individual entities such as markets, firms and households.

Macroeconomics in concerned with the overall performance of the economy.

Source:

Samuelson, P.A. and Nordhaus W.D. 2005, Economics Eighteenth Edition, Tata McGraw-Hill, New Delhi.

wgbonga | Student

Economics is the study of how scarce resources are allocated so as to meet unlimited human wants. There is normative and positive economics to be differentiated in the definition.