The true definition of the term economics has varied over time, and this has been as a result of the dynamic change of scholar views over time. As common with many other studies, economics also does not have a standard definition but different scholars do give a similar definition. Schenk (1997) states that “Economics is the social science that examines how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants,” (P 1). It can be established from the above definition that economics is both a science and an art.
It is a science in that it follows principles and theories that can be proved through scientific methods. It is also an art in that human behavior, which cannot be measured objectively, is at play. There are also basic tenets that are usually associated with the study of economics and the most profound is the concept of scarcity which later tags along other laws such as the demand and supply laws. “Scarcity is an imbalance between what is wanted and the amount that is freely available,” (Wagley, 2009, para 1).
Therefore, the concept of efficient use of resources is brought along. Economics is divided into broad categories; Macroeconomics and Microeconomics. The main differences between the two are the circumstances in which they apply. Microeconomics is the study of the behaviors of households and includes elements such as consumption, savings etc. while macroeconomics deals with the broader national issues such as unemployment, inflation, government expenditure etc (Guy, 2010). Economics as a study is very essential in several ways as analyzed below.
Economics provides one with the basic knowledge of understanding impacts and scenarios that relate household, firms, national and world economies. It actually enables one to understand the decisions being made and even predict future behaviors of these entities. Economists therefore enhance better decision making given the limited or scarce resources available (Sloman, Smith & Taylor, 2010). References Guy, E. (2010). Microeconomics and Macroeconomics. Retrieved on 17th August 17, 2010 from http://www. etftopics. com/microeconomics-and-macroeconomics/ Schenk, R. (1997).
History of economic thought. P1. Retrieved on 17th August 17, 2010 from http://ingrimayne. com/econ/Introduction/Defintns. html Sloman, J. Smith, P & Taylor, R. (2010). About Economics. Why study economics? Retrieved on 17th August 17, 2010 from http://whystudyeconomics. ac. uk/faq/economics. htm Wagley, K. (2009). The Impact of Scarcity and Choice on Supply and Demand. Retrieved on 17th August 17, 2010 from http://www. associatedcontent. com/article/2236585/the_impact_of_scarcity_and_choic _on. html