HomeHence, its definition varies as the nature and scope of the subject grow over time. But, the formal and commonly accepted definition is as follow. Economics is a social science which studies about efficient allocation of scarce resources so as to attain the maximum fulfillment of unlimited human needs. As economics is a science of choice, it studies how people choose to use scarce or limited productive resources (land, labour, equipment, technical knowledge and the like) to produce various commodities. The following statements are derived from the above definition.      Economics studies about scarce resources; It studies about allocation of resources; Allocation should be efficient; Human needs are unlimited The aim (objective) of economics is to study how to satisfy the unlimited human needs up to the maximum possible degree by allocating the resources efficiently. 1.2 The rationales of economics There are two fundamental facts that provide the foundation for the field of economics. 1) Human (society‘s) material wants are unlimited. 2) Economic resources are limited (scarce). The basic economic problem is about scarcity and choice since there are only limited amount of resources available to produce the unlimited amount of goods and services we desire. Thus, economics is the study of how human beings make choices to use scarce resources as they seek to satisfy their unlimited wants. Therefore, choice is at the heart of all decision-making. As an individual, family, and nation, we confront difficult choices about how to use limited resources to meet our needs and wants. Economists study how these choices are made in various settings; evaluate the outcomes in terms of criteria such as efficiency, equity, and stability; and search for alternative forms of economic organization that might produce higher living standards or a more desirable distribution of material well-being. 1.3 Scope and method of analysis in economics 1.3.1 Scopeofeconomics The field and scope of economics is expanding rapidly and has come to include a vast range of topics and issues. In the recent past, many new branches of the subject have developed, including development economics, industrial economics, transport economics, welfare economics, environmental economics, and so on. However, the core of modern economics is

Hence, its definition varies as the nature and scope of the subject grow over time. But, the formal and commonly accepted definition is as follow. Economics is a social science which studies about efficient allocation of scarce resources so as to attain the maximum fulfillment of unlimited human needs. As economics is a science of choice, it studies how people choose to use scarce or limited productive resources (land, labour, equipment, technical knowledge and the like) to produce various commodities. The following statements are derived from the above definition.      Economics studies about scarce resources; It studies about allocation of resources; Allocation should be efficient; Human needs are unlimited The aim (objective) of economics is to study how to satisfy the unlimited human needs up to the maximum possible degree by allocating the resources efficiently. 1.2 The rationales of economics There are two fundamental facts that provide the foundation for the field of economics. 1) Human (society‘s) material wants are unlimited. 2) Economic resources are limited (scarce). The basic economic problem is about scarcity and choice since there are only limited amount of resources available to produce the unlimited amount of goods and services we desire. Thus, economics is the study of how human beings make choices to use scarce resources as they seek to satisfy their unlimited wants. Therefore, choice is at the heart of all decision-making. As an individual, family, and nation, we confront difficult choices about how to use limited resources to meet our needs and wants. Economists study how these choices are made in various settings; evaluate the outcomes in terms of criteria such as efficiency, equity, and stability; and search for alternative forms of economic organization that might produce higher living standards or a more desirable distribution of material well-being. 1.3 Scope and method of analysis in economics 1.3.1 Scopeofeconomics The field and scope of economics is expanding rapidly and has come to include a vast range of topics and issues. In the recent past, many new branches of the subject have developed, including development economics, industrial economics, transport economics, welfare economics, environmental economics, and so on. However, the core of modern economics is