Definition of Economics — Flashcards

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The term Economics is derived from the Greek words Oiks, meaning household, and Nemein, meaning management. So, Economics originally meant the management of a household with limited resources.

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Aristotle is regarded by some writers as the first economist. He used the term in the sense of managing the household and the state, which gives an early idea of economic thought.

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Kautilya used the term Economics for both economic and political activities. This shows that economic ideas were linked with statecraft and administration in early Indian thought.

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Economic activities are activities carried out in exchange for money. Their main purpose is to satisfy human wants, and they are measurable in money terms. Examples include working in an office, facto…

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The four main types of economic activities are production, consumption, distribution, and exchange. Production adds utility and value, consumption uses goods and services to satisfy wants, distributio…

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Production is the economic activity concerned with adding utility and value to goods and services. A simple example is making biscuits from sugar, flour, and labour.

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Consumption is the economic activity related to using goods and services directly for the satisfaction of wants. Eating food to satisfy hunger is a clear example.

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Distribution means sharing the produced wealth among individuals or factors of production. It answers the question of who should get more and who should get less.