Economics

Economics studies how society manages its scarce resources and allocates them to different alternative uses, how it organizes its production system, and how it distributes the wealth that is generated.

Oikonomos

The word "economics" comes from the Greek "Oikonomos," meaning "one who manages a household." Indeed, the management decisions of a household and an economy are quite similar, though it may not seem so at first glance. Both must decide how to distribute various tasks and what each person receives in return.

Within an economy, it is necessary to distribute production tasks, decide who is responsible for food production, who for housing construction, who for energy production, or who provides transportation services, etc. Subsequently, society must decide what each individual receives in exchange.

Scarcity

Scarcity is central to economics because if everyone could have everything they want, they would have it. Unfortunately, we live in a world of scarcity, and both in a household and in an economy, members cannot get everything they want. As a result, society must decide how to use its resources and how to allocate them among different alternatives, thus we can say that scarcity is the mother of economics.