1.1 Definition and Scope

### 날짜 : 2024-03-20 22:49 ### 주제 : Definition and Scope of #economics #공부 ---- ### 1.1 Definition and Scope Economics, as a discipline, exists to understand and explain how individuals, businesses, governments, and societies make choices about ways to allocate limited resources. The overarching aim is to meet the unlimited wants and needs of its members. At its core, economics deals with the principles and mechanisms that govern the production, distribution, and consumption of goods and services. #### Definition Economists define economics in various ways, reflecting the discipline's evolution over time. One of the earliest and most widely quoted definitions comes from the 19th-century Scottish philosopher Adam Smith, often hailed as the father of modern economics. He described economics as the study of how societies use scarce resources to produce valuable commodities and distribute them among different people. Later, Alfred Marshall, a leading 19th-century English neoclassical economist, defined economics as the study of managing scarce resources to fulfill society's needs and improve its well-being. In the 20th century, Lionel Robbins, an English economist, offered a more detailed definition that has since been broadly adopted: "Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses."("경제학은 사람들이 원하는 것과 그걸 이루기 위해 사용할 수 있는 제한된 자원 사이의 관계를 연구하는 학문입니다.") This definition highlights the concept of scarcity and the necessity of making choices that have opportunity costs. #### Scope The scope of economics is broad and can be considered under two main branches: microeconomics and macroeconomics. - **Microeconomics** focuses on the actions of individuals and industries, like the dynamics between buyers and sellers, borrowers and lenders. It studies various aspects of economic behavior, detailing the ways in which individuals (or companies) reach decisions about what to sell, what to buy, how much to work, and how much to save. - **Macroeconomics**, on the other hand, deals with the economy as a whole. It studies aggregate indicators such as GDP, unemployment rates, and price indices to understand how the entire economy functions. Macroeconomics addresses issues like the effects of national fiscal and monetary policies on economic growth, inflation, and unemployment. Both branches are essential for analyzing economic policies and principles. Besides these, the field of economics encompasses various other specialized areas such as labor economics, financial economics, and environmental economics, each focusing on specific markets or issues. Economics also intersects with other disciplines, showing its broad scope. For instance, behavioral economics combines economic principles with psychological insights to understand how people make economic decisions. Environmental economics studies economic aspects of environmental issues, while development economics focuses on economic aspects of the development process in low-income countries. In summary, the scope of economics is wide, encompassing the study of how societies use limited resources to fulfill unlimited wants and needs. Its application and relevance extend to nearly every aspect of daily life and societal organization, influencing policies and decisions that shape economic opportunities, wealth distribution, and the overall quality of life.