“Economics is a social science that is concerned with factors that determine production, distribution and consumption of goods and services.” -- Wikipedia
That sounded a little complicated to me so I looked for a simpler definition.
As a social science that studies how a society's resources are shared, economics (a) describes and analyzes choices about the way goods and services are produced, distributed, and consumed, and (b) assesses the consequences of those choices.” -- Encyclopedia Britannica – Kids
That’s the kid’s version? Wow. Maybe it is not so simple after all. Britannica goes further to explain the root of the word:
“The word “economics” comes from the Greek oikos, meaning “household,” and nomos, meaning “rule,” or “governance.”
I find that interesting. The word began as household rule. Governance mean Mom and Dad, so a kid’s definition is probably a waste of time, anyway. Of course, some of us are not kids, so we see economics much bigger than that. The problem is we probably should not do that. If you think about economics of a country and all that entails, it gets too complicated to discuss easily. What we learn at home is that you need to manage your resources in a way that suits the needs of the family.
I hate to do this, but I am going to talk about resources at home. I am going to leave out air, because that is even too basic for me. Resources are money, food, water, labor, shelter, clothing, cars, gas, gasoline, electricity, education, laundry, dry cleaning, etc. These things are so common we do not even think about them, unless we do not have them. By then, it is probably too late to discuss economics.
We grow up with economics. It becomes second nature to us. Other than the family budget, people normally do not spend a lot of time talking about economics. Unless a child arrives, a destitute family member moves in. your car breaks down or you lose your job.
Nothing is static. Things change constantly that affect the resources available to you. Most things are slow and economically aware and economically capable families have some sort of savings they can rely on for emergencies. Many families do not have that luxury today.
A couple of things that are basic to economics. If you want more of something, you make it easier to get. If you want less of something, you make it harder to get. Pretty simple, right?
Next post I will discuss the impact of subsidies and taxes and how they affect households.