Economics is a social science that focuses on the production, distribution, and consumption of goods and services. The study of economics is primarily concerned with analyzing the choices that individuals, businesses, governments, and nations make to allocate limited resources. Economics has ramifications on a wide range of other fields, including politics, psychology, business, and law.
Economists often talk about people’s needs and wants. A need is a basic requirement for survival, such as food, clothing, and shelter. A want is simply something we would like to have but is not necessary for survival. Food, for example, is needed for survival. Because many foods will satisfy the need for nourishment, the range of things represented by the term want is much broader than that represented by the term need. Other examples of wants can include luxury items, gadgets, designer clothes, and cars. They can enhance the quality of life.
People cannot satisfy all their wants and needs because productive resources are scarce. The factors of production, or resources required to produce the things we would like to have, are land, capital, labor, and entrepreneurs. All four are required to produce goods and services.
