Introduction

Economics is the science that deals with production, exchange, and consumption of various commodities in economic systems. It shows how scarce resources can be used to increase wealth and human welfare. The central focus of economics is on the scarcity of resources and choices among their alternative uses. The resources or inputs available to produce goods are limited or scarce. This scarcity induces people to make choices among alternatives, and the knowledge of economics is used to compare the alternatives for choosing the best among them. For example, a farmer can grow paddy, sugarcane, banana, cotton, etc. in his garden land. But he has to choose a crop depending upon the availability of irrigation water.

Two major factors are responsible for the emergence of economic problems. They are:-

• The existence of unlimited human wants
• The scarcity of available resources.

The numerous human wants are to be satisfied through the scarce resources available in nature. Economics deals with how numerous human wants are to be satisfied with limited resources. Thus, the science of economics centers on want – effort – satisfaction.

Economics not only covers the decision-making behavior of individuals, but also the macro variables of economies like national income, public finance, international trade and so on.