Introduction to Economy

The term “economy” comes from the Greek :

• Oicos: which means house.
• Nomos: which means to administer, law or rule.
  In this blog we will talk about the introduction to economics.

Introduction to The science of Economy

Etymologically, economics is the art of managing a house.
Economics is also the art of managing a business. And by extension, economics is the art of managing a country.
More generally, economics is a social science that studies the production, distribution, and consumption of wealth in a society.

Economics has several definitions. Here we will use the simplest one: economics is a social science whose purpose is to study how society employs scarce resources for production in response to the needs and wants of individuals and how it redistributes the results of that production.

The keywords in this definition are

• The use of scarce resources
• Production
• Need
• Redistribution
  Remember these words well because we will explain it in depth later. We can define economics with these key words as: the science of managing scarce resources.

There are two different scales of analysis in Economics:

• Microeconomics:
  Microeconomics is the branch of economics that models the behavior of economic agents and their interactions, especially in markets. It is the part of economic analysis that studies the functioning of a market economic system starting from individual behaviors. So microeconomics is interested in the individual behavior of economic agents who are consumers, households, companies, …
• Macroeconomics:
  Macroeconomics is the theoretical approach that studies the economy through the existing relationships between the major economic aggregates: income, investment, consumption, unemployment rate, inflation, …
  It is the part of economic analysis that studies the functioning of the economy by apprehending it, from the outset, in its entirety.
  Macroeconomics, therefore, allows us to explain the overall functioning of an economic system in the short and long term.

There is a third scale called meso-economics, or mesoeconomics, which is the branch of economics whose domain is intermediate between that of macroeconomics and that of microeconomics. Thus, it refers to the part of economic analysis intermediate between micro and macroeconomics.