Department of Statistics School of Applied Sciences Federal Polytechnic Orogun Delta State, Nigeria

Lecture 1

Etimology of Economics

The word “economics” originates from the Greek word “oikonomia” which is a combination of “oiko” meaning “house or household” and “nomos” meaning “law, custom, or management”.
Oikonomia originally implied household management or the management of household. Over the years, society becomes more complex and the scope expanded to include the management of state resources, trade, production and ditsribution. This leads to the modern discipline we now call Economics.

Economics is about the best use of scare resource and the principles that governs it. The study of economics focuses on making the best choices to maximize individual and social well-being. Given the scarcity of resources the following three fundamental questions arises:
- What should be produced?
- How should god and services be produced/provided?
- For whom should goods and services be produced/provided?
Hence, Economics is therefore defined as a social science that examines how people choose among alternatives available to them.
It is social because it involves people and their behaviour.
It is science because it uses, as much as possible, a scientific approach in its investigation of choices.

Individual wants are unlimited, but the resources to fulfill the desires are limited.
The limitation of the resources leads to choosing among alternatives where and how to use the limited resources.
All choice implies one alternative is selected over another. Selecting among alternatives involves three ideas central to economics: scarcity, choice and opportunity cost.

Scarcity: The condition of having to choose among alternatives.
Opprotunity Cost: The value of the best alternative forgone in making any choice.

Microeconomics: The branch of economics that focuses on the choices made by consumers and firms and their impacts on the individual markets.
Macroeconomics: The branch of economics that focuses on the impact of choices on the total or aggregate level of economic activity in the economy (nation).