📐Module 2 · Level 1
What is Economics?
Economics is the study of how societies allocate scarce resources to satisfy unlimited wants.
The Science of Choice
At its core, economics is about choices. You have limited money, time, and energy — but unlimited desires. How do you allocate your resources? This question, scaled up to millions of people, is what economics studies.
Micro vs. Macro
Microeconomics studies individual actors — consumers, firms, and markets. Why does a cup of coffee cost ₹200? Macroeconomics studies the big picture — national output, unemployment, inflation. Why is India's GDP growing at 6.5%?
- •Scarcity forces trade-offs — every choice has an opportunity cost
- •Microeconomics = individual decisions; Macroeconomics = national/global patterns
- •Positive economics describes what IS; normative economics says what SHOULD be
- •Economics uses models to simplify reality and make predictions
💡 Did You Know?
The word 'economics' comes from the Greek 'oikonomia' meaning 'household management.' Managing a household and managing a nation follow surprisingly similar principles.