Economics belongs to the branch of knowledge known as the "Social Sciences." The social sciences deal with both intergenerational and intra-generational interactions between human beings in a society.

Human activities can, of course, be studied from many different perspectives. We could look at humans as political, psychological, historical, or economic beings. A political scientist, for example, would analyze the political activities of the people while an economist would examine activities related to their livelihood. Human beings, in order to fulfil their innate desire for food and shelter, engage in activities that lead them to the production of goods such as food, clothing, and housing, as well as services. These acts of production and consumption to satisfy human wants form the very basis of the subject matter of Economics. Perhaps observing people engaged in this pursuit, Alfred Marshall defined economics as "a study of mankind in the ordinary business of life."

Since the ordinary business of life involves the use of limited natural and human-made resources (capital), people have always been interested in making the best possible use of these resources. This efficient use of resources has been the underlying theme in economics. Hence, the most succinct definition of economics would be that economics deals with the efficient utilization of scarce resources to satisfy human wants. Scarcity gives legitimacy to economics. If there is no scarcity, there is no economic problem.

The discipline of Economics is built upon two strands of theory: Microeconomic Theory and Macroeconomic Theory. Microeconomic deals with the study of individual units in an economy, such as consumers, producers, and the interaction of these units in a given market structure. Macroeconomic theory, on the other hand, deals with the economy as a whole. Here we analyze the problems related to unemployment, growth, inflation, and the balance of payments.

Most of the other courses in Economics are applied courses which use the concepts of Microeconomic Theory and/ or Macroeconomic Theory. An understanding of the relationship between these two theory courses and other fields in economics is usually helpful in planning your selection of courses.

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For example, an understanding of Microeconomic concepts would be very helpful if you plan to take courses in the fields of:
Labour Economics
Agricultural Economics
Environmental and Natural Resource Economics
Industrial Economics.

You will have to familiarize yourself with Macroeconomic concepts if you intend to take Monetary Economics or Money and Banking.

You will require both Microeconomic and Macroeconomic concepts if you are considering International Economics or Economic Development.

Why should you take Economics?

As mentioned above, economics is concerned with many of the most basic decisions we make as producers, consumers, and members of the society. The decisions made by different segments of a society, such as governments, corporations, and consumers, are based on a given economic environment and have an impact on people's lives. The present pandemonium in the world is a result of the changing technological as well as social conditions which, in large part, are caused by changing economic conditions. Thus, if you want to make any sense as to what is happening and why, you have to understand the underlying economic forces that are causing these changes.

Because of the multiplicity of forces that affect economic decisions taken by different units of the economy, it is difficult to predict the outcome of these changes. Nevertheless, by taking courses in economics you may not be able to solve the puzzle of economic chaos but you would at least be able to understand these forces and their impact on peoples' lives. For example, you would gain an understanding as to why the Bank of Canada increases or decreases interest rates in response to the depreciating or appreciating value of the dollar on the international market, or why governments are preoccupied with deficit reduction. As Elbert V. Bowden in Economics Through the Looking Glass puts it:

It isn't that understanding the economic forces of change will let you see with any certainty where the world is going. It won't. But at least it will help you to understand that you are caught up in a world of explosive change. You will be able to understand a little better what's happening to all of us, and how, and why, and perhaps you'll gain some insight into where it all might be going.

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