What are mankind/real life activities that are studied in Economics?
Mankinds activities studied in Economics include:
- Production
- Distribution or exchange and
- Consumption of goods and services.
Production which is studied in Economics takes the form of transformation of raw material’s into finished goods and the distribution and provision of goods and services in order to satisfy human wants. It can equally be said that production is the creation of utility, while utility is the ability of any commodity or service to ——- want. As defined above, production also involves rendering of services which satisfy human wants.
In Economics, production is said to be complete when the goods and services produced reach the final users or consumers.
Economics therefore, studies the chain or channel of distribution of goods and services which starts from the producer – wholesaler – retailer – consumer. The wholesalers and retailers who are in-between the producers and consumers are known in Economics as middlemen.
Since the essence of production is to satisfy human wants, goods and services produced must be consumed in order to satisfy such human wants.
Consumption therefore, is the use of goods and services for the direct satisfaction of human wants. Since goods and services produced are of two types – consumer and capital goods and services; consumer goods are used to satisfy consumers immediate wants while the capital or producers ones are used for further production of goods and services.
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