Alfred Mrshall's definition : Economics is a study of mankind and the ordinary business of life. Because economic problems have certain common features, one may arrive at more penetrating definition. The problems of economics arise out of the use of scarce resources to satisfy unlimited human wants. Scarcity is inevitable and is central to economic problems.
A society's resources consist of the free gifts of nature, such as land, forest, and mineral, human resources, both mental and physical, and all sorts of man-made aids to further production, such as tools, machinery and buildings. Economicsts call such resources factors of production because they are used to produce those things that people desire. The things produced are called commodities. Commodities may be divided into goods and services.
Goods and services are the means by which people seek to satisfy some of their wants. The act of making goods and services is called production, and the act of using them satisfy want is called consumption. For most people in most societies good are not regarded and desirable in themselves, few people want to pile them up endlessly in warehouse, never to be consumed. They are value because people want the services they provide. An automobile, for example, helps to satisfy its owner's desires for transportation, mobility, and possibly status.
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