Question

Which of the following is the best definition for "economics?"

Answer 1

The correct answer is:

a. Economics is the social science that tries to explain the choices people make concerning the limited resources that meet their needs and wants.

Note that people also include the government - since governments are made up of people. 

Now, the reason why the other options are wrong:


b. Economics is the social science that tries to explain the reasons why the currencies of various countries are so numerous.
The currencies are an instrument, but not a necessary one. For example, the traditional economies don't use currencies at all!

c. Economics is the social science that tries to explain only the choices the government makes concerning supply and demand in the markets.

Reason why it's wrong: It examines the choice of both private and official choices !

d. Economics is the social science that tries to explain the spiritual choices people make concerning how to share limited resources.
- this is false as spirituality barely matters in economics except as a factor influencing people's choices!