Answer to Question #193598 in Economics for Mike

Question

Which of the following statements explains what the subject of Economics covers?

[1] It studies how to increase income for households.

[2] It studies how to reduce the total production of the economy.

[3] It studies how people use limited resources to gain the greatest possible satisfaction 

of their unlimited wants. 

[4] It studies how to control the behaviour of households, firms and government.

Answer 1

Economics is a social science that assesses the relationship between the consumption and production of goods and services in an environment of finite resources and infinite wants.

So, the correct answer is [3].