(Meeran Salik, Karachi )
In primitive society, the connection between wants efforts and satisfaction is close and direct. But in a modern Society things are not so simple and straight. Here man produces what he does not consume and consumes what he does not produce. When he produces more, he has to sell the excess quantity. Similarly he has to buy a product which is not produced by him. Thus the process of buying and selling which is called as Exchange comes in between wants efforts and satisfaction. Nowadays, most of the things we need are made in factories. To make them the worker gives his labour, the land lord his land, the capitalist his capital, while the businessman organizes the work of all these. They all get reward in money. The labourer earns wages, the landlord gets rent the capitalist earns interest, while the entrepreneur’s (Businessman) reward is profit. Economics studies how these income—wages, rent interest and profits-are determined. This process in called “Distribution: This also comes in between efforts and satisfaction. Thus we can say that the subject-matter of Economics is Consumption- the satisfaction of wants. Production- i.e. producing things, making an effort to satisfy our wants Exchange- its mechanism, money, credit, banking etc. Distribution – sharing of all that is produced in the country. In addition, Economics also studies “Public Finance”.