History Of Engineering Economics

History Of Engineering Economics

The word 'Economics' is derived from a Greek word 'okionomia'. It management of house affairs' i.e., how people earn income (or avail means ' resources) and how they spend them on family members' necessities, comforts and luxuries.

History Of Engineering Economics

Many decisions have to be taken for allocation of income for the necessities, comforts or luxuries of family members such as which bike is to be purchased for elder son, in which college younger son has to be admitted etc. & many more. 

In short, the household must allocate its scarce resources among family members, considering necessities, comforts or luxuries of each one. Always it is not possible to satisfy the demand of each family member.

Similar to household affairs management, many facets has to be managed for society. For example, who will do which kind of job, who will grow food, who will make clothing's, who will treat the patients etc. 

Once the role of members have been decided, it is necessary to provide resource to them and also it is more important to provide their output whom so ever it is required. Similar to the household, in the society everyone can't get what he/she aspire since resources are scares and from the available resources each of the society member has to be satisfied.

With the passage of time, the word 'okionomia' was used for an economy as whole in the sense that how a nation takes steps to fulfill its desires and preferences with the help of scarce means and it was termed as Political Economics'. 

In generalization, the term 'Economics' can be summarised as follows:

"Economics is a study of the ways in which people use resources to satisfy their wants."