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Economics is "the social science that studies the production, distribution, and consumption of goods and services." Economics focuses on the behavior and interactions of economic agents and how economies work. Microeconomics is a field that analyzes what's viewed as basic elements in the economy, including individual agents and markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labor, capital, and land, currency inflation, economic growth, and public policies that have an impact on these elements. Other broad distinctions within economics include those between positive economics, describing "what is", and normative economics, advocating "what ought to be"; between economic theory and applied economics; between rational and behavioral economics; and between mainstream economics and heterodox economics. Economic analysis can be applied throughout society, including real estate, business, finance, health care, engineering, and government. It is also applied to such diverse subjects as crime, education, the family, feminism, law, philosophy, politics, religion, social institutions, war, science, and the environment. Definitions of economics over time The earlier term for the discipline was 'political economy'.Since the late 19th century, it has commonly been called 'economics'. cited to the Ancient Greek οἰκονομικός, "practiced in the management of a household or family" and therefore "frugal, thrifty", which in turn comes from wikt:οἰκονομία "household management" which in turn comes from perhaps the most commonly accepted current definition of the subject": There are other criticisms as well, such as in scarcity not accounting for the macroeconomics of high unemployment. Gary Becker, a contributor to the expansion of economics into new areas, describes the approach he favors as "combined assumptions of maximizing behavior, stable preferences, and market equilibrium, used relentlessly and unflinchingly." One commentary characterizes the remark as making economics an approach rather than a subject matter but with great specificity as to the "choice process and the type of social interaction that analysis involves." The same source reviews a range of definitions included in principles of economics textbooks and concludes that the lack of agreement need not affect the subject matter that the texts treat. Among economists more generally, it argues that a particular definition presented may reflect the direction toward which the author believes economics is evolving or should evolve. History of economic thought From antiquity through the physiocrats "Economic" writings date from earlier Mesopotamian, Greek, Roman, Indian subcontinent, Chinese, Persian, and Arab civilizations. Questions regarding the distribution of resources are found throughout the writings of the Boeotian poet Hesiod and several economic historians have described Hesiod himself as the "first economist". However, the word Oikos, the greek word from which the word economy derives, was used for issues regarding how to manage a household, rather than to refer to some normative societal system of distribution of resources, which is a much more recent phenomenon. Other notable writers from Antiquity through to the Renaissance include Aristotle, Xenophon, Chanakya, Qin Shi Huang, Ibn Khaldun, and Thomas Aquinas. Joseph Schumpeter described 16th and 17th-century scholastic writers, including Tomás de Mercado, Luis de Molina, and Juan de Lugo, as "coming nearer than any other group to being the 'founders' of scientific economics" as to monetary, interest, and value theory within a natural-law perspective. Two groups, who later were called "mercantilists" and "physiocrats", more directly influenced the subsequent development of the subject. Both groups were associated with the rise of economic nationalism and modern capitalism in Europe. Mercantilism was an economic doctrine that flourished from the 16th to 18th century in prolific pamphlet literature, whether of merchants or statesmen. It held that a nation's wealth depended on its accumulation of gold and silver. Nations without access to mines could obtain gold and silver from trade only by selling goods abroad and restricting imports other than gold and silver. The doctrine called for importing cheap raw materials to be used in manufacturing goods, which could be exported, and for the state, regulation to impose protective tariffs on foreign manufactured goods and prohibit manufacturing in the colonies. Physiocrats, a group of 18th-century French thinkers and writers, developed the idea of the economy as a circular flow of income and output. Physiocrats believed that only agricultural production generated a clear surplus over cost so agriculture was the basis of all wealth. Thus, they opposed the mercantilist policy of promoting manufacturing and trade at the expense of agriculture, including import tariffs. Physiocrats advocated replacing administratively costly tax collections with a single tax on the income of landowners. In reaction against copious mercantilist trade regulations, the physiocrats advocated a policy of laissez-faire, which called for minimal government intervention in the economy. Adam Smith was an early economic theorist. Smith was harshly critical of the mercantilists but described the physiocratic system "with all its imperfections" as "perhaps the purest approximation to the truth that has yet been published" on the subject. Classical political economy The publication of Adam Smith's The Wealth of Nations in 1776, has been described as "the effective birth of economics as a separate discipline." The book identified land, labor, and capital as the three factors of production and the major contributors to a nation's wealth, as distinct from the physiocratic idea that only agriculture was productive. Smith discusses the potential benefits of specialization by division of labor, including increased labor productivity and gains from trade, whether between town and country or across countries. His "theorem" that "the division of labor is limited by the extent of the market" has been described as the "core of a theory of the functions of firm and industry" and a "fundamental principle of economic organization." To Smith has also been ascribed "the most important substantive proposition in all of economics" and foundation of resource-allocation theory – that, under competition, resource owners seek their most profitable uses, resulting in an equal rate of return for all uses in equilibrium.