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economice paragraph
Economics are two different things or term.
ECONOMYEconomy is the system of producƟ on, distribuƟ on and consumpƟ on of goods and services
that a society uses to tackle the problem of scarcity of resources.
ECONOMICSThe word ‘Economics’ in English has been originated from Greek words namely; Oikos
(household)and Nemein (management) which derives a combined meaning ‘management of
household’.
Till 19th Century economics was known as PoliƟ cal Economy. The book named “ An Inquiry
into the nature and causes of the wealth of NaƟ on” 1776 usually abbreviated as the “ The
wealth of NaƟ ons” by Adam smith is considered as first modern work of economics.
It refers to the conditions under which goods are produced in a society and the way the
people are gainfully employed.
Economics is a social science concerned chiefly with the way society choses to employ its
limited resources which have alternative uses to produce goods and services for present and
future consumption.
Focusing on
Confronted with
For achieving the objectives of
The problem of choice or the problem of allocaƟ on of
resources to their alternaƟ ve uses
Satisfaction of
human wants
Efficient
uƟ lisaƟ on of
scarce resources
*System- Framework
*Goods- Tangible (which
we can see, touch and feel)
*Services- Intangible
(which we can only feel)
*Scarcity- Unlimited
wants& limited resources
Economics is a science of Huma
scarce resources to meet their needs
and wants, focusing on the producƟ on, distribuƟ on, and consumpƟ on of goods and services.
MaximisaƟ on of saƟ sfacƟ on for the consumer
MaximisaƟ on of profit for the producer.
MaximisaƟ on of the welfare of the
Economics by Some Economists
Many economists define economics in different ways. The set of definition given by different
economists can broadly be classified into following four categories.
1.) Wealth- Adam Smith, J.B say and other classical writer.
2.) Material Welfare- Alfred Marshall
3.) Scarcity – Lionel Robbins
4.) Growth- Paul. A. Samuelson
Wealth- Adam Smith
Also known as father of economics. According to him economics is a “A science which
studies the nature and causes of wealth of nation.”
It is criticized by Dr. Alfred Marshell as in this definition it only talks about how wealth is
arises & how it is being used and not about mankind in which includes (love patriotism and
all feelings) in the society as wealth defines in narrow term.
Welfare- Alfred Marshell and other Neo Classical Writers
According to him “Economics is a mankind of ordinary business of life, its enquiry how
he gets his income and how he spends it.”
This definition was criticized by Robbins on the following.ground:
Most emportant definition of
the economy
1.) Welfare is a very subjective term. We can’t quantify the welfare concern as it is
psychic in nature.
2.) Concept of welfare change time to time, from place to place and different for person
to person.
3.) We cannot measure it and anything which cannot be measured we can’t consider it as
economics.
4.) It defines economics as a social science rather than a human science.
Scarcity- Lionel Robbins ( Science of Choice Making) of economics given by Robbins.
“Economics is a science which studies human behaviour as relationship between ends
and scare means which have alternative uses.”
This definition criticized by economist as it limits the scope of
Economics. They talk only about reducing the theory of
resource allocation. He ignores other concept of economics like unemployment, growth or
possibilities of growth and development. He focusing only on resource allocation but if the
resources are used efficiently but not used for the development purpose then it is useless.
So, resources should be used efficie