NATURE OF ECONOMICS

ECONOMICS

a social science that deals with the efficient allocation of scarce resources in order to satisfy the unlimited needs and wants of men

ADAM SMITH

Wealth Economics Definition

WEALTH ECONOMICS DEFINITION

Economics is the study of the nature and causes of nations’ wealth or simply as the study of wealth

ALFRED MARSHALL

Welfare Definition of Economics

WELFARE DEFINITION OF ECONOMICS

Economics is the study of mankind in the ordinary business of life. It enquires how he gets his income and how he uses it. In one view, it is a study of wealth and on other hand it is part of study of man.

LIONEL CHARLES ROBBINS

Scarcity Definition of Economics (1932)

SCARCE DEFINITION OF ECONOMICS (1932)

Economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses

PAUL SAMUELSON

Growth Definition of Economics

GROWTH DEFINITION OF ECONOMICS

Economics is the study of how man and society choose with or without the use of money to employ the scarce productive resources

MICROECONOMICS

deals with the economic problems of a single industry or organization

MACROECONOMICS

deals with the problems of an economy as a whole

MICROECONOMIC DEFINITION — HENDERSON AND QUANT

Microeconomics is the study of economic actions of individuals and well-defined groups of individuals

MICROECONOMIC DEFINITION — GARDNER ACKLEY

Microeconomics deals with the division of the total output among industries, products and firms and the allocation of the resources among competitive use.

MICROECONOMIC DEFINITION — PROF. BOULDING

Microeconomics is the study of a particular firm, a particular household, individual price, wages, income, industry and particular commodity

CONSUMERS HAVE RATIONAL PREFERENCES

This assumption states that consumers act in a rational manner and focus on satisfying their needs. It is also assumed that the tastes of consumers remain constant for a long period.

EXISTENCE OF A PERFECT COMPETITION

According to this assumption, there is perfect competition in an economy, wherein there are numerous buyers and sellers. It is assumed that homogenous products exist in the market and both buyers and sellers cannot affect prices

EXISTENCE OF EQUILIBRIUM

As per this assumption, equilibrium exists wherein both consumers and entrepreneurs achieve maximum satisfaction.

INDUSTRY EQUILIBRIUM

at equilibrium if profits achieved are normal

FIRM EQUILIBRIUM

at the state of equilibrium if its profits are maximum

ECONOMICS AS A SCIENCE

• It is a study of the relationship between cause and effect.

• It is capable of measurable and based on facts.

• It has its own methodological apparatus.

• It should have the ability to forecast

ECONOMICS AS A SCIENCE — POSITIVE ECONOMICS

based on cause-and-effect relationship between variables but it does not pass value judgment. In other words, it states “what is”. They state what the reality is.

ECONOMICS AS A SCIENCE — NORMATIVE ECONOMICS

economics involves value judgments. It is prescriptive in nature and describes “what ought to be” or “what should be the things”. It is concerned with welfare propositions.

ECONOMICS AS AN ART

a branch of study that deals with expressing or applying the creative skills and imagination of humans to perform a certain activity.

ECONOMICS AS A SOCIAL SCIENCE

deals with studying the behavior of human beings and their relationships in society. This is because of the exchange of goods takes place within the society and among different societies to satisfy the needs and wants of people.