This document defines economics and its key concepts. Economics is defined as the study of choice under conditions of scarcity. The major types of scarcity are labor, capital, land, and entrepreneurship. There are differing definitions of economics, including the classical wealth definition proposed by Adam Smith that focuses on material goods, and modern scarcity definition that emphasizes limited resources. Economics can also be divided into microeconomics, which studies individual parts of the economy, and macroeconomics, which looks at aggregate economic indicators and the economy as a whole.

1. Agricultural Economics

2. Definitions of economics
• The word ‘Economics’ originates from the Greek word ‘Oikonomikos’
which can be divided into two parts:
(a) ‘Oikos’, which means ‘Home’, and
(b) ‘Nomos’, which means ‘Management’.
• Thus, Economics means ‘Home Management’. The head of a family
faces the problem of managing the unlimited wants of the family
members within the limited income of the family.
• Economics is defined as the study of choice under conditions of
scarcity

3. Scarcity:
• Situation in which the amount of
something available is
insufficient to satisfy the desire
for it
• The major problem for society is
a scarcity of resources
For example:
Scarcity of Labor: human beings
spend producing goods and services
Scarcity of Capital: Something
that is used to make other things
that we value
Scarcity of land: Physical space on
which production occurs
Scarcity of entrepreneurship:
Ability and willingness to combine
the other resources into a
productive enterprise

5. Definitions of economics contd…
• According to British socialist Barbara Wotton(1897-1988), “ whenever
six economist are gathered together there will be seven opinions.”
• According to Canadian economist Jacob Viner(1892-1970), “
Economics is what economist do.”
• The definition of the economics can be classified into three major
groups
1. Wealth definition of economics (Classical definition)
2. Welfare definition of economics (Neo classical definition)
3. Scarcity definition of economics (Modern definition)

6. Definitions of economics contd…
Wealth definition of economics
• It is also called classical
definition of economics.
• This definition is given by Adam
smith(father of economics).
• According to him economics
deals with wealth alone so it is
called wealth definition of
economics.
• According to Adam smith wealth
is only material goods (tangible
goods).

7. Definitions of economics contd…

8. Different branches of Economics
• Microeconomics
Micro comes from Greek word mikros, meaning “small”
It is the study of behavior of individual households, firms and governments
It focuses on individual parts of an economy, rather than the whole
• Macroeconomics
Study of the economy as a whole
It focuses on big picture and ignores fine details