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Economics Definitions.ppt

This document provides an overview of economics, including definitions of economics from prominent economists like Adam Smith, Alfred Marshall, Lionel Robbins, and Paul Samuelson. It discusses their definitions of wealth, welfare, scarcity, and growth and the key features and criticisms of each. The document also covers the introduction, scope, and divisions of economics as well as comments on the nature of economics from economists like Paul Samuelson.

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ECONOMICS Dr. A. SATHEESH BABU Assistant Professor, Department of Economics VIVEKANANDA COLLEGE (Residential & Autonomous –A Gurukula Institute of Life Training) TIRUVEDAKAM WEST, MADURAI DIST– 625 234, TAMIL NADU
ECONOMICS • Introduction • Political Science – Political Economy • Adam Smith –Father of Economics • An inquiry into the Nature and Causes of Wealth of Nations - 1776 • The word “Economics” was derived from the Greek word Oikonomia which means Household Management . • The word “Oikonomia” divided into two words “Oikos - Household” and “nemein - Management”.
ECONOMICS • Meaning • At present Economics is a social science that deals with human wants and their satisfaction. • In other words, Economics is a social science that studies about production, distribution and consumption of goods and services. • Generally, Economics is a social science which studies the human behaviour inrelation with consumption, production, distribution and exchange in their day to day life.
Scope of Economics • Subject Matter of Economics • Divisions of Economics
Subject Matter of Economics 1. Wants 2. Efforts 3. Satisfaction If one want is satisfied another want will arise automatically. Wants Efforts Satisfaction
Divisions of Economics 1. Consumption: Consumption means destroying of utility. Consumption is the branch of economics that deals with the satisfaction of human wants. 2. Production: Production means creation of utility or wealth. Under production, we study about the laws which govern the factors of production. 3. Distribution: Distribution means sending of goods from one place to another etc. Distribution studies about how the wealth produced by the four factors of production are distributed among these factors as rent, wages, interest and profit.
Divisions of Economics 4. Exchange: Exchange means replace or substitute of one good to another good or one good by money etc. 5. Public Finance: Public Finance deals with the income and expenditure of public authorities like Central, State and Local Governments with the adjustment of one to another.
ECONOMICS • Definitions • Wealth Definition – Adam Smith • Welfare Definition – Alfred Marshall • Scarcity Definition – Lionel Robbins • Growth Definition – Paul Samuelson
Wealth Definition Adam Smith defines Economics as the Science of Wealth. According to Smith, Economics was regarded as the Science which studies about production and consumption of wealth. An Inquiry into Nature and Causes of Wealth of Nations - 1776
Wealth Definition Adam Smith defines Economics as the Science of Wealth. According to Smith, Economics was regarded as the Science which studies about production and consumption of wealth. An Inquiry into Nature and Causes of Wealth of Nations - 1776
Features of Wealth Definition 1. Study of Wealth 2. Material Goods only 3. Wealth Changes 4. Maximization of Own Wealth of an Economic Man
Opinions of Wealth Definition Thomas Carlye, Charles Dickens, William Morris and Mathew Arnold • Bread and Butter Science • The Gospel of Mammon • A science which taught selfishness • A Dark and Dismal Science • A Bastard Science • A Pig Science
Criticism of Wealth Definition 1. To much Emphasis on Wealth 2. Restricted Meaning of Wealth 3. Concept of Economic Man 4. No Mention of Man’s Welfare 5. Economic Problem 6. Defective Logic
Welfare Definition Alfred Marshall defines Economics thus: “Political Economy” or Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well-being. Principles of Economics - 1890
Features of Welfare Definition 1. A Study of Mankind 2. A Study of Social Actions 3. Study of Material Welfare 4. A Normative Science
Criticism of Welfare Definition 1. Excludes Non-Material 2. Contradictory Definition 3. Classificatory Definition 4. Welfare is Immeasurable 5. Welfare involves Value Judgment
Scarcity Definition Lionel Robbins defines Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses. An Essay on the Nature and Significance of Economic Science - 1932
Implications of Scarcity Definition 1. Human Wants are Unlimited 2. Scarcity of Means 3. Alternative Uses of Scarce Means 4. Choice Making
Features of Scarcity Definition 1. Leading to Choice 2. Analytical and Scientific 3. It is Universal in Application 4. Widening of Scope of Economics 5. A Positive Study 6. Opportunity Cost 7. The Concept of Scale of Preferences
Criticism of Scarcity Definition 1. Too Narrow and Too Wide 2. Old Wine in a New Bottle 3. It offers only Light but not Fruit 4. It ignores Economic Growth 5. Economics of Abundance 6. Not Applicable to Underdeveloped Countries 7. No Human Touch (No Rationality)
Growth Definition Paul Samuelson defines Economics as the study of how men and society choose, with or without the use of money, to employ scarce productive resources which could have alternative uses, to produce various commodities over time, and distribute them for consumption, now and in the future among various people and groups of society. An Introductory Analysis - 1948
Remarks on Economics Economics is the Oldest of the Arts, the Newest of the Sciences, indeed the Queen of the Social Sciences. - Paul Samuelson
Features of Growth Definition 1. Acceptance of Alternative uses 2. Incorporation of Time Element 3. Emphasizes the Distribution and Consumption 4. Applicable in Barter System 5. Universal Application