This document provides an introduction to economics. It defines economics according to several economists like Adam Smith, Alfred Marshall, Lionel Robbins, and Paul Samuelson. Economics is defined as the study of production, distribution, and consumption of goods and services. The document also discusses the nature and scope of economics, distinguishing between positive and normative economics. Positive economics objectively describes economic circumstances while normative economics makes judgments about economic policies. Finally, it provides an overview of microeconomics, which studies individual decision-making units, and macroeconomics, which analyzes the economy as a whole.

2. Prepared by;
name en.number
 Taxak mistry 140500116016
 Shivani thakur 1405001160
 Jaimin Solanki
 Vishnu chandel

3. INTRODUCTION TO
ECONOMICS

4. Agenda
 Definition of Economics
 Nature and scope of economic theory
 Positive and normative economics
 Microeconomics vs. Macroeconomics

5. Economics
 Economics is derived from two Greek words
 Oikos- a house
 Nemein- to manage
 Means “managing an household”
Emphasis Significant contribution
Wealth Adam Smith
Welfare Alfred Marshall
Scarcity Lionel Robbins
growth Paul Samuelson

6. Definitions
Adam smith (1723 - 1790),
Father of Economics
 Book “An Inquiry into Nature and Causes of
Wealth of Nations” (1776)
 defined economics as the practical science of
production and distribution of wealth.

7. Definitions
Alfred Marshall (1842 - 1924) wrote a book “Principles of
Economics” (1890)
 Welfare definition
 defined “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”.

8. Definitions
 Lionel Robbins (Scarcity definition)
 book “An Essay on the Nature and Significance of Economic
Science” in 1932.
 According to him, “economics is a science which studies
human behaviour as a relationship between ends and scarce
means which have alternative uses”
 Ends – human wants
 Means – resources with which wants are fulfilled

9. Definitions
Prof. Paul Samuelson (Growth definition)
 defined 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”

10. SCOPE OF ECONOMICS
 Economics - A Science and an Art
 Economics - A Social Science
 Economics is both positive and normative science.

11. Positive Science
 ??????????
 It only describes what it is
 Positive science does not indicate what is good or what is
bad to the society.
 It will simply provide results of economic analysis of a
problem.
 A positive statement is based on facts.

12. Normative science
 It makes distinction between good and bad.
 It prescribes what should be done to promote human
welfare.
 A normative statement involves ethical values.
 Policy making

13. Positive vs Normative
 How much will a new petrol tax
raise the price of petrol?
 Will an increase in the
minimum wage increase
unemployment?
 Why is the price of Pop corn is
Rs 4.20 ?
 Should there be a new tax
on petrol?
 Should there be an
increase in the minimum
wage?
 What should the price of
Pop corn be?
Therefore, economics is a positive as well
as normative science.

14. Microeconomics vs.
Macroeconomics
Microeconomics
The branch of
economics that
studies decision-
making by a single
individual,
household, firm,
industry, or level of
government
Macroeconomics
The branch of
economics that
studies decision-
making for the
economy as a
whole
14

15. Microeconomics
MICROS- Greek- Small (millionth part)
Analyses the economic behaviour of any particular decision making unit such
as a household or a firm.
Studies the flow of economic resources or factors of production from the
households or resource owners to business firms and flow of goods and
services from business firms to households
Studies the behaviour of individual decision making unit with regard to
fixation of price and output and its reactions to the changes in demand
and supply conditions.
Consumer behavior, product and factor pricing
Hence, microeconomics is also called price theory

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