Economics is a social science which studies how human beings make choices to use scarce resources to satisfy their unlimited wants.
Introduction
The term ‘economics’ in English language has its origin in two Greek words Oikos (household) Nemein (management). Thus they mean ‘management of household’. Wants of each household are unlimited but most of the means to satisfy them, like food, cloth etc. are limited or scarce. People cannot have everything that they want, so they have to choose among the available alternatives. However scarcity forces people to choose, economics is sometimes called the science of choice – the science that explains the choices that people make and predicts how changes in circumstance affect their choices.
Economics is the study of how human being make choices to allocate scarce resources to satisfy their unlimited wants in such a manner that consumer can maximize their satisfaction production can maximize the profit and the society can maximum its social welfare.
Definitions of economics:-
Economics is a growing branch of knowledge. Different economist have given different definitions. These are:-
- Wealth definition
The father of modern economist Adam Smith and his book “An Enquiry into the nature and causes of wealth of nation’’ published in 1776. According to Adam Smith economics is an enquiry into the nature and causes of wealth of nations.
2. Material Welfare Definition
This definition is given by Dr Marshall in his book “Principle of economics” published in 1890. According to Dr. Marshall “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 use of material requisites of well being”.
3. Growth Oriented Definition
Growth Oriented Definition is given by modern economists like Samuelson, Peterson, Ferguson etc. “economics is a science that studies those activities of man which he undertakes to maximize his satisfaction by making proper use of his scarce means.”
Conclusion
In conclusion, we can say that Adam Smith’s definition of wealth is incomplete and unscientific. In this definition wealth is more important than human beings. Marshall’s welfare definition is more practical than Smith’s definition, but its language is not scientific Because this definition does not contain about human economic activities. Professor Robbins’ definition of scarcity is logical and scientific but it is not practical.
We can say that economics is the study of how human beings make choices to allocate scarce resources to satisfy their unlimited wants .
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