Definition of Economics

Join this study group for discussion on Economics @ Finance Clubb

Share to download class notes

[sociallocker id=”1679″]Thanks for sharing this lesson. Click here to download[/sociallocker]

1.1      Definition of Economics

Several definitions of Economics have been given. For the sake of convenience let us classify the various definitions into four groups:

eco definition

1.1.1     Science of wealth

 “An inquiry into the nature and causes of the wealth of the nations” [Adam Smith]

 “Science which deals with wealth” [J B Say]

1.1.2     Science of material well-being

Under this group of definitions the emphasis is on welfare as compared with wealth in the earlier group.

“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.” [Alfred Marshall]

“The range of our inquiry becomes restricted to that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money” [A.C. Pigou]

1.1.3     Science of choice making

 “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses”. [Lionel Robbins]

1.1.4     Science of dynamic growth and development

“Economics is 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 amongst various people and groups of society”.

[Paul A. Samuelson]

The above definition is very comprehensive because it does not restrict to material well-being or money measure as a limiting factor. But it considers economic growth over time.

1.1.5     Other Definitions

“Economics is the study of how in a civilized society one obtains the share of what other people have produced and of how the total product of society changes and is determined”. [Prof. Henry Smith]

“Economics is what Economists do” [Jacob Viner]