Definitions of Economics
Social Science is a branch of science which studies how societies are organized and function. Various Social Science branches include Sociology, Anthropology, Psychology, Economics and Political Science. Every branch studies the organization and functioning of society from its perceptive. Economics studies the economic behaviour of individuals and organization in society. It also studies individuals and organizations engaged in economic activities concerned with the production, distribution and consumption of goods and services. Hence, Economics is regarded as the queen of all social sciences.
Economic and Non-economic Activities
An economy is a system which provides people with goods and services and directly or indirectly satisfies their wants.
Economic activities are the set of activities carried out by human resources to satisfy their needs. It is essentially concerned with the production, exchange and consumption of goods and services. For example, businessmen may make a profit or experience a loss, while labourers receive wages and salaries as a remuneration of services rendered by them.
Activities which have no economic elements or are not concerned with money and wealth are known as
non-economic activities. There are various types of non-economic activities such as social activities, political activities, religious activities, charitable activities, parental activities and recreational activities. Examples of social activities are organizing marriage parties, attending birthday parties of friends and relatives, while examples of political activities are meetings of various political parties such as the Congress, BJP and ADMK.
Wealth in Economics
The famous book An Inquiry into the Nature and Causes of Wealth of Nations was written by Adam Smith. Adam Smith stated, “Economics is concerned with an enquiry into the nature and cause of wealth of nations, and it is related to the laws of production, exchange, distribution and consumption of wealth.”
Features of the Wealth – Read here
Welfare in Economics
The welfare definition was propounded by Dr Alfred Marshall in his book Principles of Economics in 1890. According to him, “Economics is a study of mankind in the ordinary business of life. It examines that part of individual and social actions which is most closely connected with the attainment and use of material requisites of well-being.”
In this definition, he gave more importance to human welfare in comparison to wealth. He stated that
wealth was only a means to satisfy human wants and not an end in itself.
Features of Welfare – Read here
Scarcity in Economics
The scarcity definition was given by Professor Lionel Robbins in his book An Essay on the Nature and Significance of Economic Science published in 1932. He stated that Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses. He meant that Economics studies activities performed by man to obtain scarce means with alternative uses in order to satisfy their unlimited wants.
Features of Scarcity – Read here
The growth-oriented definition of Economics was given by Professor Samuelson. He stated, “Economics is a study of how people 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 persons and groups of society.”
Features of Growth – Read here
Meaning and Functions of Money
Characteristics of the Indian Economy