Similarly, financial resources can be used for many purposes. For example, coal can be used as a fuel for the production of industrial goods, it can be used for running trains, it can also be used for domestic cooking purposes and for so many purposes. (iv)Alternative uses: Not only resources are scarce, they have alternative uses. If the resources were unlimited, people would be able to satisfy all their wants and there would be no problem. Since resources (natural productive resources, man-made capital goods, consumer goods, money and time etc.) are limited economic problem arises.
(iii) Scarce means: Means refer to resources. If man's wants were limited, then there would be no economic problem. When one want is satisfied, other wants crop up. (ii) Unlimited ends: Ends refer to wants. For example, it studies how consumers, with given income and prices of the commodities, try to maximize their satisfaction. It studies how humans try to optimise (maximize or minimize) certain objective under given constraints. (i) Economics is a science: Economics studies economic human behaviour scientifically. The definition deals with the following four aspects: His definition is as follows: "Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses". Robbins gave a more scientific definition of Economics. Thus, it is on the one side a study of wealth and on the other and more important side a part of the study of the man", Alfred MarshallĤ. 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.
"Economics is a study of mankind in the ordinary business of life. This makes their definition incomplete and inadequate.ģ. (ii) The advocates of Economics as 'science of wealth' concentrated too much on the production of wealth and ignored social welfare. They totally ignored creation of immaterial wealth like services of doctors, chartered accountants etc. (i) Adam Smith and other classical economists concentrated only on material wealth. The main criticisms leveled against this definition are The study of Economics as a 'Science of Wealth' has been criticized on several grounds. can be solved to a greater extent when wealth is produced and is distributed equitably it goes to the credit of Adam Smith and his followers to have addressed to the problems of economic growth and increase in the production of wealth. (ii) Since the problems of poverty, unemployment etc. (i) It highlighted an important problem faced by each and every nation of the world, namely creation of wealth. The definition of Economics, as science of wealth, had some merits. Say.In the above definition wealth becomes the main focus of the study of Economics. Economics is the science which treats of wealth.
"Economics is an enquiry into the nature and causes of wealth of nations." - Adam Smith.Ģ. In general economics is a subject which deals with human behaviour. Economics is the branch of social science that studies the production, exchange, distribution, and consumption of goods and services.
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