Aspects of Economics

Keywords: economics definitions, economic principles

Economics is a favorite, useful and significant public analysis. It studies economical activities of a guy. Economical activities are those activities, which are worried with the effective use of such scarce means as can meet the desires of man. Individuals wants are infinite, in the sense, that as soon as one want is satisfied another vegetation up. A lot of the means of satisfying these needs are limited, because their resource is less than demand. These means have alternative uses; there emerge a problem of choice. Everybody must bother making a choice regard to the use of his scarce means so that he may get maximum satisfaction from them. In short, Economics is the study of these activities of human beings, which are concerned, with the satisfaction of infinite wants through the use of limited resources.

Economics is not concerned with lifeless matter, as is the situation with natural knowledge like physics and chemistry.

Evolution of Economics:

The term 'Economics' is derived from two words of Greek words, namely, Oikos (Household) and Nemein (to manage) meaning therefore Household management. Earlier ii used to be called as political economy. As a scholarly subject, the study of economics is barley 200 yrs. old. The proper execution of economics studies today is shaped by ADAM SMITH, the creator of modern Economics. His famous booklet, " an enquiry into nature and factors behind wealth of countries:" was published in 1776.

In 1933, Prof. Ragnar Frisch, the famous economist of Oslo University Norway, divided the study of economics into two parts-

1. Microeconomics also called Price Theory

2. Macroeconomics also known as Theory of Income and Work.

Definition of Economics:

It is difficult to give an accurate explanation of economics. A test of good classification is that it delimits restrictions of the topic clearly and effectively. In what of Seligman, " Economics has endured more than other self-discipline from the malaise of polemics about definitions". In this esteem Barbara Wootton's remarks, " whenever six economists accumulate there are seven opinions", is apparently quite pertinent.

There are two distinctive techniques of the economists according of this is of economics

1. No need of defining economics

According for some modern economists the subject of economics has been growing continuously. It will therefore be poor to limit its growth to the confines of confirmed definition.

2. Requirement of defining economics

Most of the economists agree with a view that defining economics is a must as it becomes possible to review of a topic, understanding of it clinically and properly. Nobel laureate Prof. Samuelson observes, "Beginners often wants a short meaning of economics and in response to the demand there is no shortage of resource".

In order to help the study, definitions of Economics have been broadly split into four parts:

1) Wealth Meaning - Adam Smith

2) Welfare Explanation - Marshall

3) Scarcity Explanation - Robbins

4) Growth Driven Definition - Samuelson


According to traditional Economists like Adam Smith, J. B. Say, Walker, J. S. Mill etc. economics is a topic that studies aspect of wealth and its production, consumption, exchange and distribution etc.


Adam Smith, "Economics is an enquiry into the nature and causes of wealth of countries".

J. B. Say, " Economics is the research which snacks Wealth".

Walker, " Economics is your body of knowledge which relates to riches".

Senior, " The topic Treated by political economics is not joy but wealth".

J. S. Mill, " Economics is the practical science of creation and syndication of prosperity".


1) Economics is the study of riches only. It deals with consumption, development, exchange and syndication. It gives most important place to wealth and secondary spot to research of man.

2) Dynamics or Meaning of Prosperity. Only such material commodities constitute riches are scarce and useful. Material goods are those goods which can be seen or touched, for example material, furniture etc. Non - material goods like services and free goods like air and drinking water are not riches.

3) Causes of Wealth. Economics looks for to investigate the causes that lead to increase of wealth. There are two ways of increasing wealth:

a. By increasing the supply of goods through large - level production made possible by saving the commodity

b. By increasing the demand for goods through expansion of market.

4) Economic man The followers and fans of wealth meaning of economics have thought such a guy who is totally aware of his self - interest and who makes persistent efforts to accomplish his selfish ends to the maximum. Such a man is called financial man.


The main merit of wealth definition is the fact that it offers helped develop economics as an considerable and independent analysis pertaining to problems of wealth. Economics hadn't developed as an unbiased and important study before 1776. Previously economics used to be cured as a report dealing with prosperity getting, trade and agricultural activities of the state. According to riches definition the purpose of the study of economics is to increase the prosperity of both individual and their state.


i. More emphasis on wealth This definition has given more importance to prosperity than to man. Prosperity needs precedence over man. Actually, wealth is a means to satisfy man's wishes. Man, not prosperity should have been given greater importance.

ii. Narrow meaning of wealth Matching to this explanation riches means only tangible goods such as apple, furniture, workplace, supporter etc. Non - materials goods or services like this of doctor, nurse, lawyer etc. have been excluded from it.

iii. Idea of Economic Wealth Prosperity explanation of economics is dependant on the concept of monetary man. But relating to Marshall and his fans such as monetary man who works for his selfish motives exclusively is not found in real life. Economics is therefore is a study of real communal human being and not of monetary man.

iv. Neglect of welfare This classification attaches no value to the study of monetary welfare of modern culture. It lays too much focus on the analysis of riches - getting activities by themselves. It will pay no focus on the financial well - being of the modern culture by proper use and equitable circulation of prosperity.

v. Neglect of the condition of scarcity and Choice. This classification completely ignores the analysis of two main top features of monetary activities, namely:Scarcity and Choice. Desires being endless and financial goods having several uses being limited, there occurs the problem of choice.

vi. Disregard of means to attain wealth This definition selects attainment of riches as the sole purpose of economics, but it generally does not designate the means, that ought to be adopted to obtain wealth. This classification gives no clear indicator concerning whether riches obtained through legal or unlawful means. As a matter of fact, economics studies only those method of prosperity - getting which are lawful and.

vii. Narrow subject matter - subject This classification has limited the opportunity and subject - matter of economics. Actually it does not study the acquisition of materials goods alone. But as it should embrace both materials goods as well as non - material services.

In brief, economics is not only a study of wealth. Riches - classification of economics is quite hazy and narrow.


Neo - classical economists like Marshall, J. S. Mill, Pigou, Cannan etc. have included in the opportunity of economics those activities of man that are undertaken to obtain material goods which promote the welfare of man kind.


In the words of Marshall, "Economics is a report of mankind in the normal business of life; it examines the part of individual and interpersonal action which is most carefully linked with the attainment and with use of material requisites of wellbeing. "

Regarding to Cannan, "The purpose of political overall economy is the reason of the overall causes on which the material welfare of human beings depends. "

According to Penson, " Economics is the technology of material welfare"

In what of Beveridge, "Economics is the analysis of general methods by which man co- operate to meet their material needs"


1. Importance to the study of Man These explanations have accorded more importance to the analysis of man than to riches. Wealth is merely a means to satisfy desires of the man.

2. Research of Friendly Man In economics, one studies the economic activities of these men who are in the society. Individual and collective activities of such men that are part and parcel of the world are analyzed in economics.

3. Ordinary business of life This means those financial activities of man which can be mostly concerned with riches - getting and riches - spending.

4. Analysis of real man Economics studies real man who has several virtues, is convinced in interpersonal welfare and it is influenced by monetary and non - monetary motives.

5. Materials requisites Economics studies those activities of the person which are strongly connected with materials requisites of well - being.

6. Welfare Economics studies those materials means which promote individual welfare. Economics is a topic of man's materials well being. It really is most closely connected with attainment and the use of the material requisites of well - being.

7. Research and Art According to these meanings, economics is both a knowledge and a skill. It is a positive research as it undertakes systematic study concerning material welfare of human welfare of humans. Additionally it is a normative research, as it undertakes to study these ideas that help promote materials welfare. It is also a skill as it informs those laws and regulations that augment financial welfare.

8. Classificatory These explanations have divided the economics activities of man into two classes that is typical and extraordinary; welfare and non welfare, material and nonmaterial; communal and specific etc.

9. Money is the way of measuring Material Welfare Matching to Pigou, materials or economical welfare is that part of social welfare which may be measured straight or indirectly with the measuring fishing rod of money.


Welfare explanations of economic are more relevant, thorough and methodical than wealth definitions. Credit for changing economics as a Technology of People Welfare from a Research of Wealth goes to these meanings. Welfare definition stresses the fact that economic will not study wealth by itself somewhat it studies individuals welfare as well. Thus welfare explanation has accorded economics a position of a superior social science. Therefore Economics has been thought to be "an engine motor of sociable betterment".


i. Regarding Common business of life This is of the word is not clear.

Marshall has used this term to indicate economic activities, that is, activities concerned with prosperity - earning and wealth - spending.

ii. Limited Opportunity This definition possessed narrowed the opportunity of economics. Economics need not confine itself entirely to the study of attainment of materials goods.

iii. Uncertain concept of welfare The idea of welfare is ambiguous, uncertain and short-term. Study of materials welfare makes economics as an uncertain research. The idea of welfare belongs to the realm of mindset. It varies as time passes, place, conditions and people.

iv. Economics is a Human Research It studies the economic activities of these men who reside in modern culture, is also incorrect. It studies economical activities of all human beings if they are participants of culture or not.

v. Economics is merely a Positive Technology Economics is the function of Ethics. Economics will not give any idea to solve economical problems. It really is 'neutral between ends'. It really is wrong to call it normative science or a skill.

vi. Impractical Its assumption that those activities of man are studied in it which are concerned along with his well -being is wrong. It is not so form sensible perspective. Economics studies all those activities that happen to be related to income - spending by man, if they promote his health or not.

In brief welfare meaning of economics is superior to wealth classification but relating to Lord Robbins it is Classificatory and Filter Definition.


With respect to Scarcity meaning of economics, Austrian economists Menger, Petter and British economists Stigler acquired portrayed his views but it was evaluated in details by Prof. Robbins in his publication "An Essay on the type and Need for Economics Research" published in 1932.


Regarding to Lord Robbins, "Economics is a knowledge that studies individuals tendencies as a romantic relationship between ends and scarce means that have different uses".

In the words of Harvey, "Economics is the study of how men allocate their limited resources to give their wants".

In the words of Scitovosky, "Economics is a science concerned with the administration of scarce resources".


1. Unlimited Would like or Ends By Ends, Robbins means wishes. In economics, wants of man are concerned with goods and services. They are called economic wants. A couple of no limits of the wants. As one is satisfied another one crops up. This string of desires is unlimited. Economics is concerned with the satisfaction of monetary wants regardless of their being virtuous or otherwise.

2. Limited or scarce Means Wants are greater than means. As the Demand is more than the resource.

W = Wants

M = Means

> = Greater Than

3. Alternate Uses of Means These Scarce means have substitute uses. Eg. Dairy we know means, is a way. It could used for getting ready Butter, curd, cheese etc.

4. Desires Differ in Urgency Man has several desires, but at any given time one of these wants may become more immediate and important than other wants. As such needs differs in urgency. A person wishes for his unwell child, medicine, dairy and berry.

5. Economic Problem When all characteristics of individuals life; namely, endless wants, scarce means, different uses of means and various urgency of wishes become operative, there occurs the problem of choice. One has to produce a choice as to which want to be satisfied first and by what means. Problem of choice making is called economic problem.

6. Opportunity Cost Description tells us that it is due to the problem of choice that in order to satisfy one want we must forego another. We cannot fulfil all our wants(ends) together. The opportunity cost of something is always expressed in terms of another best alternative foregone.


1) Positive Technology As this is explains the nature of monetary activities. It really is neutral with regard to welfare. It really is silent about value - common sense. It is neither a normative research nor art. It is just a positive knowledge.

2) Study of Human Behavior The definition has a study of human action instead of a study of a public man. Economics studies the monetary activities of all humans whether surviving in or out of world. Economics studies the behavior of man both at specific and public level.

3) Analytical Economic problems happen because ends (needs) of man are unrestricted but the methods to satisfy them aren't only scarce but also have alternate uses. Man must bother making a choice with regard to ends and scarce means. This definition is a methodical analysis of the foundation of financial problems and their solution.

4) Wider Scope Economics encompasses a variety of economic activities whether they are related to materials goods or non - material services; if they are conducive to well - being or not.

5) Universal This definition is concerned with the challenge of infinite ends(wants) and scarce means. This issue is found from anywhere and in any type of market, that is capitalism, socialism etc.

6) More logical explanation of economical Problem This classification has offered a far more logical and specific explanation of the type of economics. Economic problem will not arise due to material well - being. It occurs mainly due to the scarcity of means with regards to their demand. Issue of choice or Valuation, which is the key problem of economics, arises because of scarcity of means and tier different uses.


i. Ignores Sociable Facet of Economic Activities Robbins classification ignores the cultural aspect of economic activities. Robbin is wrong when he holds that the actions of these who live outside the world also form area of the research of economics. Need of the analysis of economics is experienced only when monetary problems assume cultural significance.

ii. Economics is not natural as regards Ends Economics is communal research. Economists have to pronounce their judgment as to which ends are commendable and those are base and so you need to discarded. In what of Thomas, "The function of any economist is not only to explore and demonstrate, but also to advocate and condemn".

iii. Concealed Idea of Welfare This classification refers to maximization of satisfaction or welfare as pertains to the analysis of economics to allocating the scarce means into alternate uses in such manner concerning get maximum satisfaction.

iv. Very Huge scope of Economics It has unnecessarily widened the opportunity of economics. If economics is to be considered as the analysis of choice of most types of scarce means, then it would become difficult to decide which action of man is usually to be analyzed and which is to be overlooked.

v. Not only a Positive Science Description asserts that economics is a good technology that concerns itself with mere choice - making valuation and this it has nothing to do with ethics or welfare of man.

vi. Section of Personality This is has splitted the personality of economists into two parts: as an economist where he simply analyses economical phenomenon and does not bother about its good or bad effects, and since a citizen when he expresses its good or bad effects. But personality can't be so divided s when the monetary phenomenon is analyzed, its good or bad effects are also judged.

vii. Impractical This meaning has rendered monetary as impractical subject.

It is known to most of us that are looking are endless and means are scarce. Economic cannot give any advice in this esteem. If it is so, then economics does not have any practical energy.

viii. Scarcity is not the cause of Economic Problem This explanation is based on wrong assumption that scarcity is the primary reason behind arousal of economical problems. Many important problems including the problem of unemployment and unhappiness are financial problem nevertheless they arise not due to scarcity.

ix. Analysis of Static Condition Matching to this description means and ends are assumed to be constant. Consequently, this description has made economics a static review. As in true to life means and ends are always changing. Monetary growth is mainly due to constant change in the means.

x. Not totally applicable to Rich Countries This description does not apply to wealthy countries because in those countries many monetary problem arise scheduled to plenty rather than scarcity.

xi. Not relevant to under - developed Countries This meaning is inapplicable to under developed economies as the challenge in these economies is to make proper use of the resources.

xii. Not relevant to Centrally Planned Economics This classification has little relevance to centrally designed economics because the duty of preference making vets with the world as a whole and not with a person. Under organized economies man's economical actions are not always predicated on his rational habit, alternatively the same are determined by the government insurance policies.

xiii. Organic and Abstract This meaning has made economics a sophisticated and emotionless subject. It is a meaning of economics for economists. It has no utility for a typical man.

xiv. Use of Words 'Means' and 'Ends' The difference between your words ends and means is not clear. Something may be a mean at one time and a finish at another time.

In brief, Robbins meaning is a technological and analytical meaning of economics. Its main defect is it has cured economics as a mere theoretical study. It has ignored the useful or welfare aspect of economics. In fact, economics can't be separated from its welfare content.


According to modern economists like noble prize - success Prof. Samuelson, Benham Lipsey, Steiner, Ferguson etc. both the problems concerning dynamics of scarce means and their proper use are the subject of review of economics. Problems of today's use of scarce resources is principally a problem of choice - making and the situation of their future progress is a problem of economic growth. Subsequently, economics can be involved with Choice - making and financial growth.


In what of Nobel reward winner Prof. Samuelson, "Economics is the study of how people and society conclude choosing with or without the use of money, to employ scarce profitable resources which could have alternative uses, it produces various goods as time passes and distributes them for consumption, now or in the foreseeable future, among various folks and groupings in culture. It analyses costs and advantages of improving patterns of resources allocation. "

According to Benham, "Economics is the study of the factors affecting employment and quality lifestyle".

C. E. Ferguson has identified economics in these terms, " economics is a report of the economical allocation of scarce physical and individuals means (resources) among fighting ends, an allocation that achieves a stipulated optimizing or increasing objective. "


1. Economical resources These definitions underline the point that economics is a report of monetary resources. These economic resources refers to natural, individual and physical resources which satisfy human wishes but are scarce and have choice uses.

2. Efficient allocation of resources Choice - making is the key issue of economics. Efficient allocation and use will be the chief objectives of preference - making.

3. Full usage of resources According to growth - oriented definitions, economics is not worried about the allocation of resources only but also with their full use and occupation.

4. Upsurge in resources This classification also underlines the fact that the objective of economics is to boost the quantum and efficiency of resources in future. This results within an increase in the development rate of economy, more job and higher standard of living


1) Realistic Justification of financial problem This meaning offer realistic description of economic problems. Financial problems happen because needs are unrestricted but means to satisfy those wants are limited.

2) Knowledge and Art Corresponding to Samuelson, economics is oldest among arts and newest among the band of science. In fact it is the queen of interpersonal sciences.

3) Not Natural in regards to Ends According to these definitions, economics welfare varieties apart of the analysis of economics. Economic welfare is the fact part of basic welfare which is assessed in terms of money. Economies studies both materials and non - materials means of economic welfare.

4) Practical These explanations have rendered economics a more functional and useful subject. Economics does not analyses financial problem only rather it suggests steps to solve them.

5) Dynamic These meanings have imparted dynamism to economics. Analysis of economics is not restricted to present problems relating to consumption, production, distribution, etc. of economic resources, but it studies their future problems as well.

6) Universal These explanations are universal. They are worried about the economic problems of all types of economies, developed or underdeveloped.

7) Analysis of Economic Quantities Boulding supports that matching to growth - oriented explanations of economics, a significant part of the economic analysis relates to the exploration of the causes identifying the from of financial quantities and their shared relations.

In short, these meanings of economics are superior and comprehensive. Growth - focused explanations of economics include the merits of the meanings as given by Marshall and Robbins. These meanings have given a far more quantitative, vibrant and sensible form of research of economics.


Different Economics have given different meanings of economics. Boulding is of the view that any single concise meaning of economics will be limited. Needless to say to identify it as "a report of mankind in a ordinary business of life" is to give a very wide view of economics.

According to Adam Smith, "economics is a study of wealth. Robbins is of the view that economics is a research that studies individual habit as a marriage between ends and scarce means that have alternative uses

Picking up the term wealth form the definition of Adam Smith, 'welfare' from that of Marshall, 'Scarcity' from that of Robbins and 'financial progress' from that of Samuelson, an acceptable explanation of economics can be constructed in these words: "Economics is a topic that studies those activities of man which are concerned worth the utmost satisfaction of wishes or with the advertising of welfare and economical progress by the effective consumption creation and exchange of scarce means having choice uses. "


Adam Smith, "Economics can be an enquiry in to the nature and causes of wealth of nations".


  • Economics is the study of riches only. .
  • Nature or Interpretation of Prosperity.
  • Causes of Prosperity.
  • Economic man


  • More focus on wealth.
  • Narrow interpretation of wealth
  • Concept of Economic Wealth
  • Neglect of welfare
  • Neglect of the situation of scarcity and Choice.
  • Neglect of means to attain wealth
  • Narrow subject - matter


In what of Marshall, "Economics is a report of mankind in the normal business of life; it examines the part of specific and communal action which is most closely connected with the attainment and with use of materials requisites of well-being. "


  • Importance to the analysis of Man
  • Study of Sociable Man
  • Ordinary business of life
  • Study of real man
  • Material requisites
  • Welfare
  • Science and Art
  • Classificatory
  • Money is the measure of Material Welfare


  • Regarding Standard business of life
  • Limited Scope
  • Uncertain concept of welfare.
  • Economics is a Human Science
  • Economics is only a confident Science
  • Impractical


According to Lord Robbins, "Economics is a research that studies human habit as a romantic relationship between ends and scarce means which have different uses".


  • Unlimited Would like or Ends
  • Limited or scarce Means
  • Alternative Uses of Means
  • Wants Change in Urgency
  • Economic Problem
  • Opportunity Cost


  • Ignores Social Aspect of Economic Activities
  • Economics is not neutral in regards to Ends".
  • Concealed Concept of Welfare
  • Very Wide scope of Economics
  • Not only an optimistic Science
  • Division of Personality
  • Impractical
  • Scarcity is not the reason for Economic Problem
  • Study of Static Condition
  • Not fully appropriate to Rich Countries
  • Not suitable to under - developed Countries
  • Not relevant to Centrally Planned Economics
  • Complex and Abstract
  • Use of Words 'Means' and 'Ends


In what of Nobel prize victor Prof. Samuelson, "Economics is the study of how people and culture conclude choosing with or without the use of money, to hire scarce beneficial resources that may have different uses, it produces various goods over time and distributes them for usage, now or in the future, among various people and organizations in society. It analyses costs and great things about improving habits of resources allocation. "


  • Economic resources
  • Efficient allocation of resources
  • Full usage of resources.
  • Increase in resources


  • Realistic Justification of monetary problem
  • Science and Art
  • Not Neutral in regards to Ends
  • Practical
  • Dynamic
  • Universal
  • Analysis of Economic Quantities

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