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 Economics is derived from a Greek word OIKO (house) & Nomos (to manage).  Main concern in economics is resources are limited to satisfy unlimited human wants. 2

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WHAT ABOUT ECONOMICS  These basic necessities of life makes humans to earn for living.  Economics is science of economics activities,it studies how man manages to satisfy his unlimited economic wants with the help of available limited resources.  Economics is a progressive social science. 4

DEFINITIONS OF ECONOMICS  Economics is a science of wealth (Adam Smith).  Economics is a science of material welfare (Marshall).  Economics is science of scarcity & choice(Robbins). 5

ECONOMICS IS A SCIENCE OF WEALTH  Adam smith the forefather of classical economists wrote a book in 1776 “An enquiry into the nature & causes of the wealth of nations”  According to him : Economics is a science which studies the process of production, consumption, distribution & exchange of wealth. 6

ECONOMICS IS A SCIENCE OF WEALTH  The focal point of his definition is :  “ Economics is a science of wealth of country & its growth ” 7

CRITICAL EVALUATION  In 19 th century the Economists like Ruskin, Carlyle & Mathew Arnold criticize his definition economics as “Bread & Butter science”;””Teach selfish & love of money”;”Dark & dismal science”. 8

CONCULUSION:  All that happened because that term economics was interpreted in a very narrow sense( to mean riches & abundance of money) in broader term we can that wealth is mean to satisfy human wants.  In his definition he gave primary importance to wealth & secondary to men. but wealth is for men,not men is for wealth. 9

ECONOMICS IS SCIENCE OF METRIAL WELFARE (MARSHALL)  According to Marshall: “ Economics is the study of mankind in the ordinary business of life. it examines that part of individual & social action which is most closely concerned with the attainment & use of material requisites of well- being” 10

ECONOMICS IS SCIENCE OF METRIAL WELFARE (MARSHALL )  Main Features : 1. It’s a study of ordinary person living in a society.It’s not study of isolated individual 2. It studies only the economic aspect of human being & doesn't have any concern with any other aspect like religion, social & political. Strictly speaking,its relates to how the man earns his income & how he spend it. 3. It studies only material requisites of well-being or cause of material welfare. 4. It does not regard wealth as the be all & the all of economic activities.wealth is sought only for promoting human welfare. 11

CRITICAL EVALUATION:  Narrow down the scope of economics: i. Exclude non-material things. ii. E.g. of lawyer, doctor engineer, singer & consultant.  Relation sought between economic & welfare is wrong approach: i. Some activities are economic activities but are not welfare activities. ii. E.g. manufacturing & sale of intoxicants,such,as,cigars & alcoholic goods. 12

CRITICAL EVALUATION:  Welfare is vague concept & can not be quantitatively measured: 13

ECONOMICS IS SCIENCE OF SCARCITY & CHOICES(ROBBINS)  According to the book “Nature & Significance Of Economic Science” publish in  “ Economics is science which studies human behavior as a relationship between ends & scare means which have alternative uses ” 14

ECONOMICS IS SCIENCE OF SCARCITY & CHOICES(ROBBINS)  Basic features of his definition: i. Human wants are unlimited. ii. Means are limited. iii. Wants are not equally distributed. iv. Means have alternative uses. 15

SCOPE OF EOCONOMICS  Subject matter of economics.  Economics is a science or as an art.  Economics as a positive or normative science.  Economics as social science. 16

SUBJECT MATTER OF ECONOMICS:  The subject matter of economics is also not free from controversy.  How ever today economists consider the subject matter of economics as: “ All those human being economic activities made for making choices among scare resources to allocate them for present & future aiming all maximizing the gain possible are the subject matter of economics ” 17

ECONOMICS AS SCIENCE  It is science in the sense, it is a systematic knowledge derived from scientific study, observation & experiments based on scientific methods. 18

ECONOMICS AS AN ART  Economics is an art too because an art is a system of rules for the attainment of given end. There are several branches of economics which provide practical guidance in the solution of economic problem.  Its is a science in its methodology and an art in its application. 19

Positive & Normative Economics  Positive economics tells us that what are the facts.  For E.g I give charity (involve facts)  Normative economics tells us that what should do.  For E.g I should give charity(involve judgment) 20

Micro Or Macro Economics  Micro Economics:  The study of economic behavior of individual human beings & firms.  Macro Economics:  The study of whole economy. 21