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Posts Tagged ‘Definition’

Definition of Economics given by Adam Smith

Adam smith wrote a book in 1776 whose title was “Wealth of Nations”. In his book he discussed the word ‘wealth’ through its four aspects: production of wealth, exchange of wealth, distribution of wealth and consumption of wealth. There fore it can be said according to Adam Smith:

• Economics is a science of wealth.

Wealth means goods and services transacted with the help of money. Lets discuss four aspects of wealth; first one is production of wealth it shows as to how goods and services are produced. Goods and services are produced by the combination of four factors of production i.e. land, labour, capital and organization.

Second aspect is exchange of wealth there are many procedures of goods and services in a society. Every procedure produces goods and services more than his personal requirement. The exchange of wealth enables everyone in the society to satisfy his multiple wants. Third aspect is distribution of wealth, which means the distribution of goods and services among different sections or individuals of a society. As known by explanation of exchange of wealth that procedures of goods and services exchange the surplus wealth with each other through out the year. The last and forth aspect is consumption of wealth that is using up the utility of goods and services for the satisfaction of wants is called the consumption of wealth.

Definition of Economics given by Marshall

Alfred Marshall’s Principles of Economics was the most influential textbook in economics. Marshall defined economics as

• Econimics is 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 wellbeing. Thus it is on one side a study of wealth; and on the other, and more important side, a part of the study of man.”

Many other books of the period included in their definitions something about the “study of exchange and production.” Definitions of this sort emphasize that the topics with which economics is most closely identified concern those processes involved in meeting man’s material needs. Economists today do not use these definitions because the boundaries of economics have expanded since Marshall. Economists do more than study exchange and production, though exchange remains at the heart of economics.

Definition of Economics given by Robbins

Most contemporary definitions of economics involve the notions of choice and scarcity. Perhaps the earliest of these is by Lionell Robbins in 1935:

• “Economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses.”

Virtually all textbooks have definitions that are derived from this definition. Though the exact wording differs from author to author, the standard definition is something like this:

• Economics is the social science which examines how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants.