DEFINITION AND THE SCOPE OF ECONOMICS
CONTENT
Meaning of Economics,scope of Economics and why do we study economics?
DEFINITION AND MEANING OF ECONOMICS
Economics as a dynamic subject has very many definitions. It is often said that thereare so many definitions of economics as there are economists because they see the subject from different point of view. Some definition given by some economists includes: Adam Smith (18th Century British Economist and Called “Father of Economics”) in 1776defined economics as “an inquiry into the nature and causes of the wealth of nations”.
John Stuart Mill in 1843 defined economics as “the practical science of production anddistribution of wealth”
Alfred Marshal in 1890 defines it as “a study of mankind in the ordinary business of life,earning and enjoying a living”.
J. Daven Port defines economics as “a science that treats phenomena from thestand point of price”.
Edvins Canon defines economics as “the study of things having to do with man’smaterial welfares”.
A. Pigou defines economics as “the study of how total production could be increasedso that the standard of living of people might be improved’’.
However, the most acceptable and widely used definition was by Professor Lionel C in 1932, which defines economics as “the science which studies human behaviour as a relationship between ends and scarce means which have alternativeuses”. The reasons for the popularity of this definition is twofold, namely, it is the only definition which mentions:
Macro economics in the other hand is the study of the economy as a whole includesamong other economic aspects such as inflation, National income, investment, unemployment, international trade etc.
WHY DO WE STUDY ECONOMICS
Economics as a social science, studies human behaviour of the individual, firm andgovernment in the ordinary business of life due to the following reasons:
1 study of economics provides the students with the basic skills for analyzingeconomic problem thereby preparing them better for positions where economic decisions are needed.
2 enables a student to understand the nature of the complexity of the economicactivities.
3 is useful in analyzing patterns of socio-economic behaviour.
4 helps government to promote growth and development thereby improving theirstandard of living.
5 enables students to understand and appreciate various government policies wherechoices have to be made.
6 knowledge of economics is useful to understand effects of the inequalities in thedistribution of income and opportunity.
