Definition of Economics
Economics refers to the social science that studies the economic activities. The economic progress of mankind has been a step wise process starting from the evolution of man, to the modern socio-economic development.
The economy and its constituents include production, consumption, exchange and distribution. There are various definitions of economics. These include: Wealth definition by Adam Smith, he defined economics as “a science of wealth”. The features of wealth definition are that it involves the study of wealth, considers man as an economic being with self-interests, etc. The criticism of wealth definition is that it gives too much stress on wealth and material goods and the way it considers the concept of economic man. Welfare Definition was propounded by Prof. Alfred Marshall and later supported by Prof, A.C Pigou, As per the wealth definition, “Economics is the study of mankind in the ordinary business of life; it examines that part of individual and social action which deals with the attainment of the use of material requisites of well-being”. The features of welfare definition are study of ordinary business of life, mankind and material welfare. The criticism of welfare definition are non-material welfare ignored, no proper explanation, welfare cannot be quantified and limited scope. Scarcity definition, according to Lionel Robbins, Economics is a science that studies the human behavior as a relationship between ends and scarce means which have alternative uses. The features of scarcity definition are multiplicity of ends, scarce means, alternative uses of means, efficient use of scarce resources and science of choice. The merits of scarcity definition are more scientific, universal, wider and analytical definition. The criticisms of scarcity definition are that it is too wide a definition, neglects economic growth and development, etc. The demerits of scarcity definition are that it is contradictory, not applicable to rich countries, etc. Growth Definition as given by Prof. Samuelson defines economics as study of how people and society end up choosing with or without the use of money, to employ scarce productive resources that could have alternative uses to produce various commodities over time and distributing them for consumption, now or in the future, among various persons and groups in society. The features of growth definition of economics are increase in productivity, solution to economic problem, growth of resources, etc.
The scope of economics includes the subject matter of economics which is studied in two parts microeconomics and macroeconomics, nature of economics, which deals with economics as a science or an art and importance and limitation of economics.