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ECONOMICS

Unit I
Chapter I
Presented by
Dr. Kavita Dive
Indore Institute of Law
Economics
Introduction
The world Economics was derived from the Greek words
Oekos ( A house) and Nomos ( To Manage) which meant
managing a house hold
This word retained that meaning for many centuries the term
Economics was applied to a frugal use of one limited
resources and the term Economy to the manner in which a
particular society organized its resources for the maximum
production of desired goods and services.
Definition of Adam smith
Adam smith, the classical
economist defines economics as
sciences of wealth in his book ,
Political economy , consider as a
branch of science of statesman or
legislator, propose two distinct object,
I, to provide a plentiful revenue or
subsistence for the people, or more
properly enable them to provide such
a revenue or subsistence for
themselves and secondly to supply
the state or common wealth with the
revenue sufficient for the public
services it process to enrich both the
people and sovereign
Features of Economics

Economics is the study of wealth only


Only such material commodities constitute wealth as
are scare and useful.
Economics studies the causes of wealth changes
which means economic development
1 Too much important to wealth
2. Restricted meaning of wealth
3 No Mention of mans welfare
4. No study of means
5. Concept of economic man
Marshall

Definition
Political economic or economics is a
study of man action in the ordinary
business of life it inquires how he
gets his income and how he uses it
thus it is on the one side study of
wealth, and on the other and more
important side a part of the study of
man
Features of welfare definition
1. A study of mankind
2. ordinary business of life
3. Study of individual and social action
4. study of material welfare
Merits of the welfare definition
Avoids criticism made against Adam Smith
Classifies the economics activities
Clear about the nature of economics
Clear on the scope of economics
Criticism
1. Limited scope of economics
2 Restriction of economics to the activities of ordinary man
3. Lack of a clear concept of welfare
.4 Welfare cannot be quantitatively measured
5. classificatory rather than analytical
6.pure science is considered as a social science
7. Positive science is considered as a normative science
Robbins
Features of Robbins Definition
1. Unlimited wants of ends
2. Limited or scares means
3. Means have alternative uses
4. wants are of different intensity
5. Problem of choice
Merits of scarcity definition
1. Scientific
2. Clear on the scope of economics
3. Status of positive science
4. Pure Science
5. A universal definition
6. Point out the central problem of economics
7. Wider content
8.. Clear conception of human behavior for economics
Criticism
1. concealed concept of welfare
2 self contradictory
3. Absence of human touch
4. More abstract
5. Reduce to valuation theory
6. static in content
7. choice of individual as subject matter
8. Ineffective attempt to make economics a positive science
9 Does not explain the problem of unemployment
10. Does not cover the economics growth
Comparison of Robbins and Marshalls
definition

Similarities
1. Wealth and scare means
2. Primary place to man
3. Rational man
Difference
Distinction between economics and non economics activities
Social and human science
Normative and positive science
Classificatory and analytical definitions
Practical and theoretical
Difference regarding man and his welfare
Applicability to different economic system

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