MANAGERIA

L
ECONOMICS
DR. ANJALI DUBEY
 • It shows how scarce
resources can be used to

ECONOMIC increase wealth and human

welfare. The central focus

S: of economics is on scarcity
of resources and choices
among their alternative
uses.
 i.
Wealth Viewpoint
•: "Economics is an enquiry
into the nature and
causes of wealth of
nations."- Adam Smith.
In the above definition wealth
becomes the main focus of the
study of Economics. The
definition of Economics, as
science of wealth, had some
merits.
ii. Welfare • Alfred Marshall,
economist
a
associated
neo-classical
the term
Viewpoint: economics with man and his welfare.
• According to him, “Economics is a
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 well-being.
Thus, it is on the one side a study of
wealth and on the other and more
important side a part of the study of
 iii. Scarcity
Viewpoint:
• Lionel Robbins defined economics
as a science of scarcity or choice in
his book “An Essay on the Nature
and Significance of Economic
Science”, published in 1932.
• According to him, “Economics is
the science which studies human
behaviour as a relationship
between ends and scarce means
which have alternative uses.”
 • Economics is the branch of social
science that studies the
production, exchange,
distribution, Public Finance and
consumption of goods and

ECONOMIC
services. In general economics is a
subject which deals with human

S behaviour.
• It shows how scarce resources can
be used to increase wealth and
human welfare. The central focus of
economics is on scarcity of
resources and choices among
their alternative uses.
What is economics?

A. The study of a government's distribution of resources

B. The study of consumers' spending habits
C. The study of buying and selling in the stock market
D. The study of a society's allocation of resources
“Economics is the Science of
Wealth” who gave this definition ?

(A) J. K. Mehta
(B) Marshall
(C) Adam Smith
(D) Robbins
“An Enquiry into the Nature and
Causes of Wealth of Nations” is the
book of economist—
(A) Adam Smith
(B) Marshall
(C) Robbins
(D) None of above
Who has given scarcity definition of
economics ?

(A) Adam Smith

(B) Marshall
(C) Robbins
(D) Robertson
Worksheet 1
Arrange these parts of ECONOMICS
in the sequence according to their
origin: 1.Production
2. Public Finance
3. Exchange
4. Distribution
5. Consumption
Arranged parts of ECONOMICS
in the sequence of their origin
1. Consumption
2. Production
3. Exchange
4. Distribution
5. Public Finance
Subject Matter/
Scope/ Parts of
Economics

1. Consumption:
The satisfaction of
human wants through
the use of goods and
services is called
consumption.
Subject Matter/Scope/Parts of Economics...
2. Production:
Goods that satisfy human
wants are viewed as “bundles
of utility”. Hence production
would mean creation of utility
or producing (or creating)
things for satisfying human
wants. For production, the
resources like land, labour,
capital and organization are
needed.
Subject Matter/Scope/
Parts of Economics...

3. Exchange:
Goods are produced not
only for self-consumption,
but also for sales. They are
sold to buyers in markets.
The process of buying and
selling constitutes
exchange.
 Subject Matter/Scope/Parts
of Economics...

4. Distribution:
The production of any agricultural
commodity requires four factors,
viz., land, labour capital
and organization. These four
factors of production are to be
rewarded for their services
rendered in the process of
production.
Subject Matter/Scope/Parts
of Economics...

5. Public finance:
It studies how the
government gets money
and how it spends it. Thus,
in public finance, we
study about public revenue
and public expenditure.
Types of Economics
Types of Economics…
1. MICRO ECONOMICS :
Analyses the economic behaviour of any
particular decision making unit such as a
household or a firm with regard to fixation
of price and output and its reactions to the
changes in demand and supply conditions.
Hence, microeconomics is also called price
theory.
Types of Economics…
2. MACRO ECONOMICS
studies the behaviour of the economic
system as a whole or all the decision-
making units put together Macroeconomics
deals with the behaviour of aggregates like
total employment, gross national product
(GNP), national income, general price level,
etc. So, macroeconomics is also known as
income theory.
Worksheet 2

Classify these
contents
between
Micro &
Macro
Economics:
Sol.
 POSITIVE ECONOMICS N O R M AT I V E E C O N O M I C S

•What is it •What ought to be

•No value judgements •Value judgements
•Why people use Money •Why should people use
Money