What is Economics ? Definition and scope of economics

Fundamental of Economics 

Definition of Economics :-

The analysis of economics environment requires the knowledge of economics decision making and hence the study of "Economics " is significant. 

There are 4 Definitions of Economics  :- 

i. Wealth Definition 

ii. Welfare Definition 

iii. Scarcity Definition 

iv. Growth Oriented Definition 

WEALTH DEFINITION :-

ADAM SMITH defined "Economics as a science which inquired into the nature and cause of wealth of the Nation. "

                According to this definition, Economics is a science of study of wealth only which deals with production, Distribution and Consumption. 

 This wealth centered definition deals with the cause behind the creation of wealth and only considers material wealth. 

WELFARE DEFINITION :- 

According to ALFRED MARSHALL "ECONOMICS is the study of the man inthe ordinary business of life."

It examine how a person  gets his income and how he invests it.  Thus on one side it is a study of wealth and on the other most important side, it is a study of well being. 

SCARCITY DEFINITION :-

ROBBINS defines that "Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses. 

FEATURES :- 

• Human wants are unlimited 
• Alternative use of scarce resources 
• Efficient use of scarce resources 

Need for optimization 

GROWTH ORIENTED DEFINITION :-

By PAUL. A. SAMUELSON "Economics is the study of how man and society choose with or without the use of money to employ the scarce productive resources, which have alternative uses ,to produce various commodities over time and distributing them for consumption. 

                   It analysis the costs and benefits of improving patterns of resources allocation. 

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SCOPE OF ECONOMICS :-

economics is a social science. It studies man's behavior as a rational social being. For a long time  the scope of economics was kept confined within narrow limits. Traditional economist considered it as a science of wealth in relation to human welfare .Earning and spending of income was considered to be the end of all economics activities. 

             ALFRED MARSHALL'S ,subsequently reduced the taint of gross materialism from economics , by bringing human welfare side into its scope. 

                       It was redefined as a science of wealth in relation to human welfare. According to Alfred the subject isbmore a study of man's welfare than wealth.  Wealth was considered as a means to an end -the end being human welfare. 

In a situation where resources are limited, how an individual, either as a consumer orbas aproducer, can optimize his goal is an economic decision. 

                 Actually, the scope of economics lies in analysing economics problems and suggesting policy measures.

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