Introduction to Economics

Economics as a subject has many definitions. Different economic scholars (economists) define economics based on their personal understanding, ways, and views. 

Adam Smith (1776):

Adam Smith is regarded as the father of economics. In his book titled “The Wealth of Nations”, he defined economics as an inquiry into the nature and cause of the wealth of nations. Adam Smith initiated the idea of discipline. We refer to him as “The Father of Economics”. His aim was to investigate the reasons for the discrepancy or disparity, in the level of wealth of nations.

John Stuart Mill (1843):

John Stuart Mill defined economics as “the practical science of production, and distribution of wealth”. Mill was interested in the amount of wealth possessed by an individual, or how wealth is produced and shared among the people.

A.C. Pigou:

He defined economics as the science of material welfare. To him, Economics is a means of studying how production could be increased so that the standard of living of the people will improve. He explained further, that economics should be centred on, “How to increase the material well-being of people, by increasing total production”.

Alfred Marshal (1890):

He defined economics as the study of mankind in the ordinary business of life. Alfred Marshal explains that economics is the study of wealth, and also the study of man, in his daily economic activities, which has to do with the accumulation of wealth by people.

Professor Lionel Charles Robbins (1932): 

He defined economics as a social science which studies human behaviour, as a relationship between ends and scarce means, which have alternative uses. Lord Robbin’s definition is widely accepted because it covers all the concepts in economics, which include human behaviour, production, individual consumption, distribution, scarcity, etc.  Lionel Robinson’s definition shows a positive relationship in the following.

1. Economics as a social science that studies human behaviour.

2. Human wants are numerous.

3. There are limited resources available to satisfy unlimited wants.

4. Scarce resources. 

Scope of Economics:

It relates to economic activities that have to do with the production, distribution, and consumption of goods and services. Economics deals with the scarce resources in societyThe term society is derived from the Latin word 'socius' meaning friendship or companionship. Society is a community, nation or group of people who share the same traditions, institutions, rules and... More, it explains how the individual, firm, and the government react to economic situations.

The scope of economics also explains the decrease and increase in the price of goods and services, how resources are available, and the way to handle problems or issues.