Subject: Economic & Social Development
Topic: Economics : An Introduction

Ques. 1 : What are the definitions of economics?

Ans. Economics as a word comes from the Greek: oikos means ‘family, household, or estate’, and nomos stands for ‘custom, law’ etc. Thus, “household management” or manage-ment of scarce resources is the essential meaning of economics. Economics encom-passes production, distribution, trade and consumption of goods and services. Economic logic is applied to any problem that involves choice under scarcity.

Ques. 2 : Evolution of the subject.

Ans. Initially, economics focused on “wealth” and later “welfare”. Still later, in recent years, it has given sufficient attention to the study of trade offs- giving up one to gain another. The focus on tradeoffs arises from the traditional assumption that resources are scarce and that it is necessary to choose between competing alternatives. Choosing one benefit implies forgoing another alternative the opportunity cost (cost of foregoing an Opportunity).

Ques. 3 : Who is known as the father of Economics & suggest Some definition put fourth by earlier economist.

Ans. Adam Smith, generally regarded as the Father of Economics, author of 'An Inquiry into the Nature' and Causes of the Wealth of Nations (generally known as The Wealth of Nations) defines economics as “The science of wealth.” Smith offered another definition, “The Science relating to the laws of production, distribution and exchange.”

Definitions in terms of wealth emphasize production and consumption, and do not deal with the economic activities of those not significantly involved in these two processes, for example, children and old people. The belief is that non-productive activity is a cost on society. It meant that man was relegated to the secondary position and wealth was placed above life.

Thus arose the shift in the focus to welfare economics study of man and of human welfare, not of money alone. Economics involves social action connected with the attainment of human well being.

Ques. 4 : Discuss the different branches of economics.

Ans. Economics is usually divided into two main branches: Microeconomics which examines the economic behavior of individual actors such as consumers, businesses, households etc. to understand how decisions are made in the face of scarcity and what effects they have.

Macroeconomics, which studies the economy as a whole and its features like national income, employment ,poverty, balance of payments and inflation.

The two are linked closely as the behavior of a firm or consumer or household depends upon the state of the national and global economy.