Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek οἰκονομία (oikonomia, "management of a household, administration") from οἶκος (oikos, "house") + νόμος (nomos, "custom" or "law"), hence "rules of the house(hold)". Economics aims to explain how economies work and how economic agents interact. Economic analysis is applied throughout society, in business, finance and government, but also in crime, education, the family, health, law, politics, religion, social institutions, war, and science.Common distinctions are drawn between various dimensions of economics. The primary textbook distinction is between microeconomics, which examines the behavior of basic elements in the economy, including individual markets and agents (such as consumers and firms, buyers and sellers), and macroeconomics, which addresses issues affecting an entire economy, including unemployment, inflation, economic growth, and monetary and fiscal policy. Other distinctions include: between positive economics (describing "what is") and normative economics (advocating "what ought to be"); between economic theory and applied economics; between mainstream economics (more "orthodox" dealing with the "rationality-individualism-equilibrium nexus") and heterodox economics (more "radical" dealing with the "institutions-history-social structure nexus"); and between rational and behavioral economics.

Economics refer to the study that includes factors regarding the usage of resources by people. When we say resources, then it means the talent that people have as well as the time that is made available to them along with various other resources such as the buildings, land, equipments, and various similar handy tools and also the knowledge regarding the contribution of such tools towards the creation of useful products and services.
It further involves the decision regarding the amounts of money to be spent over as well as the amounts that need to be saved, combining various available resources in order to produce some of the useful products and services as well as shaping of the levels of taxation along with the government's role.
As a whole economics can be defined as the study of labor, investments, land, of money, incomes and production of the taxes as well as the government expenditures. People who are known as economists are actually the ones who measure all such factors and work towards figuring out the measures that can increase the overtime along with evaluating the overall well being of rich and poor.
Economics helps all examine the trade-offs between the various goals and, thus, anticipate the consequences of the changes that occur in terms of the government policies, practices of the companies, or may be population composition. Almost every public or private policy involves economics.

Nature and Scope of Economics

Many writers of the early days defined economics as "a science of wealth". Adam Smith commonly know as the father of modern economics, defined economics as "An enquiry into the nature and causes of wealth of nations."
These definitions were defective because they gave much importance to wealth. As wealth is not everything, it only leads to achieve welfare of human. Therefore it is man an which is the aim all of the economic activities.
Professor Dr. Alfred Marshall was the first economist who gave a logical definition of economics. He defined economics as: "A study of mankind in ordinary business of life, it examine that part of individual and social actions which is closely related with attainment and use of material requisites"

Characteristics of Definition:
This definition gave a new direction to the study of economics. Following are the important characteristics of definition.

1. A Social Science
This Definition makes economics a social science. It is a subject that is concerned with the people living in society. According to Marshall, as the behavior of human beings is not same all the time therefore principles of economics cannot be formulated like the laws of sciences. Further laws of economics are not as exact as the laws of natural sciences.

2. Study Of Man
Economics is related to man; therefore it is living subject. It discusses economic problems and behavior of man. According to Marshall it studies the behavior of man In ordinary business of life.

3. Wealth As A Means Of Material Well Being
According to Marshall, wealth is not the ultimate objective of human activities and therefore we do not study wealth, for the sake of wealth. Therefore according to this definition we study wealth as a source of attainment of material welfare.

4. Economics And Welfare
This definition makes economics a welfare oriented subject. We are concerned only with those economic activities which do not promote material welfare of human beings are out of the scope of economics.

5. Materiality
Marshal stresses upon the concept of "material requisite of well being". Therefore according to this definition all economic activities resolve around the acquisition and use of material goods like food, clothing etc. because they increase welfare of human beings. On the other hand non-material requisites of human life like education, recreation are ignored.

6. Normative Outlook

Criticism
"Robbins and other many economists severely criticized this definition on following grounds."

1. Limited To Material Welfare
This definition limits the subject of economics to material welfare of people. But the subject of economics is not limited to the study of material welfare of human beings. In reality both material and non material aspects of wellbeing are studies in economics.

2. Vague Concept of Welfare
The concept of welfare used in this definition is also not clear. The welfare of human beings is not limited to the attainment of material requisites. There are many other factors which affect the human welfare. Further the word "welfare" has different meaning for different persons and different societies. Therefore we cannot define economics using an unclear concept of welfare.

3. Limited Scope
This definition has made the scope of economics limited. Only those activities are studied in economics which are aimed at the attainment of material requisites of well being. Further it ignores the economic activities of a person not living in society. Attainment of non material requisites of human well being fall out of the scope of economics. This division of material and non material aspects of human welfare is not correct.

4. Economics And Welfare
According to Robbins the study of economic activities on the basis of welfare is not good.

5. Moral Judgment
In this definition Marshall makes economics a subject which considers the right and wrong aspect of economic activities. According to Robbins economics in neutral as regards ends and it is not the function of an economist to pass moral judgments and say what is good and what is bad.

6. Unrealistic
This definition appears to be unrealistic as we analyze it critically. The unclear concept of welfare, the division of ends into material and non material, the stress on good and bad, the concept of man living in society etc. all these concepts put unnecessary restrictions and make the scope of economics limited. These ideas make the definition unrealistic.

Conclusion
Although this definition gave a new direction to the subject of economics but it had many weaknesses. Some of the faults of definition are discussed above. For these reasons this definition was replaced by other new definitions of economics.

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