Microeconomics is the study of economics on the
basis of individual. It is considered with the theories of product pricing,
factor pricing and economic welfare.
Is also called price theory. for example: The
theory of demand and supply
Definitions
of scope of economics
1) Science of wealth: By Adam Smith:
"An enquiry into the nature and causes of
wealth of nations"
Science which deals with wealth:- J.B Say
It is highlighted as an important problem faced
by each and every Nation of world ,namely creation of wealth.
Criticisms:-
(I)Adam Smith and other classical economist
concentrated only on material wealth, they totally ignore creation of immaterial
wealth like services of doctors, C.A. e.t.c
(II) The advocates of economics as "science
of wealth" concentrated too much on the production of wealth and ignored
social welfare i.e why this definition is inadequate and incomplete.
(2)
Science of Material Well being: BY ALFRED MARSHALL
Economics is the study of mankind in ordinary
business of life.
(I) It is on one side the study of wealth and on
the other and the most important side the study of man:- By Alfred Marshall
(II) The range of our enquiry becomes restricted
to the part of social welfare that can be brought directly and indirectly into
relation with the measuring rod of money:- By A.C Pigou
In the first definition the economics has been
indicated to be the study of mankind in the ordinary business of life. By
ordinary business we mean those activities which occupy the considerable part
of human effort .
" Marshall clearly pointed on the study of
wealth but more important is the study of man"
Man get precedence over wealth. There is also
emphasis on material requisites of well being. Such as like food, clothing and
shelter are very important economic objectives.
Second definition of Pigou also emphasis on
social welfare but only that part it which can be related with measuring rod of
money.
Marshall's and Pigou's definition of economics
are wider and more comprehensive as they take into account the aspect of social
welfare.
Criticisms:-
(I) Economics is concerned with not only material
things but also immaterial things like services of singer, actor e.t.c Marshall
and pigou choose to ignore them.
(II) Robbins criticised the welfare definition on
the ground that it is very difficult to state which things would lead to
welfare and which will not.
His view is that we should study all those goods
and services whether they promote welfare or not.
3)
Science of choice making:- BY ROBBINS
"Economics is the science which studies human
behaviour as a relationship between ends and scarce means which have
alternative uses."
Definitions
deals with four aspects:-
1) Economics is a science:-
Economics studies how humans try to optimize
(maximize and minimize) certain objectives under given constraints for eg:- it
studies how consumer with given income and prices of the commodities to
maximize their profits.
2) Unlimited ends:-
Ends refers to wants and human wants are
unlimited when one want is satisfied, other wants crop up. If man wants are
limited there would be no economic problem.
3) Scarce means:-
Means refers to resources. Since resources are
limited and economic problem arises. If the resources were unlimited then people
would be able to satisfy all their wants and there will be no problem.
4) Alternative uses:-
Not only resources are scarce they have
alternative uses. For eg: coal can be used as fuel for the production of
industrial goods and is also used for running trains e.t.c.
If there was only single use of the resources
then the economic problem would not arise.
Robbin's definition does not distinguish between
material and immaterial welfare . Anything which satisfies the
wants of the people would be studied in economics. Even if a good is harmful to
a person it would be studied in economics if it's satisfies his wants.
Criticisms:-
(I) Robbins has made economics quite impersonal
and colourless. By making it a complete positive science and excluding
normative aspects he narrowed it's scope.
(II) Robbins definition is totally silent about
certain macro economics aspects such as determination of national income and
unemployment.
(III) it is totally silent to the measures to be
taken out to raise these resources i.e national income and welfare.
4)
Science of dynamic growth and development by SAMUELSON.
Economics is the study of how men and society
whose, with or without the use of money to employ scarce productive resources
which could have alternative uses, to produces various commodities overtime and
distribute them for consumption now in the future.
Paul A
Samuelson:- Definition is comprehensive as it does not
stick to material well being or money measure a limited factor. But it
considers economic growth overtime.BY TAVINDER SINGH ANY SUGGESTION IS WELCOME... THANK YOU..
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