This chapter covers the meaning of Economics, its four classic definitions, its scope, the basic concepts, its methods, the nature of economic laws, micro and macro economics, the basic economic problems and the Production Possibility Curve.
1. Meaning and Nature of Economics
- The word 'Economics' comes from the Ancient Greek oikonomikos – oikos means 'households' and Nemein means 'management', 'custom' or 'law'. So Economics means 'management of households'.
- The subject, earlier known as 'Political Economy', was renamed 'Economics' in the late 19th century by Alfred Marshall.
- J. M. Keynes observed: 'Political Economy is said to have strangled itself with definitions'.
| Definition | Economist | Era | Book (Year) |
|---|---|---|---|
| Wealth | Adam Smith (1723-1790) | Classical era | An Inquiry into Nature and Causes of Wealth of Nations (1776) |
| Welfare | Alfred Marshall (1842-1924) | Neo-Classical era | Principles of Economics (1890) |
| Scarcity | Lionel Robbins | New Age | An Essay on the Nature and Significance of Economic Science (1932) |
| Growth | Paul Samuelson | Modern Age | An Introductory Analysis (1948) |