The Nature and Scope of Economics
The term economics is derived from two Greek words Oiko meaning household and Nomia meaning management. Thus, according to the Greek, the term Economics means house hold management. Man is a struggler for survival and is faced with the satisfaction of many unlimited wants with limited resources. Economist have therefore come with the scientific analysis of how this problem can be solved at both society and individual level.
SOME EARLY DEFINITION OF ECONOMICS
Many works have been published in Economics and as such, it has led to the abundance of definition of Economics there are so many definitions of Economist. Some of these include
- Adam smith:
In his book titled “the wealth of nature” published in 1776, he defined economics as an inquiring into nature and causes of wealth of nations. By this he is concerned with the aspect of wealth and the means by which total volume of production could be increased.
- John Stuat Mill:
He defined Economics as “the practical science of the production and distribution of wealth”.
- Alfred Marshal:
He defined Economics as “the study of mankind in the ordinary business of life”. This definition tries to explain that part of individual and social action involved in the attainment of the material needs of world being.
- Lord Leonel Robbins:
He had the most acceptable definition of Economics. He defined economics as the social science which studies human behavior as a relationship between ends and scares means which have alternative uses.
This definition of Leonel Robbins is concerned with the way mankind applies his knowledge, skills abilities and efforts to the gift of nature to satisfy some of his endless material wants.
Therefore, the most acceptable definition of Lord Leonel Robbins points out the economic central problem of scarcity and choice that is, it brings out the facts that our wants are many(unlimited) but the means to satisfy them are limited.
Some key words or terms in the definition of Economics
Def: Economics is the social science that study human behavior as a relationship between Ends and scares means which have alternative uses.
- Ends: it refers to human wants. Wants are the desire or needs. The things we intend to have which give us maximum satisfaction egg food, cloths, shelter etc.
- Scarcity: it means limited in supply relative to people’s demand
- Means: it refers to the resources used to produce our wants e.g. Land, labour and capital and Enterprise. Means could also be referred to as factors of production, Economic resources or The goods and services produced are called outputs.
- Alternative uses: This means that any human wants have more than one uses e.g. flour, can be used for baking of bread, cake, frying of pancake etc.
- Social science: it is a Systematic study of the behaviors of individuals and society. As a social science, Economics is limited to the material aspect of man.
Economic is considered as a social science because it deals with experiment on human behavior, however economics is not a pure science subject like chemistry, physics, biology because
- It deals with human behavior which is complex and difficult to predict
- Its experiment is not carried out in the laboratory.
- Economic event is continually changing making it difficult to isolate one happening from the another.
However, economics persuade the analysis by assuming that all things being equal (Ceteris paribus)