1
Micro
Economics
(Major Subject)
Notes for quick revision
Unit 1 : Introduction
Notes By - Jayshree Hembram
, 2
W hat is Econom ics?
Economics is the study of how people, businesses, and governments use limited resources to
satisfy unlimited wants.
In short, Economics is the study of how limited resources can satisfy unlimited wants.
Classical Defi nitions of Econom ics
1. Adam Smith (Wealth-Oriented Definition)
● Adam Smith, known as the Father of Economics, defined economics as the study of the
nature and causes of the wealth of nations.
● His focus was on how a nation can produce and accumulate more wealth through trade,
production, and division of labour.
● Limitation: Too narrow, as it treated wealth as the main object of economics and ignored
human welfare.
2. Alfred Marshall (Welfare-Oriented Definition)
● Defined economics as the study of mankind in the ordinary business of life.
● Economics is not just about wealth but also about how people earn and spend their
income to improve material welfare.
● Limitation: Focused only on material welfare, ignored non-material aspects like
happiness and social values.
3. Lionel Robbins (Scarcity-Oriented Definition)
● Defined economics as the science of human behavior as a relationship between
unlimited wants and scarce means which have alternative uses.
Notes By - Jayshree Hembram
● Highlighted three main ideas.
2
Micro
Economics
(Major Subject)
Notes for quick revision
Unit 1 : Introduction
Notes By - Jayshree Hembram
, 2
W hat is Econom ics?
Economics is the study of how people, businesses, and governments use limited resources to
satisfy unlimited wants.
In short, Economics is the study of how limited resources can satisfy unlimited wants.
Classical Defi nitions of Econom ics
1. Adam Smith (Wealth-Oriented Definition)
● Adam Smith, known as the Father of Economics, defined economics as the study of the
nature and causes of the wealth of nations.
● His focus was on how a nation can produce and accumulate more wealth through trade,
production, and division of labour.
● Limitation: Too narrow, as it treated wealth as the main object of economics and ignored
human welfare.
2. Alfred Marshall (Welfare-Oriented Definition)
● Defined economics as the study of mankind in the ordinary business of life.
● Economics is not just about wealth but also about how people earn and spend their
income to improve material welfare.
● Limitation: Focused only on material welfare, ignored non-material aspects like
happiness and social values.
3. Lionel Robbins (Scarcity-Oriented Definition)
● Defined economics as the science of human behavior as a relationship between
unlimited wants and scarce means which have alternative uses.
Notes By - Jayshree Hembram
● Highlighted three main ideas.
2
