Definition of economics and Consumer Behavior - INDJOBSGROUP

Saturday, September 14, 2019

Definition of economics and Consumer Behavior

Definition of economics and Consumer Behavior

 CONSUMER'S BEHAVIOUR  or the scope of Economics  is a social science.  Like all social sciences, it deals with the study of human activities in society.  But all human activities are not economics.  Various social sciences like history.  politics etc.  deal with different aspects of human activities.  Therefore we have to know clearly what economics is about.  To know this we have to determine the aim of economic studies according to Marshall, "The aim of economics is to study physical facts and human activities related to production, consumption, exchange and distribution of wealth." Further it finds out the ways by which  the efficiency in production can be increased.  It also investigates causes of low productivity, depression, unemployment and poverty.  Economics also suggests the steps which can be taken for the removal of these evils from the economic system.  .  .  Thus, the scope of economics tells us what it is about.  But views of economists differ as to what exactly it is.  To know precisely about what economics is, we must discuss about the definition of economics.

Definition of Economics  As stated above, the definition of economics is a controversial topic.  Various definitions have emerged from the thinking of many eminent economists.  The word economics seems to have come from two Greek terms - Oikos and Nemio, which means household management.  Just as the family economises contetoget most |  our of it, the society also has to economize its resources in the reduction process to meet most of the needs of the people.  This is ", economics was regarded as a study of household management. Adam Smith believed that wealth was useful for the society.  .  .  Therefore economics was defined as a study of wealth.  The indusial revolution which appeared in Europe, changed mans soon environment to great extent.  Thereafter need was felt to rederies economics to accommodate these changes.  Now there are a numb.  of definitions of economics.  These definitions are discussed below.  toil lustrate how different economists have viewed economics from different angles.  .  made I.  Wealth Definition - The classical economists defined economics as' the science of wealth, according to Adam Smith  father of modern economics, it is an inquiry into the nature and Focuses of wealth.  J  B.  Say, a follower of Adam Smith also looked upon economics as the study of the laws that govern wealth.  hilled defining economies as a science of wealth, the classical economists or  interpreted "wealth" in a very narrow sense.  Only material things 109 were believed as wealth which meant riches or abundance of money, was believed that the self interest of individuals guided them in all their economic activities and led to the acquisition of more and more of wealth.  This ultimately resulted in the increase of national wealth DR The science of economics was thus believed to deal with the ways, and means of increasing wealth of the state.  HAL The wealth definition of economics was however vigorous m criticised by latter writers on several grounds: |  Firstly, the concept of wealth, as understood by the classical, was too narrow.  The scope of economics was restricted only to the  production and consumption of material goods.  Non material wealth W including services of all kinds, remained outside the scope al Go economics.  Since human activities concerned production and (Nconsumption of both material and non - material wealth, this definition | of economics was viewed as partial. Secondly, the classical writers believed that man is always) selfish and the acquisition of material wealth is the sole aim of his IBut  philosophers like Carlyle and Ruskin did not agree with in this view.  They opined that man is not always guided by selfish motives.  Various other motives also guide man to satisfy his wants.  Therefore economics, as defined by the classical was criticized by them as a 'dismal science' and 'gospel of mammon'.  , Finally, the classical definition laid emphasis on the production and consumption of wealth alone.  That wealth was only a means to an end and the end was social welfare was completely forgotten by them.  Though wealth was needed by man for the satisfaction of his wants, this definition gave emphasis on wealth alone and completely neglected 'man' for whom wealth was meant.  2 .  Welfare Definition - As the wealth definition led to controversies

Anew definition of economics was given by Alfred Marshall, an English economist According to him.  "Economics is a study of mankind in the ordinary business of life: it examines that part of individual and social action which is most closely connected with the attainment and with the use of material requisites of well being. Thus on the one side, it  is a study of wealth and on the other and more important side, a part of the study of man. ", this definition has given more emphasis on human welfare or material aspects of human well being rather than on wealth.  Therefore it is popularly known as the welfare definition of economics.  The salient features of this definition are discussed below.  Firstly.  In Marshall's definition, wealth is not considered as an end in itself, but as a means to attain an end, the end being human welfare.  Thus, economics studies wealth in relation to man.  Therefore in this definition the primary importance is given to man and not to wealth.  Secondly, economics studies material welfare of man and not his general welfare.  General welfare is an abstract concept and can be hardly measured.  On the other hand, material welfare  concrete concept which can be measured with the yardstick of money.  It is material wealth which satisfies human wants and promotes wellbeing.  Thus economics only concerns material wealth. Finally, economics is a social science which studies the activities of an ordinary man living in human society.   A man living in isolation outside society may be interested to acquire wealth for his selfish ends.  But his activities do not constitute the subject matter of economics according to Marshall.  Thus, Marshall has defined economics in terms of both wealth and welfare.  Though wealth is not the primary concern of economics, it is excluded in its   it is needed for the attainment of human welfare.  The welfare definition of Marshall has also been criticized by modern writers on the following grounds.  .  .  Marshall has included only material requisites of wellbeing within the purview of economics.  Thus, services of all kinds, which   - material in nature, but lead to the attainment of human welfare.  have been excluded from its study.  This makes the welfare definition narrow and unsatisfactory.  (ii) Only those material goods, which promote human welfare have been brought within the purview of economics by Marshall.  Bu there are many harmful material goods like wine and poison, which do not promote human welfare but satisfy human wants.  Since their production and consumption constitute economic activities and they are demanded in the market, they cannot be excluded from the study of economics.  Why it is wrong to say that - economics studies individual and social action linked with the attainment and use of those material objects which promote human welfare.  |   Welfare is a subjective concept and it varies from person to person. Measurement of welfare is a difficult proposition. Even money is not a perfect measure of human welfare. When two persons pay the same amount of money for a good, it would not be correct to say that  They derive the same welfare from it. Therefore an illusive concept like welfare should not form the basis of any systematic study of a subject.

1 comment:

  1. Economics is essentially a study of the usage of resources under specific constraints, all bound with an audacious hope that the subject under scrutiny is a rational entity which seeks to improve its overall well-being. The aim of studying economics is to understand the decision process behind allocating the currently available resources, the needs always unlimited but resources being limited. Consumer behaviour or consumer buying behaviour are all the aspects that affect consumers' search, selection, and purchase of products. I want to suggest Economics Tuition
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