3. Modern view Lionel Robbins- “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses”
4. Neo-classical view Alfred Marshall- Economics is a study of mankind in the ordinary business of life”
5. Scope: Economics as a science – “A science is a systematized body of knowledge ascertainable by observation and experimentation. It is a body of generalizations, principles, theories or laws which traces out a casual relationships between cause and effect.”
6. Economics as an art According to J.N Keynes- “An art is a system of rules for the attainment of given ends.”
7. Economics is both science as well as arts- According to Samuelson- “Economics is the oldest of arts, and newest of sciences-indeed the queen of all the social sciences.” Economics is both positive and normative science- Positive because it is concerned with “what is” and normative because it is also concerned with “what ought to be”
8. Some basic concepts- Goods- In economics all things that have value and satisfy human wants are called goods. Types- 1.Economic and Non-economic goods 2.Consumers and Producers goods 3.intermediate and final goods
9. Utility Utility is the want satisfying power of a commodity is called utility. Types of utility- 1.Form utility 2.Place utility 3.Time utility 4.Service utility 5.Possession utility 6.Knowledge utilty 7.Natural utility
10. Characteristics of utilty- 1.Utilty and usefulness 2.Utilty and satisfaction 3.Utility and pleasure 4.Utility is subjective 5.Utility is relative 6.Utilty is abstract
12. Uses of economic theory in management 1.To explain economic phenomena 2.To predict economic events 3.To judge the performance of the economy 4. To formulate and understand economic policies 5.To evaluate economic policies
13. Limitations of economic theory 1.Accurate data is not avaiable 2.Accurate predictions not available 3.Human behaviour not rational 4.Unrealistic assumptions
14. Assumptions of economics 1.Psychological and behavioural assumptions 2.Institutional assumptions 3.Structural assumptions 4.Ceteris paribus assumptions
