Economics is a popular, useful and significant social study. It studies economic activities of a man. Economic activities are those activities, which are concerned with the efficient use of such scarce means as can satisfy the wants of man. Human wants are unlimited, in the sense, that as soon as one want is satisfied another crops up. Most of the means of satisfying these wants are limited, because their supply is less than demand. These means have alternative uses; there emerge a problem of choice. Everybody has to make a choice regard to the use of his scarce means so that he may get maximum satisfaction from them. In short, Economics is the study of those activities of human beings, which are concerned, with the satisfaction of unlimited wants by utilizing limited resources.

Economics is not concerned with lifeless matter, as is the case with natural science like physics and chemistry.

Evolution of Economics:

The term ‘Economics’ is derived from two words of Greek language, namely, Oikos (Household) and Nemein (to manage) meaning thereby Household management. Earlier ii used to be called as political economy. As a scholarly subject, the study of economics is barley 200 years old. The form of economics studies today is shaped by ADAM SMITH, the founder of modern Economics. His famous book, ” an enquiry into nature and causes of wealth of nations:” was published in 1776.

In 1933, Prof. Ragnar Frisch, the famous economist of Oslo University Norway, divided the study of economics into two parts-

1. Microeconomics also known as Price Theory

2. Macroeconomics also known as Theory of Income and Employment.

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Definition of Economics:

It is difficult to give an accurate definition of economics. A test of good definition is that it delimits boundaries of the subject clearly and correctly. In the words of Seligman, ” Economics has suffered more than any other discipline from the malaise of polemics about definitions”. In this respect Barbara Wootton’s remarks, ” whenever six economists gather there are seven opinions”, appears to be quite pertinent.

There are two distinct approaches of the economists in respect of the definition of economics

1. No need of defining economics

According to some modern economists the subject of economics has been growing continuously. It will therefore be improper to limit its growth to the confines of a given definition.

2. Necessity of defining economics

Most of the economists agree with a view that defining economics is a must as it becomes possible to study of a subject, knowledge of it scientifically and properly. Nobel laureate Prof. Samuelson observes, “Beginners often wants a short definition of economics and in response to this demand there is no shortage of supply”.