Question

describe the subject matter of economic
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Answer 1

Answer:

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Explanation:

The subject matter of economics is concerned with wants, efforts and satisfaction. In other words, it deals with decisions regarding the commodities and services to be produced in the economy, how to produce them most economically and how to provide for the growth of the economy.

Answer 2

Answer:

Subject matter of economics

Economics has subject mater of its own . Economics tells how a man utilises his

limited resources for the satisfaction of unlimited wants. Man has limited amount of time

and money. He should spend time and money in such away that he derives maximum

satisfaction. A man wants food, clothing and shelter. To get these things he must have

money. For getting money he must make an effort. Effort leads to satisfaction. Thus,

wants- efforts- satisfaction sums up the subject mater of economics initially in a primitive

society where the connection between wants efforts and satisfaction is direct .

Divisions of Economics

The subject matter of economics can be explained under two approaches viz.,

Traditional approach and Modern approach.

Traditional Approach

It considered economics as a science of wealth and divided it into four divisions

viz., consumption, production, exchange and distribution

1. Consumption: It means the use of wealth to satisfy human wants. It also means

the destruction of utility or use of commodities and services to satisfy human

wants.

2. Production: It is defined as the creation of utility. It involves the processes and

methods employed in transformation of tangible inputs (raw materials, semi

finished goods, or subassemblies) and intangible inputs (ideas, information, know

-how) into goods or services.

3. Exchange: It implies the transfer of goods from one person to the other. It may

occur among individuals or countries. The exchange of goods leads to an increase

in the welfare of the individuals through creation of higher utilities for goods and

services.

4. Distribution: Distribution refers to sharing of wealth that is produced among the

different factors of production .It refers to personal distribution and functional

distribution of income. Personal distribution relates to the forces governing the

distribution of income and wealth among the various individuals of a country.

Functional distribution or factor share distribution explains the share of total

income received by each factor of production viz., land, labour, capital and Organisation.