Explain various divisions of Economics.
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1. Consumption
Since the existence of human wants is the starting point of economic activity, we study consumption first. In this, we study about the consumption of wealth for the satisfaction of human wants. In this division, we study about the characteristics of human wants, the behavior of the consumer, diminishing utility and consumer’s surplus, etc.
2. Production
This division covers the factors of production viz., Land, Labor, Capital and Organization. The laws governing production, mobility of factors and the role of factors are studied in this division.
3. Exchange
In this division, we study about trade and commerce, money and banking. Consumption will be possible only if the produced commodity is placed in the hands of the consumer. For this, trade and commerce are essential for the movement of goods and servicesfrom one place to another.
4. Distribution
Production is the result of the cooperation of factors of production. Since a commodity is produced with the efforts of land, labor, capital and organization, the produced wealth has to be distributed among the cooperating factors. The reward for factors of production is studied in this division under rent, wages, interest and profit. Distribution studies about the pricing of factors of production.
5. Public Finance
This division studies about the income, expenditure and financial administration of the State. This tells about taxation and expenditure, budgeting and financial administration. Public Finance has been separated from Economics and is treated as an independent branch.
Since the existence of human wants is the starting point of economic activity, we study consumption first. In this, we study about the consumption of wealth for the satisfaction of human wants. In this division, we study about the characteristics of human wants, the behavior of the consumer, diminishing utility and consumer’s surplus, etc.
2. Production
This division covers the factors of production viz., Land, Labor, Capital and Organization. The laws governing production, mobility of factors and the role of factors are studied in this division.
3. Exchange
In this division, we study about trade and commerce, money and banking. Consumption will be possible only if the produced commodity is placed in the hands of the consumer. For this, trade and commerce are essential for the movement of goods and servicesfrom one place to another.
4. Distribution
Production is the result of the cooperation of factors of production. Since a commodity is produced with the efforts of land, labor, capital and organization, the produced wealth has to be distributed among the cooperating factors. The reward for factors of production is studied in this division under rent, wages, interest and profit. Distribution studies about the pricing of factors of production.
5. Public Finance
This division studies about the income, expenditure and financial administration of the State. This tells about taxation and expenditure, budgeting and financial administration. Public Finance has been separated from Economics and is treated as an independent branch.
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Answer:
Economics is a social science that studies the ways individuals and groups allocate resources, including money, buildings, land, time, tools and know-how. Its two major divisions are microeconomics, which starts with individual decision-making, and macroeconomics, which focuses on the overall result
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