Agricultural Economics

Definitions of economics• The word ‘Economics’ originates from the Greek word ‘Oikonomikos’

which can be divided into two parts: (a) ‘Oikos’, which means ‘Home’, and (b) ‘Nomos’, which means ‘Management’.• Thus, Economics means ‘Home Management’. The head of a family

faces the problem of managing the unlimited wants of the family members within the limited income of the family.• Economics is defined as the study of choice under conditions of

scarcity

Scarcity:• Situation in which the amount of something available is insufficient to satisfy the desire for it

• The major problem for society is a scarcity of resources

For example:Scarcity of Labor: human beings spend producing goods and servicesScarcity of Capital: Something that is used to make other things that we valueScarcity of land: Physical space on which production occursScarcity of entrepreneurship: Ability and willingness to combine the other resources into a productive enterprise

Definitions of economics contd…• According to British socialist Barbara Wotton(1897-1988), “ whenever

six economist are gathered together there will be seven opinions.”• According to Canadian economist Jacob Viner(1892-1970), “

Economics is what economist do.”• The definition of the economics can be classified into three major

groups1. Wealth definition of economics (Classical definition)2. Welfare definition of economics (Neo classical definition)3. Scarcity definition of economics (Modern definition)

Definitions of economics contd…

Wealth definition of economics

• It is also called classical definition of economics.• This definition is given by Adam

smith(father of economics).• According to him economics

deals with wealth alone so it is called wealth definition of economics.• According to Adam smith wealth

is only material goods (tangible goods).

Definitions of economics contd…

Different branches of Economics• Microeconomics

Micro comes from Greek word mikros, meaning “small”It is the study of behavior of individual households, firms and governmentsIt focuses on individual parts of an economy, rather than the whole

• MacroeconomicsStudy of the economy as a wholeIt focuses on big picture and ignores fine details