Economics Intro: 18 flashcards

Derived from 'Arthashastra': Artha means wealth, purpose, benefit; Shastra means science. Economics is the science of wealth and human welfare.

Derived from the Greek word 'Oikonomos': Oikos means household, Nomos means management. Economics means management of household resources.

1. Dharma (Righteousness), 2. Artha (Wealth), 3. Kama (Desires), 4. Moksha (Liberation).

Kautilya authored the Arthashastra. He emphasized that wealth creation is necessary for individuals and society, and economics explains the creation and proper use of wealth.

Aristotle.

Economics is the study of the nature and causes of the wealth of nations. (1776)

Economics studies the ordinary business of life. (1890) Focus on human welfare and material well-being.

Economics studies the relationship between unlimited wants and scarce resources with alternative uses. (1931) Focus on choice and allocation of resources.

Economics studies how society allocates scarce resources over time. (1947) Focus on production, distribution, growth, and welfare.

Economics is a social science that studies human behaviour related to economic activities. It is a positive science (studies 'what is') and uses scientific methods.

Economic activities are performed to earn income or economic benefits. They involve exchange and cost-benefit analysis. Examples: farming, teaching, working in a factory, running a business, eating at a restaurant (paid service).

Non-economic activities are performed without the intention of earning money, done out of love, affection, charity, or social service. Examples: helping parents, charity, voluntary service, donating blood.

Economic activities are done for income and involve exchange, while non-economic activities are done without income and do not involve exchange for money. Economic activities aim for profit, non-economic aim for service or love.

Microeconomics studies individual economic units such as consumers, firms, price determination, demand and supply, and wage determination. It focuses on small parts of the economy and uses marginal analysis.

Macroeconomics studies the economy as a whole. Topics include national income, inflation, unemployment, poverty, economic growth, and population. It focuses on aggregate economy and government policies.

As price decreases, demand increases. For example, when price falls from ₹20 to ₹5, demand rises from 20 to 80 units.

1. Descriptive Method (written explanation), 2. Tables, 3. Graphs/Diagrams, 4. (Implied) Statistical methods.

1. Use reliable sources of data (e.g., Economic Survey of India, CSO, NSS, World Development Report). 2. Correct selection of variables (independent on X-axis, dependent on Y-axis). 3. Use an appropriate scale (simple, proportional, with equal spacing).