Basic Concepts in Economics: Nature, Meaning & Definitions: 18 flashcards
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1. What is science?
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A systematic body of knowledge.
2. What are the two main types of sciences?
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Natural sciences and social sciences.
3. Why are natural sciences called exact sciences?
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Because of their empirical approach — their laws are universally acceptable and testable in a laboratory under controlled conditions.
4. Give three examples of natural sciences.
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Mathematics, Physics, Chemistry.
5. Why is social science called abstract or behavioural science?
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Because it studies some aspect of human behaviour, which cannot be empirically tested or studied in a laboratory.
6. Which aspect of human behaviour does Psychology study?
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The 'mental' aspect.
7. Which aspect of human behaviour does Sociology study?
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The 'social' aspect of man as a member of society.
8. What kind of laws does social science produce?
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Statements of general human tendencies, not universal laws.
9. From which Greek word does 'Economics' originate, and what does it mean?
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'Oikonomia', which means management of the household.
10. Who called Economics the 'Queen of Social Sciences'?
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Paul Samuelson.
11. What central problem does Economics deal with?
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How human beings satisfy unlimited wants with limited means.
12. Who authored the Arthashastra, and by what other names is he known?
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Kautilya, also known as Chanakya or Vishnugupta.
13. What do 'Artha' and 'Shastra' mean?
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Artha means 'Wealth' and Shastra means 'Science'.
14. What is the Arthashastra essentially a treatise on?
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Political Economy in its broadest sense — the science of acquiring and managing wealth.
15. Who is regarded as the 'Father of Economics'?
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Adam Smith, a classical economist.
16. Which definition of Economics did Adam Smith give?
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The wealth-oriented definition.
17. State Kautilya's four key views.
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1) Crucial role of the state/government; 2) creation of wealth as means to state welfare; 3) need for efficient administrative machinery; 4) compilation of political ideas into Arthashastra.
18. Why can't economic laws be universal?
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Because human behaviour cannot be empirically tested or studied in a laboratory, so economic laws are only statements of general human tendencies.
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