Who gave the scarcity definition of economics?
- AOption (a)
Adam Smith
- BOption (b)
P.A. Samuelson
- COption (c)
Alfred Marshall
- DOption (d)
Lionel Robbins
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Correct answer
Lionel Robbins
Why this answer is correct
The correct answer is Lionel Robbins.
Key Points
- Lionel Robbins, a renowned British economist, gave the scarcity definition of economics in his famous book, An Essay on the Nature and Significance of Economic Science, published in 1932.
- According to Robbins, economics is the science which studies human behavior as a relationship between ends (wants) and scarce means which have alternative uses.
- He emphasized that resources are limited, and human wants are unlimited, creating a condition of scarcity.
- The scarcity definition highlights the concept of choice and opportunity cost, where individuals must prioritize their needs and decide how to allocate scarce resources efficiently.
- This definition shifted economics from a study of wealth (as proposed by Adam Smith) to a study of human behavior and decision-making under conditions of scarcity.
Additional Information
- Adam Smith:
- Known as the Father of Economics, Adam Smith defined economics as a study of the nature and causes of the wealth of nations.
- His definition focused on the production and accumulation of wealth and was presented in his book, The Wealth of Nations, published in 1776.
- His approach is referred to as the Wealth Definition of Economics.
- P.A. Samuelson:
- Samuelson provided the growth-oriented definition of economics, emphasizing the dynamic aspects of economic growth and development.
- He defined economics as the study of how societies use scarce resources to produce valuable commodities and distribute them among different people.
- He is known for his work in modern economic theory.
- Alfred Marshall:
- Marshall defined economics as the study of human welfare and material well-being, focusing on how people earn income and use it to satisfy their wants.
- His definition is referred to as the Welfare Definition of Economics and was presented in his book, Principles of Economics, published in 1890.
- Marshall's approach emphasized the importance of studying economics in relation to improving human welfare.
- Concept of Scarcity:
- Scarcity occurs when resources are limited and cannot satisfy all human wants.
- This fundamental concept forms the basis of economic problems, such as allocation, production, and distribution.
- Scarcity forces individuals and societies to make choices and prioritize resource utilization effectively.
Important Points
- Key Features of Robbins' Definition:
- Robbins viewed economics as a positive science (descriptive and neutral) rather than a normative one.
- It focuses on the study of individual behavior in making choices based on limited resources.
- Introduces the concept of opportunity cost, where choosing one alternative means forgoing others.
- Emphasizes the universality of economic problems, applicable to all societies irrespective of their stage of development.
- Criticism of Robbins' Definition:
- Critics argue that it overlooks the social and welfare aspects of economics emphasized by Marshall.
- It reduces economics to a study of scarcity and neglects growth and development.
- Robbins' approach is sometimes seen as too abstract and lacking practical application in real-world economic problems.