SUBJECT: Basic Microeconomics

Activity 1A. RESEARCH AND COPY AT LEAST 4 DEFINITIONS OF ECONOMICS WITH THEIR
CORRESPONDING AUTHOR/WEBSITE ADDRESS. EXPLAIN EACH DEFINITION ACCORDING TO WHAT YOU
CAN UNDERSTAND.

Definitions:

1. According to Adam Smith Economics is a subject which studies the nature of wealth and laws
which governs its production, consumption, distribution and exchange.

2. According to Prof. Dr. Alfred Marshal Economics is a study of man's action in the ordinary
business of life it inquires how he gets his income and how he uses it. It examines that part of
individual and social actions which is mostly closely connected with the attainment and with the
use of material requisites of well-being. Thus economics is on one side a study of wealth and on
the other and important side a part of the study of man.

3. According to Prof. Lionel Robbins Economics is science which studies human behavior as a
relationship between ends and scarce means which have alternative uses.

4. Economics is all about the choices we make concerning the use of scarce resources that have
alternative uses, with the aim of satisfying our most pressing infinite wants and distribute it
among ourselves.

Explanations:

1. In Adams Smith's definition of Economics, he focuses on how wealth gets created in a country.
And that humans' natural tendency toward self-interest results in prosperity. Smith argued that
by giving everyone freedom to produce and exchange goods as they pleased, known as free
trade, and opening the markets up to domestic and foreign competition, people's natural self-
interest would promote greater prosperity than stringent government regulations. If all
production could be specialized, workers could produce more of everything. Because we
humans naturally trade with one another, those involved in making one product will exchange it
for the goods produced by other workers. Thus great plenty diffuses itself through all the
different ranks of the society. In this case increasing production and the wealth of a nation is
presented.

2. According to the definition of economics by Alfred Marshall, we see that he emphasizes the
below points. First is the study of an ordinary man who lives in a society whose subject matter is
a particular aspect of human behavior like, for example, earning and spending of incomes for
the specific material needs of human beings. Second is, economics is not a useless study of
wealth, for it does not regard the be-all and end-all of economic activities as wealth. Wealth is
not of primary importance. It is earned only for promoting human welfare economics to analyze
 the causes of the material prosperity of individuals and nations. The third is economics is a social
science that does not study the behavior of isolated individuals but the actions of persons living
in society. When people live together, they cooperate to work at firms, factories, shops, and
offices to produce and exchange goods or services. The problems with these activities are
studied in economics. Lastly, it is the study of material welfare. It is clear from this definition
that it is a materialistic aspect and ignores non-material elements. Alfred Marshall stressed that
the man’s behavior and activities to produce and consume a maximum number of goods and
services are the main objects of study wealth is not an end or final aim. Still, only a means to
achieve a higher objective of welfare.

3. Given the definition provided by Prof. Lionel Robbins, we can understand that economics is a
social science because it revolves around the individual and society. It studies how society
produces goods services and how the individual consumes those goods and services. This is
known as our social science, which studies human behavior that shows when do people wants
their needs. There are people, and people need resources to fulfill and satisfy their desires.
These resources cannot be infinite, but the desires can be, so they have to decide how to use
their scarce resources. And these resources which society has can be used in various ways that is
why it has an alternative use. For example, we got our allowance per month, and this allowance
is then our scarce means, the limited resource that when we overuse or spend it all at once say
we want to buy dress and shoes then viola it has gone. But say there is a momentous occasion
you must attend and you need to present a gift and buying the dress and shoes you want in the
first place will make your allowance run short. In these cases, we have to prioritize what is more
important to buy and buy the remaining things next.

4. From this definition, we can say that economics, at its core, is all about our actions. It’s about
our choices and actions as individuals and our wants, needs, and abilities. It is also about how
we interact with others to benefit and build a society around us. Say, for example, if a person is
stranded on a deserted island, the top priority is obvious, survival. He needs water, food, and
shelter. Some of the resources of this person are also obvious. There may be a coconut or other
fruits that can be foraged for food; just as important, however, is his time. He must economize
his time, dedicating it to best ensure his survival. Does he focus on finding water, or does he
save his few hours building a shelter? Right away, he is forced to make decisions about trade-
offs. He may decide to survive three days without water and focus instead on creating a haven
for the night. Another person in this situation might choose differently, but his judgment guides
his choices. Notice that his decision is nothing to do with money; there are simply the choices he
makes facing an uncertain future or situation. Luckily our economic decisions mostly are not a
matter of life and death but fundamental decisions we all make every day. The decisions that
the individual must weigh and are valid for every person anywhere have costs and benefits.
Economics does not tell us what we all should do. Instead, economics is all about understanding
the worth of our decisions. It is about understanding how we can create value by satisfying our
wants and the wants of others and how we as an individual all play a role in contributing to the
rise or fall of human civilization.