Meaning and Definition of Economics - Questions & Answers

1. "Economics is the science of wealth". Who gave this definition?
(a) Marshall   (b) Robbins   (c) Adam Smith   (d) JK Mehta
Answer: (c) Adam Smith

2. "An Enquiry into the Nature and causes of Wealth of Nations" is the book by which economist?
(a) Adam Smith   (b) Marshall   (c) Robbins   (d) None of these
Answer: (a) Adam Smith

3. Who has given the scarcity definition of economics?
(a) Adam Smith   (b) Marshall   (c) Robbins   (d) Pigou
Answer: (c) Robbins

4. What is true about the scarcity definition?
(a) Considers material welfare   (b) Study of wealth   (c) Economic problem   (d) Study of material goods
Answer: (c) Economic problem

5. Identify the main feature of welfare definition of economics from the following options.
(a) Study of wealth   (b) Study of material goods only   (c) Study of ordinary business of life   (d) Scarce resources
Answer: (c) Study of ordinary business of life

6. Who is known as the father of modern economics?
(a) Adam Smith   (b) J.M. Keynes   (c) Alfred Marshal   (d) Robbins
Answer: (a) Adam Smith

7. Identify the feature of economic activity
(a) Economic gain   (b) Can't be measured in money terms   (c) Performed out of love and affection   (d) Results in satisfaction and happiness
Answer: (a) Economic gain

8. Non-economic activities are undertaken
(a) Out of love and affection   (b) Performed due to social reason   (c) Both (a) and (b)   (d) Neither (a) nor (b)
Answer: (c) Both (a) and (b)

9. Which of the following is not an economic activity?
(a) Father teaching his son at home   (b) Domestic work by a housewife   (c) Washing of father's car by son   (d) All of these
Answer: (d) All of these

10. What is the name of the book written by Alfred Marshall?
(a) Wealth of Nation   (b) Political Economy   (c) Principles of Economics   (d) Welfare Economics
Answer: (c) Principles of Economics

11. What is known as the study of individual units?
(a) Macroeconomics   (b) Microeconomics   (c) Income theory   (d) Development economics
Answer: (b) Microeconomics

12. Study of aggregates is known as
(a) Macroeconomics   (b) Microeconomics   (c) Price theory   (d) Factor price determination
Answer: (a) Macroeconomics

13. Which of the following options is a micro-economic study?
(a) National Income   (b) Aggregate demand for goods and services   (c) Agricultural production   (d) Household income
Answer: (d) Household income

14. Which of the following options is not a macro-economic study?
(a) Output of a firm   (b) Household income   (c) Market demand of apples   (d) All of these
Answer: (d) All of these

15. Mr Arvind wants to study the national income. Which branch of economics will he have to study?
(a) Microeconomics   (b) Factor price determination   (c) Macroeconomics   (d) Price theory
Answer: (c) Macroeconomics

16. Which of the following is NOT an economic activity?
(a) To worship   (b) To help the poor   (c) Donating blood to an injured person   (d) All of these
Answer: (d) All of these

17. Identify economic activity from the following :
(a) A child playing with toys   (b) A woman cooking for her family   (c) Poultry farming   (d) None of these
Answer: (c) Poultry farming

18. A homemaker cooking for her family contributes valuable services, but these are generally considered non-economic because.
(a) Cooking isn't a skilled job
(b) There's no direct monetary reward or market exchange.
(c) Food isn't a final product.
(d) It's a task performed out of love, not profit
Answer: (b) There's no direct monetary reward or market exchange.

19. A baker sells bread in their shop daily for profit. One evening, the baker bakes extra bread and gives it to a needy family for free. How do these two actions differ?
(a) First is employment, second is profession.
(b) First is economic, second is non-economic.
(c) Both are economic activities.
(d) Both are non-economic activities.
Answer: (b) First is economic, second is non-economic.

20. A doctor treats her own child at home for a fever. This action is primarily:
(a) An economic activity, as it involves health services.
(b) A non-economic activity, driven by care and sentiment.
(c) A professional activity, regardless of the setting.
(d) Part of the tertiary sector's contribution.
Answer: (b) A non-economic activity, driven by care and sentiment.

21. Which statement best describes the fundamental difference between economic and non-economic activities?
(a) Economic activities create wealth; non-economic ones create happiness.
(b) Economic activities aim for monetary gain or livelihood; non-economic ones fulfill personal/social needs.
(c) economic activities involve goods; non-economic activities involve services.
(d) Economic activities are public; non-economic activities are private.
Answer: (b) Economic activities aim for monetary gain or livelihood; non-economic ones fulfill personal/social needs.

1. Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives:
Assertion (A): According to Adam Smith, economics is a study of wealth.
Reason (R): According to him, economics is a subject that tells us how to make a nation wealthy.
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Answer: (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

2. Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives:
Assertion (A): A housewife cooking food for the family is an economic activity.
Reason (R): Donating blood to an injured is not an economic activity.
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Answer: (d) Assertion (A) is false but Reason (R) is true.

3. Identify the correct sequence of alternatives give in Column II by matching them with respective terms in Column I.
Column I
(a) Father teaching to his son
(b) Cultivation by farmer
(c) Principles of Economics
(d) An Enquiry into the nature & causes of wealth of Nations.
Column II
(i) Economic activity
(ii) 1776
(iii) 1890
(iv) Non – Economic activity
Choose the correct alternative:
(a) (iv) (ii), (iii), (i)
(b) (iii), (iv), (i), (ii)
(c) (iv) (i), (iii), (ii)
(d) (iv), (iii), (i), (ii)
Answer: (c) (iv) (i), (iii), (ii)

4. Choose the correct pair of statements given in columns I and II below:
Column I
(a) Science of wealth
(b) Science Material Welfare
(c) Science of Scarcity
(d) Science of Growth
Column II
(i) Marshall
(ii) Adam Smith
(iii) Robbins
(iv) Keynes
Choose the correct alternative:
(a) A–(i)
(b) B–(ii)
(c) C–(iii)
(d) D–(iv)
Answer: (c) C–(iii)

1. What do you mean by economic activities?
Answer: Economic activity refers to the activities of earning and spending money. It is also called the study of human activities in relation to wealth.

2. Classify the following activities into economic and non-economic activities :
(a) Selling of newspapers by a student in the morning
(b) Washing own car
(c) Dance performance by a student
(d) A doctor treating patients in a hospital
(e) Pocket allowance by father to his son
(f) Public speech by Narendra Modi
(g) Playing cricket by Rohit Sharma for India
Answer:
Economic Activities: (a), (d), (g)
Non-economic Activities: (b), (c), (e), (f)

3. Who is known as the father of economics? Give the name of his famous book.
Answer: Adam Smith is known as the father of economics. The name of his famous book is 'An Inquiry into the Nature and Causes of the Wealth of Nations' (published in 1776).

4. Give Adam Smith's definition of economics.
Answer: According to Adam Smith, "Economics is a science of wealth."

5. What is welfare definition of economics?
Answer: According to Marshall, "Economics is a study of mankind in ordinary business of life, it deals with all human activities connected with acquisition and use of wealth."

6. Give Robbins' definition of economics.
Answer: According to Robbins, "Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses."

7. Give growth definition of economics.
Answer: According to Samuelson, "Economics is the study of how man and society choose, with or without the use of money, to employ scarce productive resources, which could have alternative uses, to produce various commodities over time and distribute them for consumption now and in the future among various people and groups of society."

1. Distinguish between economic and non-economic activities. Give suitable examples.
Answer: Economic activities are those activities that are performed for monetary gain (e.g., A doctor treating patients in a hospital, a teacher teaching in a school). They are measured in money terms and generate income. Non-economic activities are those activities that are carried out solely for the sake of love, affection, sympathy, and patriotism (e.g., A mother caring for her child, a teacher teaching his own son at home). They lack money measurement and do not generate income.

2. Critically discuss wealth definition of economics as given by Adam Smith.
Answer: Adam Smith defined economics as "a science which inquires into the nature and cause of wealth of nations." He emphasized the production and growth of wealth as the subject matter of economics. The main features are: (i) Economics is a study of wealth. (ii) Economics studies only material goods. (iii) Economics studies only about an economic man.

3. What are the main features of Marshall's definition of economics?
Answer: The main features of Marshall's definition are: (i) Economics is a study of economic activities of mankind. (ii) Economics is a study of human welfare of material type. (iii) It lays more importance on human welfare in comparison to wealth.

4. Critically examine Robbins' definition of economics.
Answer: Robbins' defined economics as a science of choice arising out of scarcity of resources. The main features are: (i) Human wants are unlimited. (ii) Resources required to satisfy these unlimited wants are limited in supply. (iii) Means are having alternative uses. Critics argue that scarcity is not the only cause of economic problems, as even abundance (surplus of goods) can cause economic crises, such as the Great Depression of 1930s.

5. Explain Samuelson's definition of economics. OR Explain the growth-oriented definition of economics.
Answer: Samuelson gave a growth-oriented definition. The features of the Growth Definition are: (i) It lays emphasis on the need of choice which arises due to unlimited wants. (ii) It also lays emphasis on the need for the growth of resources. (iii) Economics is concerned with the uses of scarce resources to produce goods over time.

1. What is economics?
Answer: Economics is all about making choices in the presence of scarcity.

2. Explain economic activity.
Answer: Economic activity refers to the activities of earning and spending money. It is also called the study of human activities in relation to wealth.

3. Mention the three economic activities.
Answer: Three economic activities are— (i) Production (ii) Exchange (iii) Consumption.

4. Who is the father of economics? Also write the name of his famous book.
Answer: Adam Smith. His book 'An Enquiry into the Nature and Causes of Wealth of Nations' was published in 1776.

5. Give the definition of goods.
Answer: Anything that can satisfy a human want is called a good in economics.

6. What is wealth in economics?
Answer: All goods whose supply is scarce in relation to its demand and for which money payments are made are known as wealth in economics.

7. Why does an individual need wealth?
Answer: An individual needs wealth because wealth has want satisfying power.

8. What do you mean by scarcity of resources?
Answer: Scarcity of resources means limitation in the supply of a commodity in relation to its demand.

9. Write the definition of economics given by Adam Smith.
Answer: According to Adam Smith, "Economics is a science of wealth."

10. Write the definition of economics given by Marshall.
Answer: According to Marshall, "Economics is a study of mankind in ordinary business of life, it deals with all human activities connected with acquisition and use of wealth."

11. Discuss scarcity definition of economics given by Prof. Robbins.
Answer: According to Robbins, "Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses."

12. Give Samuelson's definition of economics.
Answer: According to Samuelson, "Economics is the study of how man and society choose, with or without the use of money, to employ scarce productive resources, which could have alternative uses, to produce various commodities over time and distribute them for consumption now and in the future among various people and groups of society."

13. What is resource in economics?
Answer: Resource in economics means such type of scarce goods and services which have cost of production and satisfy human wants.

14. Explain the features of Adam Smith's definition of economics.
Answer: Features of Adam Smith's Definition
(i) Economics is a study of wealth.
(ii) Economics studies only material goods.
(iii) Economics studies only about an economic man.

15. Explain the salient features of Marshall's definition of economics.
Answer: Features of Marshall's Definition
(i) Economics is a study of economic activities of mankind.
(ii) Economics is a study of human welfare of material type.
(iii) It lays more importance on human welfare in comparison to wealth.

16. What are the features of Robbins' definition of economics?
Answer: (i) Human wants are unlimited.
(ii) Resources required to satisfy these unlimited wants are limited in supply.
(iii) Means are having alternative uses.

17. Explain the features of growth definition of economics.
Answer: Features of Growth Definition
(i) It lays emphasis on the need of choice which arises due to unlimited wants.
(ii) It also lays emphasis on the need for the growth of resources.
(iii) Economics is concerned with the uses of scarce resources to produce goods over time.

18. Compare and contrast the definitions of economics given by Adam Smith and Marshall.
Answer:
Adam Smith's Definition
1. According to Adam Smith, economics is a science of wealth.
2. Economics is a study of economic man.

Marshall's Definition
1. According to Marshall, economics is a science of material welfare.
2. Economics is a study of real man.

19. Compare and contrast between the definitions of economics given by Marshall and Robins.
Answer:
Marshall's Definition
1. Marshall laid emphasis on material welfare.
2. It is classificatory as it classifies the activities into economic and non-economic.

Robbins' Definition
1. Robbins laid emphasis on human behaviour with the problems of scarcity.
2. Robbins definition is analytical as it considers analytically as to why does economic problem arise.