Eco Notes - Wealth Orientation of economics According to...

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Wealth Orientation of economics According to Adam Smith " Economics was concerned with, An Enquiry into the Nature and Causes of Wealth of Nations." As per definition of Adam Smith a key position was assigned to wealth in the study of Economics . Adam smith wrote a book in 1776 whose title was "Wealth of Nations". In his book he discussed the word 'wealth' through its four aspects: production of wealth, exchange of wealth, distribution of wealth and consumption of wealth. Therefore it can be said according to Adam Smith: "Economics is a science of wealth". Wealth means goods and services transacted with the help of money . First aspect is production of wealth it shows as to how goods and services are produced. Goods and services are produced by the combination of four factors of production i.e. land, labour , capital and organization. Production of wealth means the production of goods and services by combining four factors of production 1) Land: It is the natural resources such as Sea, Minerals , Live Stock and forest. 2). Labor: It is the mental or physical work, which is done for the sake of reward . 3). Capital: It means man made resources which help to produce goods and services. 4) Organization: It is the act of combing four factors of production to produce goods and services for the sake of profit. The production of wealth means production of goods and services. Second aspect is exchange of wealth there are many procedures of goods and services in a society. Every procedure produces goods and services more than his personal requirement. The exchange of wealth enables everyone in the society to satisfy his multiple wants. Third aspect is distribution of wealth, which means the distribution of goods and services among different sections or individuals of a society. As known by explanation of exchange of wealth that procedures of goods and services exchange the surplus wealth with each other through out the year. The last and forth aspect is consumption of wealth that is using up the utility of goods and services for the satisfaction of wants is called the consumption of wealth. Welfare Orientation of economics Definition of Economics by Dr. Alfred Marshall: Economics is a study of mankind in the ordinary business of life;it examines that part of individual and social action which is most closely connected with the attainment and with the use of material requisites of well being.” Thus, it is on one side a study of wealth and on other side more important a part of the study of man.
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Ordinary business of life: According to marshal we study only the life of ordinary persons, who take part in the economic activities in a normal ways. According to Marshall we study only those things which give us physical satisfaction . Such as food , cloth etc. Marshal does not include those activities which relate to our mental or spiritual satisfaction. He does not include the services of doctors, teachers and lawyers. According to
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Eco Notes - Wealth Orientation of economics According to...

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