Sunday, June 11, 2017

Traditional approach of Economics


The study of economics is divided into five main division i.e. Consumption, production, Exchange, distribution and public finance.

Consumption

The nature of human wants as well as the principle governing their satisfaction. The law of diminishing marginal utility, law of substitution the law of family expenditure and consumer's surplus are of special importance, the nature of demand and law of demand and supply also belong to consumption division of economics.

Production

How man makes efforts to satisfy his wants by producing wealth. In particular, how the four agents of production i.e., Land labor, capital, organization in the work of production. We study each of these agents, their importance and the condition of their efficiency.

Exchange

In the third division of economics is an exchange in this how is the various market forms buying and selling are done. And how prices are determined, this happens though the interaction of the forces of demand and supply.

Distribution

It is devoted to the study of the respective shares that go to the four agents land, labor, capital and organization. These shares take the form respectively of rent, wages, interest and profit. In distribution, we study how the share of each agent of production is determined.

Public finance


How government gets money and how they spend it. How government finance should be collected and distributed it. It involves a consideration of taxation debit, etc. 

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