8 AGRICULTURAL ECONOMICS
L. Muralikrishnan, S. Menaka
Economics definition
Adam smith (1776) defined economics as the science of wealth in his book An Inquiry into Nature and Causes of Wealth of Nations.
According to Marshall Economics is primarily a study of mankind in the ordinary business of life.
Agricultural Economics : An applied social science that deals with the production, distribution, and consumption of agricultural or farming goods and services.(or) an applied phase of social science of economics in which attention is given to all aspects of problems related to agriculture.
Subject matter of Economics : It can be studied through a) traditional approach and (b) modern approach.
a) Traditional Approach : Economics is studied under five major divisions namely consumption, production, exchange, distribution and public finance.
Consumption : The satisfaction of human wants through the use of goods and services is called consumption.
Production : Goods that satisfy human wants are viewed as "bundles of utility".
Exchange : Goods are produced not only for self-consumption, but also for sales. They are sold to buyers in markets. The process of buying and selling constitutes exchange.
Distribution : The production of any agricultural commodity requires four factors, viz., land, labour, capital and organization. The land owner gets rent, the labourer earns wage, the capitalist is given with interest and the entrepreneur is rewarded with profit. The process of determining rent, wage, interest and profit is called distribution.
Public finance : It studies how the government gets money and how it spends it.
b) Modern Approach : The study of economics is divided into: i) Micro-economics and ii) Macro-economics.
Economics definition
Adam smith (1776) defined economics as the science of wealth in his book An Inquiry into Nature and Causes of Wealth of Nations.
According to Marshall Economics is primarily a study of mankind in the ordinary business of life.
Agricultural Economics : An applied social science that deals with the production, distribution, and consumption of agricultural or farming goods and services.(or) an applied phase of social science of economics in which attention is given to all aspects of problems related to agriculture.
Subject matter of Economics : It can be studied through a) traditional approach and (b) modern approach.
a) Traditional Approach : Economics is studied under five major divisions namely consumption, production, exchange, distribution and public finance.
Consumption : The satisfaction of human wants through the use of goods and services is called consumption.
Production : Goods that satisfy human wants are viewed as "bundles of utility".
Exchange : Goods are produced not only for self-consumption, but also for sales. They are sold to buyers in markets. The process of buying and selling constitutes exchange.
Distribution : The production of any agricultural commodity requires four factors, viz., land, labour, capital and organization. The land owner gets rent, the labourer earns wage, the capitalist is given with interest and the entrepreneur is rewarded with profit. The process of determining rent, wage, interest and profit is called distribution.
Public finance : It studies how the government gets money and how it spends it.
b) Modern Approach : The study of economics is divided into: i) Micro-economics and ii) Macro-economics.