Definition of Economics — Practice Quiz

Only material goods like cloth, milk, sugar, etc.

Step 1: Adam Smith and other classical economists defined 'wealth' in a very narrow sense. Step 2: They included ONLY material goods such as cloth, milk, sugar, tea, ghee, furniture, etc. in the definition of wealth. Step 3: They excluded non-material goods like services of teachers, doctors, engineers, and dancers. Step 4: This is one of the main criticisms of the Wealth Definition — it is too narrow because it ignores the economic value of services. Step 5: So the correct answer is 'Only material goods like cloth, milk, sugar, etc.'

It gave too much importance to human welfare over wealth

Step 1: The criticisms of the Wealth Definition are: (a) too much stress on wealth, (b) only material goods included, (c) neglect of human welfare, and (d) concept of selfish 'economic man'. Step 2: Option A is a valid criticism — it did ignore human welfare by stressing too much on wealth. Step 3: Option B is also valid — it ignored services (non-material goods). Step 4: Option C is valid — the 'economic man' concept is unrealistic as real people also act out of love and affection. Step 5: Option D says it gave 'too much importance to human welfare' — this is INCORRECT. The Wealth Definition

Earning wealth and spending it to get maximum satisfaction

Step 1: Marshall used the phrase 'ordinary business of life' in a specific economic sense. Step 2: According to him, every person mainly acts to earn wealth and then spends those earnings to get maximum enjoyment or satisfaction. Step 3: This day-to-day economic routine of earning and spending is what Marshall called 'ordinary business of life'. Step 4: It does NOT refer to running a company, nor to political, religious, or charitable activities — those are non-economic activities outside the scope of Marshall's definition. Step 5: Therefore, the correct answer is 'Earning wealth and spending

An Essay on the Nature and Significance of Economic Science

Step 1: Lionel Robbins (1898–1984) published his famous book in 1932. Step 2: The book is titled 'An Essay on the Nature and Significance of Economic Science'. Step 3: In this book, he defined economics as 'the science which studies human behaviour as a relationship between ends and scarce means which have their alternative uses'. Step 4: 'Principles of Economics' belongs to Alfred Marshall, 'Wealth of Nations' to Adam Smith, and 'Economics: An Introductory Analysis' to Paul Samuelson. Step 5: The correct answer is 'An Essay on the Nature and Significance of Economic Science'.