Robins theory of economics | Economics as science of scarcity:- In 1932, the British Lionel Robbins provided another definition of economic science, considering it as the branch that analyzes how humans satisfy their unlimited needs with limited resources that have different uses.
When a man decides to use a resource for the production of a certain good or service, he assumes the cost of not being able to use it for the production of a different product. This is called opportunity cost. The function of the economy is to provide rational criteria so that the allocation of resources is as efficient as possible.
More from Business Study Notes:- What is Economy
Robins Theory of Economics
In broad outline, two philosophical currents can be mentioned with respect to economics. When the study refers to principles that can be verified, it is positive economics. Instead, when taking into account statements that are based on value judgments that cannot be verified, there is talk of normative economics.
For the German Karl Marx , the economy is the scientific discipline that analyzes the production relations that exist within society. Based on historical materialism, Marx studies the concept of value which posits that the value has its objective origin according to the amount of work necessary to obtain a good.
It should be noted that there are numerous schools of economic thought, which present different approaches to analysis. The mercantilism , the moneratismo , the Marxism and Keynesianism are some of them.
The word economy has many uses that allow it to be linked to different aspects of trade or the supply-demand relationships that exist. Some of these meanings are:
Sustainable economy , also known as sustainable development, is a new term that has become fashionable in recent years and enclosing a draft social life based on the reuse of raw materials for various purposes. It is about changing the productivity process based on an economy based on the care of the environment and on improving the quality of life of a society. Basically it seeks to satisfy the needs of the generations who are living in a certain space without endangering the livelihood or economic possibilities of future generations.
Business economics is the way in which an organization can manage its resources and services, offering a view against the market competitive. It uses several scientific disciplines to carry out this work. It is a way of applying economy in the scope of a company and external values such as indexes of the stock market, market demand and other variables must be taken into account for its proper functioning.
Natural economy as defined by the biologist MT Ghiselin, is the study of the consequences that cause shortages in living things. Proposing an in-depth analysis on human actions and their side effects on the environments.
Political economy is the study of human behavior, characteristic examined within a legal context. Political economy is related to the natural economy insofar as human actions, its political economy can affect the natural environment, positively or negatively, the interaction of living beings with the environment always modifies it.
Mixed economy is a system of trade that is not totally free, where the state is responsible for pautar certain rules enabling a balanced distribution of profits among the various merchants of this economic system.
The market economy is a social system where factors include the division of employment, goods and services and the interaction between the entities that make up a society. It is a system free of prices fixed by demand and supply. It is an absolutely free economic system, where those involved in the buying and selling exercise are the conditions. There is no country today where commercial freedom is absolute.