What is the basic definition of economics for BS Islamic studies course code 303 ? What is economics and example? What are the three definition of economics?

Economics Course Code 303

BS Islamic Studies

Govt: Post Graduate College Taunsa Sharif

Utility is the want power of a commodity .

It has four types: 

1. Initial Utility
2. Marginal Utility
3. Total Utility
4. Saturation Point
5. Negative Utility

Adam smith is the founder of Economics. He published the book ``An inquiry into nature and causes of wealth of nations´´ in 1776. 

He defined Economics as:

``Economics is the science of wealth´´

Economics is a science in which the nature of wealth and all those laws are studied which are related to the production, distribution, exchange, and consumption of wealth´´. It is related with the explanation of economic phenomena. It is also called ``Value-Free Economics´´.

Microeconomics and  Macroeconomics

Microeconomics deals with the study of small part of economy.

1. It is also called ``Price Theory´´
2. It is derived from Greek word Mikros meaning one millionth part .

Characteristics of Microeconomics

1. Theory of consumer behavior 

It deals with the study of:

• How consumer decides his purchase!
• What factor changes hid decision!

2) Behavior of firm

1. It examines the supply side of economics .It  discuss the basic problem of firm. Like :What to produce? When to produce?

3)Price Theory

It deals with demand - Supply side of Economy. In this theory ,price of commodity is determined.

4)Theory of income Distribution

It deals with the principle according to which wages, rent, interest, and profit are determined.

Macroeconomics

It deals with the functioning of economy as a whole.

It is also called ``Income Theory´´

1) Theory of Employment and Income distribution

At national level, it deals with the problem that arise in connection with the employment and income.

It also tells how to raise the level of national income and employment.

2)Theory of Trade Cycle

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