Economics is a social science which studies economic behaviour of a man. Prof. Robbins has defined Economics, as a science of choice. According to him economics is the science which studies human behavior in relation with unlimited wants of individual and limited or scarce resources. That’* how an individual chooses a combination of goods among different goods to satisfy his wants along with limited amount of money.
The three distinct components of economics:
(a) Production: It simply means creation of utility. Producer also have limited means while they have a variety of goods and services to choose from. The study of production explains that, as producer, how do they choose such combination, so that their revenue is maximized.
(b) Consumption: It is the process of using up utility, value of goods and services for the direct-satisfaction of our wants. Human wants are unlimited and no one can satisfy his all wants fully because resources to satisfy them are limited. The study of consumption explains that as consumer, how people allocate their income on the purchases of different goods and services so that their satisfaction is maximized
(c) Distribution: The study of distribution explains the economic principle on the basis of which income is distributed among the various factor of productions, how the national income arising from what has been produced in the country is distributed through wages and salaries, profits and interest.
