Livestock Economics, Marketing and Business Management

APPROACHES TO THE STUDY OF ECONOMICS

In Traditional approach, economics is studied under 5 major divisions.

Consumption

• Satisfaction of human want on use of goods and services is known as consumption.

Production

• It is the creation of utilities and values. This part of subject deals with economics of agents or factors of production i.e. land, labour, capital or organisations, earning wealth for the purpose of satisfaction of human wants.
• Marshall makes a distinction between two types of things i.e. material things and immaterial things.

Exchange

• It is the act of obtaining the desired object from some one by offering something in return.
• Goods produced are not for self-consumption alone. They are primarily for sale.
• They are sold in market where buyers buy the commodities and sellers sell the commodities in particular price.
• Thus the process of buying and selling put together constitute exchange.

Distribution

• Production of any commodity requires land, labour, capital and management.
• These factors of production are to be rewarded for their services in the process of production.
• The landlord gets rent for land, labour earns wages. The capital is given with interest or manager is rewarded with profit.
• Thus the process of determining wages, rent, interest and profit is known as distribution.

Public Finance

• Studies that how the Government gets money and how it spends money. Hence in public finance, taxation, interest structure, Public expenditure etc., are dealt.