Question In the beginning the name of economics was
Options
AEconomics of wealth
BPolitical economy
CWelfare economics
DNone of these
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Introduction to Business EconomicsMTP Apr 23Question 583 of 209
All Questions Correct Answer
✅ Option b — Political economy
All Options:
- AEconomics of wealth
- BPolitical economy
- CWelfare economics
- DNone of these
Detailed Solution & Explanation
• The correct answer is (B) Political economy. Historically, before economics became a distinct academic discipline, it was studied as part of a broader field concerned with the management of the state and its resources.
• This term, "Political Economy," was widely used from the 17th to the late 19th century. Thinkers like Adam Smith, David Ricardo, and John Stuart Mill, who are considered foundational figures in economics, wrote extensively on "political economy." Their works dealt with how nations produced and distributed wealth, the role of government, and societal well-being, all within a political context.
• The shift from "Political Economy" to simply "Economics" is often attributed to Alfred Marshall's influential textbook, "Principles of Economics," published in 1890. He aimed to make the subject more scientific and less overtly political, focusing on individual choices and market mechanisms.
• Option (A) "Economics of wealth" is incorrect because while early economics certainly dealt with wealth, it wasn't the formal name of the discipline. It describes a focus within political economy, not the name itself.
• Option (C) "Welfare economics" is incorrect. Welfare economics is a specific branch of modern economics that deals with the optimal allocation of resources and goods and how this affects social welfare. It developed much later than the initial naming of the field.
About This Chapter: Introduction to Business Economics
Paper
Paper 4: Business Economics
Weightage
5%
Key Topics
Meaning, Scope, Price Mechanism
This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.
View Official ICAI SyllabusExam Strategy Tip
Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.
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