The definition deals with the following four aspects:
(i)
Economics is a science: Economics
studies economic human behavior scientifically. It studies how humans try to
optimize (maximize or minimize) certain objective under given constraints. For
example, it studies how consumers, with given income and prices of the
commodities, try to maximize their satisfaction.
(ii)
Unlimited ends: Ends refer to wants. Human wants are
unlimited. When one want is satisfied, other wants crop up. If man's wants were
limited, then there would be no economic problem.
(iii)
Scarce means: Means refer to resources. Since
resources (natural productive resources, man-made capital goods, consumer
goods, money and time etc.) are limited economic problem arises. If the
resources were unlimited, people would be able to satisfy all their wants and
there would be no problem.
(iv)
Alternative uses: Not only resources are scarce, they
have alternative uses. For example, coal can be used as a fuel for the
production of industrial goods, it can be used for running trains, it can also
be used for domestic cooking purposes and for so many purposes. Similarly,
financial resources can be used for many purposes. The man or society has,
therefore, to choose the uses for which resources would be used. If there was
only a single use of the resource then the economic problem would not arise.
It
follows from the definition of Robbins that Economics is a science of choice.
An important thing about Robbin's definition is that it does not distinguish
between material and non-material, between welfare and non-welfare. Anything
which satisfies the wants of the people would be studied in Economics. Even if
a good is harmful to a person it would be studied in Economics if it satisfies
his wants.