No doubt Adam Smith is a founder of economics. The viewpoint of Adam Smith regarding the definition of economics was advocated by many other classical economists. All of them define d economics as science of wealth. Adam Smith defined economics as a science of national wealth.
In Long run all the inputs are variable, to get maximum profit there is an option with entrepreneur to adjust his plant size as well as his output. In the long run entrepreneur can extend the period of time so that output of the firms and the industry can be varied through a change in the scale of plant.
The behavior of the consumer who are the one to decide with regards to select, purchase and then consumption of goods as well as services for the satisfaction of their needs and want is known as consumer behavior. The cardinal approach is focused on consumer view on utility.
Alfred Marshall defines economics as “the study of mankind in ordinary business of life”, it is clear from the above definition that it does not study who lives aloof in some desert or jungle, but a man who lives in society. Even in society the man is not studied individually. Economics is concerned with the aggregate behavior of the message.
Various economists have different views about the subject matter of economics. Adam smith, in his book “An Inquiry into the nature and causes of Wealth of Nations" which was published in 1776 defined economics as an enquiry into the nature and causes of wealth of Nations in other words it lays importance on wealth rather than welfare of human beings.
Mixed Economy is an economic system which combines in itself the features of capitalism and that of the Socialism. Unlike a pure capitalistic economy, it has an important public sector, i.e. a number of industries which are owned and managed by the state. The State is not the all pervasive owner of all means of production.
Socialism is an economic system in which the means of production are owned and managed by the State. Ownership of means of production is not allowed. People can have personal property which is transferable and inheritable. In socialism economic activities are carried on mainly for social gains and personal interest is of less significance.
Communism is an economic system where means of production are controlled and managed by a Central State Authority, and there is also a restriction on the ownership of personal property. In communism personal belongings, as clothing, watches, and shoes are allowed to be owned by individuals and the houses are owned by the State.