Economics
‘Scope’ means the sphere of study. We
have to consider what economics studies and what lies beyond it. The
scope of economics will be brought out by discussing the following.
a) Subject – matter of economics.
b) Economics is a social science
c) Whether Economics is a science or an art?
d) If Economics is science, whether it is positive science or a normative science?
a) Subject – matter of economics: Economics studies man’s life and work, not the whele of it, but only one aspect of it. It does not study how a person is born, how he grows up and dies, how human body is made up and functions, all these are concerned with biological sciences, Similarly Economics is also not concerned with how a person thinks and the human organizations being these are a matter of psychology and political science. Economics only tells us how a man utilizes his limited resources for the satisfaction of his unlimited wants, a man has limited amount of money and time, but his wants are unlimited. He must so spend the money and time he has that he derives maximum satisfaction. This is the subject matter of Economics.
a) Subject – matter of economics.
b) Economics is a social science
c) Whether Economics is a science or an art?
d) If Economics is science, whether it is positive science or a normative science?
a) Subject – matter of economics: Economics studies man’s life and work, not the whele of it, but only one aspect of it. It does not study how a person is born, how he grows up and dies, how human body is made up and functions, all these are concerned with biological sciences, Similarly Economics is also not concerned with how a person thinks and the human organizations being these are a matter of psychology and political science. Economics only tells us how a man utilizes his limited resources for the satisfaction of his unlimited wants, a man has limited amount of money and time, but his wants are unlimited. He must so spend the money and time he has that he derives maximum satisfaction. This is the subject matter of Economics.
Economic Activity:
It we look around, we see the farmer tilling his field, a worker is
working in factory, a Doctor attending the patients, a teacher teaching
his students and so on. They are all engaged in what is called
“Economic Activity”. They earn money and purchase goods. Neither money
nor goods is an end in itself. They are needed for the satisfaction of
human wants and to promote human welfare.
To fulfill the wants a man is taking efforts. Efforts lead to satisfaction. Thus wants- Efforts-Satisfaction sums up the subject matter of economics.
To fulfill the wants a man is taking efforts. Efforts lead to satisfaction. Thus wants- Efforts-Satisfaction sums up the subject matter of economics.
b) Economics is a social Science:
In primitive society, the connection between wants efforts and
satisfaction is close and direct. But in a modern Society things are
not so simple and straight. Here man produces what he does not consume
and consumes what he does not produce. When he produces more, he has to
sell the excess quantity. Similarly he has to buy a product which is
not produced by him. Thus the process of buying and selling which is
called as Exchange comes in between wants efforts and satisfaction.
Nowadays, most of the things we need are made in factories. To make them the worker gives his labour, the land lord his land, the capitalist his capital, while the businessman organizes the work of all these. They all get reward in money. The labourer earns wages, the landlord gets rent the capitalist earns interest, while the entrepreneur’s (Businessman) reward is profit. Economics studies how these income—wages, rent interest and profits-are determined. This process in called “Distribution: This also comes in between efforts and satisfaction.
Thus we can say that the subject-matter of Economics is
Nowadays, most of the things we need are made in factories. To make them the worker gives his labour, the land lord his land, the capitalist his capital, while the businessman organizes the work of all these. They all get reward in money. The labourer earns wages, the landlord gets rent the capitalist earns interest, while the entrepreneur’s (Businessman) reward is profit. Economics studies how these income—wages, rent interest and profits-are determined. This process in called “Distribution: This also comes in between efforts and satisfaction.
Thus we can say that the subject-matter of Economics is
- Consumption- the satisfaction of wants.
-
Production- i.e. producing things, making an effort to satisfy our wants
-
Exchange- its mechanism, money, credit, banking etc.
-
Distribution – sharing of all that is produced in the country. In addition, Economics also studies “Public Finance”
Macro Economics
– When we study how income and employment is generated and how the
level of country’s income and employment is determined, at aggregated
level, it is a matter of macro-economics. Thus national income, output,
employment, general price level economic growth etc. are the subject
matter of macro Economics.
Micro-Economic – When economics is studied at individual level i.e. consumer’s behavior, producer’s behavior, and price theory etc it is a matter of micro-economics.
Micro-Economic – When economics is studied at individual level i.e. consumer’s behavior, producer’s behavior, and price theory etc it is a matter of micro-economics.
c) Economics, a Science or an Art? Broadly
different subjects can be classified as science subjects and Arts
subjects, Science subjects groups includes physics, Chemistry, Biology
etc while Arts group includes History, civics, sociology Languages etc.
Whether Economics is a science or an art? Let us first understand what
is terms ‘science’ and ‘arts’ really means.
A science is a systematized body of knowledge. A branch of knowledge becomes systematized when relevant facts hove been collected and analyzed in a manner that we can trace the effects back to their and project cases forward to their effects. In other words laws have been discovered explaining facts, it becomes a science, In Economics also many laws and principles have been discovered and hence it is treated as a science. An art lays down formulae to guide people who want to achieve a certain aim. In this angle also Economics guides the people to achieve aims, e.g. aim like removal poverty, more production etc. Thus Economics is an art also. In short Economics is both science as well as art also.
A science is a systematized body of knowledge. A branch of knowledge becomes systematized when relevant facts hove been collected and analyzed in a manner that we can trace the effects back to their and project cases forward to their effects. In other words laws have been discovered explaining facts, it becomes a science, In Economics also many laws and principles have been discovered and hence it is treated as a science. An art lays down formulae to guide people who want to achieve a certain aim. In this angle also Economics guides the people to achieve aims, e.g. aim like removal poverty, more production etc. Thus Economics is an art also. In short Economics is both science as well as art also.
d) Economics whether positive or normative science: A
positive science explains ''why" and "wherefore" of things. i.e.
causes and effects and normative science on the other hand rightness or
wrongness of the things. In view of this, Economics is both a positive
and. normative science. It not only tells us why certain things
happen, it also says whether it is right or wrong the thing to happen.
For example, in the world few people are very rich while the masses are
very poor. Economics should and can explain not only the causes of
this unequal distribution of wealth, but it should also say whether
this is good or bad. It might well say that wealth ought to be fairly
distributed. Further it should suggest the methods of doing it.
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