Nature And Scope Of Economics 1q1e5z

Explain the nature and scope of Economics. Introduction The nature and scope of economics are related to the study of wealth or human behaviour or of scarce resources. The scope is very wide and includes the subject matter of economics whether economics is a science or an art or whether it is positive or normative science. Each leading economists has defined economics a little differently. Adam Smith : His definition of economics is wealth oriented. His concept of Economic Man said that man tries to increase his economic gain for this self interest. Alfred Marshall : His definition of economics not only included wealth but also the ordinary business of life. That is he said economics is not only about earning wealth but also about spending money. Lionel Robbins : His definition of economics says that human want are unlimited but resources to satisfy those want are limited. So, Robbins’s definition says economics studies the relationship between ends and scarce means. Paul Samuelson : Samuelson’s definition of economic is somewhat similar to that of Robbins. While Robbins was concerned with the relationship between want and means for the short term, Samuelson was concerned with this relationship in the long run.

Nature of Economics It includes Economics is a science or an Art, or is it a Positive or Normative science. Economics as a Science Economics is a science since its laws have widespread soundness such as the law of diminishing returns, the law of diminishing marginal utility, the law of demand etc. It is called as a science since its self-remedial nature. It goes on amendments in the dawn of new specifics based on interpretations. Hence Economics is a science like any other science that has its own generalisations, theories or laws of economics which traces out a casual relationship between two or more phenomena. Economics as an Art The practical application of scientific techniques is the Art of Economics. Some economists consider economics as a science and art while few others as science and applied science. It is considered as newest of science and oldest of arts and the queen of all the social sciences. Economics as a Positive Science As per the nineteenth century experts, economics is a positive science. Since it seeks to explain what has actually happened but not what is ought to happen. According to J.N.Keynes, Positive science is defined as"A body of systematised knowledge concerning what ought to be and concerned with the ideal as distinguished from the actual."

Normative Economics With contrast to the Positive Science, Normative Science deals with the"what is ought to happen" cases. That is predictions of future economic development with regards to the present conditions are discussed in this. The postulations on which economic laws, theories or principles are based relate to man and his problems. If we attempt to test and forecast fiscal actions on their basis the subjectivity elements always penetrates. Therefore, the laws of economics are at best propensities. Conclusion Economics is concerned with human well-being as well as ethical values. It is science and an art, since the scientific principles are applied practically. It is both positive and normative science since the actual happening and the future happenings are dealt. Hence the scope and nature of economics deals in with all the above as explained by the economists.

Scope of economics Economics is a social science. The subject matter of economics deals with the analysis of economic problems of people in the society and the satisfaction of their wants. With the evolutionary changes of the society and its civilization, the subject matter scope of economics has expanded.Scope of economics is discussed below: 1. As social science economics deals with the economic activities of human being. One person day to day money earning and money spending activities constitute the subject matter of economics. For example, parents’ affection and nursing service for their children are not the subject matter of economics. 2. Resources are needed to satisfy people's wants. So, the availability of resources and their use are important subject matter of economics. Adam Smith has termed economics as the “Science of Wealth”. 3. People's wants are unlimited. But the resources to satisfy the wants are scarce. Economics discusses how men can get the maximum satisfaction by using the scarce means to satisfy wants on the basis of priority. So, as subject matter of economics, the scarcity of resources is considered very important. 4. People's wants are related to production, exchange, distribution and consumption. Again, currency, banking system, public finance, trade etc is also parts of economic activities. Economics discuss these issues also. Besides, how economic development of the country is achieved through the means of economic planning is also included in the subject matter of economics. 5. Economics discusses the economic problems and economic activities and indicates proper solution to these problems. Economics also discuses about the value judgment of human actions and behavior.