Question

Elaborate the nature and scope of Economics.

Answer 1

Explanation:

Nature of Economics:
The nature of a subject refers to its contents and how and why they find a place in the subject. This nature is understood by studying the various definitions given by Economists.

The nature of Economics can be clearly understood from the following definitions:

1. Adam Smith (classical Era) who considered Economics as a science of wealth gave wealth definition.
2. Alfred Marshall (Neo-classical era) considered Economics as a social science which studies wealth on one side and the material welfare of human beings on the other side.
3. Robbin’s Scarcity Definition (new age) He defined Economics as a science of choice.
4. Samuelson gave a growth definition that represents the modern age.
5. The scope of economics refers to the subject matter of economics. It throws light on whether it is an art or a science and science, whether positive or normative science.

1. Economics: It’s the subject matter:
   
   
2. Related to society:
   a. Economics focuses on the behaviour and interactions among economic agents, individuals, and groups belonging to an economic system.
   b. It deals with the consumption and production of goods and services and the distribution of income among the factors of production.
3. Related to scarce resources:
   Economics studies the ways in which people use the available resources to satisfy their multiplicity of wants.
4. Human science or Social science:
   a. Economics is concerned with the activities of human beings.
   b. The action of one member affects those of the others in the society. Hence, economics is called human science or social science.
5. Related to wealth:
   a. Economics constitutes all human activities related to wealth.
   b. Human activities not related to wealth are not included in Economics.

6. Economics as an art:
   a. Art is the practical application of knowledge for achieving particular goals.
   b. Economics provides guidance to the solutions to all the economic problems.

7. Economics as a science:
   a. Science is a systematic study of knowledge. Science develops the co-relation between cause and effect based on facts.
   b. Economics examines the relationship between the cause and effect of the problems. Hence, it is rightly considered as both an art and a science.

8. Economics: Positive and Normative science:

   Positive- Economics is concerned with how ? and why? and normative Economics with ‘What ought to be’. Economics is both a positive and normative science.