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NATURE & SCOPE OF ECONOMICS

NATURE & SCOPE OF ECONOMICS. 1. WHAT ABOUT ECONOMICS. Economics is derived from a Greek word OIKO (house) & Nomos (to manage) . Main concern in economics is resources are limited to satisfy unlimited human wants. WHAT ABOUT ECONOMICS.

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NATURE & SCOPE OF ECONOMICS

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  1. NATURE & SCOPE OF ECONOMICS 1

  2. WHAT ABOUT ECONOMICS • Economics is derived from a Greek word OIKO(house) & Nomos(to manage) . • Main concern in economics is resources are limited to satisfy unlimited human wants.

  3. WHAT ABOUT ECONOMICS • These basic necessities of life makes humans to earn for living. • Economics is science of economics activities ,it studies how man manages to satisfy his unlimited economic wants with the help of available limited resources. • Economics is a progressive social science.

  4. DEFINITIONS OF ECONOMICS • Economics is a science of wealth (Adam Smith). • Economics is a science of material welfare (Marshall). • Economics is science of scarcity & choice(Robbins).

  5. ECONOMICS IS A SCIENCE OF WEALTH • Adam smith the forefather of classical economists wrote a book in 1776 “An enquiry into the nature & causes of the wealth of nations” • According to him : Economics is a science which studies the process of production, consumption, distribution & exchange of wealth.

  6. ECONOMICS IS A SCIENCE OF WEALTH • The focal point of his definition is : • “Economics is a science of wealth of country & its growth”

  7. CRITICAL EVALUATION • In 19th century the Economists like Ruskin, Carlyle & Mathew Arnold criticize his definition economics as “Bread & Butter science”;””Teach selfish & love of money”;”Dark & dismal science”.

  8. CONCULUSION: • All that happened because that term economics was interpreted in a very narrow sense( to mean riches & abundance of money) in broader term we can that wealth is mean to satisfy human wants. • In his definition he gave primary importance to wealth & secondary to men. but wealth is for men ,not men is for wealth.

  9. ECONOMICS IS SCIENCE OF METRIAL WELFARE (MARSHALL) • According to Marshall: “ Economics is the study of mankind in the ordinary business of life. it examines that part of individual & social action which is most closely concerned with the attainment & use of material requisites of well-being”

  10. ECONOMICS IS SCIENCE OF METRIAL WELFARE (MARSHALL) • Main Features : • It’s a study of ordinary person living in a society .It’s not study of isolated individual • It studies only the economic aspect of human being & doesn't have any concern with any other aspect like religion, social & political. Strictly speaking ,its relates to how the man earns his income & how he spend it. • It studies only material requisites of well-being or cause of material welfare . • It does not regard wealth as the be all & the all of economic activities .wealth is sought only for promoting human welfare .

  11. CRITICAL EVALUATION: • Narrow down the scope of economics: • Exclude non-material things. • E.g. of lawyer, doctor engineer, singer & consultant. • Relation sought between economic & welfare is wrong approach: • Some activities are economic activities but are not welfare activities. • E.g. manufacturing & sale of intoxicants,such,as,cigars & alcoholic goods .

  12. CRITICAL EVALUATION: • Welfare is vague concept & can not be quantitatively measured:

  13. ECONOMICS IS SCIENCE OF SCARCITY & CHOICES(ROBBINS) • According to the book “Nature & Significance Of Economic Science” publish in 1932 . • “Economics is science which studies human behavior as a relationship between ends & scare means which have alternative uses”

  14. ECONOMICS IS SCIENCE OF SCARCITY & CHOICES(ROBBINS) • Basic features of his definition: • Human wants are unlimited. • Means are limited. • Wants are not equally distributed. • Means have alternative uses.

  15. SCOPE OF EOCONOMICS • Subject matter of economics. • Economics is a science or as an art. • Economics as a positive or normative science. • Economics as social science.

  16. SUBJECT MATTER OF ECONOMICS: • The subject matter of economics is also not free from controversy. • How ever today economists consider the subject matter of economics as: “All those human being economic activities made for making choices among scare resources to allocate them for present & future aiming all maximizing the gain possible are the subject matter of economics”

  17. ECONOMICS AS SCIENCE • It is science in the sense, it is a systematic knowledge derived from scientific study, observation & experiments based on scientific methods.

  18. ECONOMICS AS AN ART • Economics is an art too because an art is a system of rules for the attainment of given end. There are several branches of economics which provide practical guidance in the solution of economic problem. • Its is a science in its methodology and an art in its application.

  19. Positive & Normative Economics • Positive economicstells us that what are the facts. • For E.g I give charity (involve facts) • Normative economics tells us that what should do. • For E.g I should give charity(involve judgment)

  20. Micro Or Macro Economics • Micro Economics: • The study of economic behavior of individual human beings & firms. • Macro Economics: • The study of whole economy.

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