Scribd Logo
Upload

Welcome to Scribd!

  • 36 views

    Nature and Scope of Economics

    Uploaded by

    senthil vadivu
    Economics is the study of how individuals, households, firms, industries and governments make decisions regarding scarce resources. It aims to satisfy unlimited wants through the allocation and distribution of resources. Economics is both a science and an art - it uses scientific methodology but also provides general rules and laws to solve societal problems. Microeconomics studies individual units like consumers and firms, while macroeconomics analyzes aggregates and averages at the level of the whole economy. Both aim to maximize overall welfare through efficient allocation or use of resources.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Nature and Scope of Economics

    Uploaded by

    senthil vadivu
    36 views3 pages
    Economics is the study of how individuals, households, firms, industries and governments make decisions regarding scarce resources. It aims to satisfy unlimited wants through the allocation and distribution of resources. Economics is both a science and an art - it uses scientific methodology but also provides general rules and laws to solve societal problems. Microeconomics studies individual units like consumers and firms, while macroeconomics analyzes aggregates and averages at the level of the whole economy. Both aim to maximize overall welfare through efficient allocation or use of resources.

    Original Description:

    nature and scope of economics

    Original Title

    nature and scope of economics

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Economics is the study of how individuals, households, firms, industries and governments make decisions regarding scarce resources. It aims to satisfy unlimited wants through the allocation and distribution of resources. Economics is both a science and an art - it uses scientific methodology but also provides general rules and laws to solve societal problems. Microeconomics studies individual units like consumers and firms, while macroeconomics analyzes aggregates and averages at the level of the whole economy. Both aim to maximize overall welfare through efficient allocation or use of resources.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    36 views3 pages

    Nature and Scope of Economics

    Uploaded by

    senthil vadivu
    Economics is the study of how individuals, households, firms, industries and governments make decisions regarding scarce resources. It aims to satisfy unlimited wants through the allocation and distribution of resources. Economics is both a science and an art - it uses scientific methodology but also provides general rules and laws to solve societal problems. Microeconomics studies individual units like consumers and firms, while macroeconomics analyzes aggregates and averages at the level of the whole economy. Both aim to maximize overall welfare through efficient allocation or use of resources.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 3

    Economics

    Definition: Economics is that branch of social science which is concerned


    with the study of how individuals, households, firms, industries and
    government take decision relating to the allocation of limited resources to
    productive uses, so as to derive maximum gain or satisfaction.

    Simply put, it is all about the choices we make concerning the use of scarce
    resources that have alternative uses, with the aim of satisfying our most
    pressing infinite wants and distribute it among ourselves.

    Nature of Economics

    1. Economics is a science: Science is an organised branch of knowledge, that


    analyses cause and effect relationship between economic agents. Further,
    economics helps in integrating various sciences such as mathematics,
    statistics, etc. to identify the relationship between price, demand, supply and
    other economic factors.

     Positive Economics: A positive science is one that studies the relationship


    between two variables but does not give any value judgment, i.e. it states
    ‘what is’. It deals with facts about the entire economy.
     Normative Economics: As a normative science, economics passes value
    judgement, i.e. ‘what ought to be’. It is concerned with economic goals and
    policies to attain these goals.
    2. Economics is an art: Art is a discipline that expresses the way things are to
    be done, so as to achieve the desired end. Economics has various branches
    like production, distribution, consumption and economics, that provide general
    rules and laws that are capable of solving different problems of society.

    Therefore, economics is considered as science as well as art, i.e. science in


    terms of its methodology and arts as in application. Hence, economics is
    concerned with both theoretical and practical aspects of the economic
    problems which we encounter in our day to day life.

    Scope of Economics
     Microeconomics: The part of economics whose subject matter of study
    is individual units, i.e. a consumer, a household, a firm, an industry, etc. It
    analyses the way in which the decisions are taken by the economic agents,
    concerning the allocation of the resources that are limited in nature.
    It studies consumer behaviour, product pricing, firm’s behaviour. Factor
    pricing, etc.

     Macro Economics: It is that branch of economics which studies the entire


    economy, instead of individual units, i.e. level of output, total investment,
    total savings, total consumption, etc. Basically, it is the study of aggregates
    and averages. It analyses the economic environment as a whole, wherein
    the firms, consumers, households, and governments make decisions.
    It covers areas like national income, general price level, the balance of
    trade and balance of payment, level of employment, level of savings and
    investment.

    The fundamental difference between micro and macro economics lies in


    the scale of study. Further, in microeconomics, more importance is given to
    the determination of price, whereas macroeconomics is concerned with the
    determination of income of the economy as a whole.

    Nevertheless, microeconomics and macroeconomics are complementary to


    one another, as they both aimed at maximising the welfare of the economy
    as a whole.

    From the standpoint of microeconomics, the objective can be achieved


    through the best possible allocation of scarce resources. Conversely, if we
    talk about macroeconomics, this goal can be attained through the effective
    use of the resources of the economy.

    You might also like