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Scope of Economics:

 

The scope of economics is the area or boundary of the study of economics. In scope of economics we answer and analyze the following three main questions:

 
(i) What is the subject matter of economics?

 

(ii) What is the nature of economics?

 

(iii) What are the limitations of economic?

 

(i) Subject Matter of Economics:

 

There is a difference of opinion among economists regarding the subject-matter of economics. Adam Smith, the father of modern economic theory, defined economics as a subject, which is mainly concerned with the study of nature and causes of generation of wealth of nation.

 

Marshall introduced the concept of welfare in the study of economics. According to Marshall; economics is a study of mankind in the ordinary business of life. It examines that part of individual and social actions which is closely connected with the material requisites of well being. In this definition, Marshall has shifted the emphasis from wealth to man. He gives primary importance to man and secondary importance to wealth.

 

The Robbinsian’s concept of the subject-matter of economics is that: “economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses”. According to Robbins (a) human wants are unlimited (b) means at his disposal to satisfy these wants are not only limited, (c) but have alternative uses. Man is always busy in adjusting his limited resources for the satisfaction of unlimited ends. The problems that centre round such activities constitute the subject-matters of economics.

 

Paul and Samuelson, however, includes the dynamic aspects of economics in the subject matter. According to them, "economics is the study of how man and society choose with or without money, to employ productive uses to produce various commodities over time and distribute them for consumption now and in future among various people and groups of society”.

 

(ii) Nature of Economics:

 

The economists are also divided regarding the nature of economics. The following questions are generally covered in the nature of economics.

 

(a) Is economics a science or an art?

 

(b) Is it a positive science or a normative science?

 

(iii) Economics As a Science or An Art:

 

Economics is both a science and an art. Economics is considered as a science because it is a systematic knowledge derived from observation, study and experimentation. However, the degree of perfection of economics laws is less compared with the laws of pure sciences.

 

An art is the practical application of knowledge for achieving definite ends. A science teaches us to know a phenomenon and an art teaches us to do a thing. For example, there is inflation in Pakistan. This information is derived from positive science. The government takes certain fiscal and monetary measures to bring down the general level of prices in the country. The study of these fiscal and monetary measures to bring down inflation makes the subject of economics as an art.

 

After arriving at a conclusion that economics is both a science as well as an art. Here arises another controversy. Is economics a positive science or a normative science?

 

(iv) Economics is Positive or Normative Science:

 

There again difference of opinions among economists whether economics is a positive or normative science. Lionel Robbins, Senior and Friedman have described economics as a positive science. They opined that economics is based on logic. It is a value theory only. It is, therefore, neutral between ends.

 

Marshall, Pigou, Hawtrey, Keynes and many other economists regard economics as a normative science. According to them, the real function of the science is to increase the well-being of man. They have given suggestions in their works for promotion of human welfare.

 

For example, Malthus has given suggestions of checking the rising population. M. Keynes has suggested measures to remove unemployment.

 

We agree with Mr. Frazer, that an economist who is only an economist is a poor pretty fish. An economist must come forward to give advice to the problems facing the human being like depression, unemployment, high prices, etc., for increasing his welfare.

 

Economics, to conclude, has both theoretical as well as practical side. In other words, it is both a positive and a normative science.

Relevant Articles:

» Economics as a Science of Wealth or Definition of Economics By Adam Smith
» Economics as a Science of Material Welfare or Definition of Economics By Alfred Marshall
» Economics as a Science of Scarcity and Choice or Definition of Economics By Robbins
» Economics as a Science of Growth and Efficiency or Definition of Economics By Modern Economists
» Is Economics Neutral Between Ends
» Economics Problems
» Scope of Economics
» Nature of Economic Laws
» Methods of Economic Analysis
» Economic Analysis and Economic Policy
» Micro and Macro Analysis
» Importance of the Study of Economics
 

 

Principles and Theories of Micro Economics
Definition and Explanation of Economics
Theory of Consumer Behavior
Indifference Curve Analysis of Consumer's Equilibrium
Theory of Demand
Theory of Supply
Elasticity of Demand
Elasticity of Supply
Equilibrium of Demand and Supply
Economic Resources
Scale of Production
Laws of Returns
Production Function
Cost Analysis
Various Revenue Concepts
Price and output Determination Under Perfect Competition
Price and Output Determination Under Monopoly
Price and Output Determination Under Monopolistic/Imperfect Competition
Theory of Factor Pricing OR Theory of Distribution
Rent
Wages
Interest
Profits
Principles and Theories of Macro Economics
National Income and Its Measurement
Principles of Public Finance
Public Revenue and Taxation
National Debt and Income Determination
Fiscal Policy
Determinants of the Level of National Income and Employment
Determination of National Income
Theories of Employment
Theory of International Trade
Balance of Payments
Commercial Policy
Development and Planning Economics
Introduction to Development Economics
Features of Developing Countries
Economic Development and Economic Growth
Theories of Under Development
Theories of Economic Growth
Agriculture and Economic Development
Monetary Economics and Public Finance
History of Money

 

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