‘Scope’ means the sphere of
study. We have to consider what economics studies and what lies beyond it. The
scope of economics will be brought out by discussing the following.
a) Subject – matter of
economics.
b) Economics is a social
science
c) Whether Economics is a
science or an art?
d) If Economics is science,
whether it is positive science or a normative science?
a) Subject – matter of
economics:
Economics studies man’s life and work, not the
whele of it, but only one aspect of it. It does not study how a person is born,
how he grows up and dies, how human body is made up and functions, all these
are concerned with biological sciences, Similarly Economics is also not
concerned with how a person thinks and the human organizations being these are
a matter of psychology and political science. Economics only tells us how a man
utilizes his limited resources for the satisfaction of his unlimited wants, a
man has limited amount of money and time, but his wants are unlimited. He must
so spend the money and time he has that he derives maximum satisfaction. This
is the subject matter of Economics.
Economic Activity:
It we look around, we see the farmer tilling
his field, a worker is working in factory, a Doctor attending the patients, a
teacher teaching his students and so on. They are all engaged in what is called
“Economic Activity”. They earn money and purchase goods. Neither money nor goods
is an end in itself. They are needed for the satisfaction of human wants and to
promote human welfare.
To fulfill the wants a man
is taking efforts. Efforts lead to satisfaction. Thus wants-
Efforts-Satisfaction sums up the subject matter of economics.
b) Economics is a social
Science:
In primitive society, the connection between
wants efforts and satisfaction is close and direct. But in a modern Society
things are not so simple and straight. Here man produces what he does not
consume and consumes what he does not produce. When he produces more, he has to
sell the excess quantity. Similarly he has to buy a product which is not
produced by him. Thus the process of buying and selling which is called as
Exchange comes in between wants efforts and satisfaction.
Nowadays, most of the things
we need are made in factories. To make them the worker gives his labour, the
land lord his land, the capitalist his capital, while the businessman organizes
the work of all these. They all get reward in money. The labourer earns wages,
the landlord gets rent the capitalist earns interest, while the entrepreneur’s
(Businessman) reward is profit. Economics studies how these income—wages, rent
interest and profits-are determined. This process in called “Distribution: This
also comes in between efforts and satisfaction.
Thus we can say that the
subject-matter of Economics is
1.
Consumption- the satisfaction of wants.
2.
Production- i.e. producing things, making an effort to
satisfy our wants
3.
Exchange- its mechanism, money, credit, banking etc.
4.
Distribution – sharing of all that is produced in the
country. In addition, Economics also studies “Public Finance”
Macro Economics –
When we study how income and employment is
generated and how the level of country’s income and employment is determined,
at aggregated level, it is a matter of macro-economics. Thus national income,
output, employment, general price level economic growth etc. are the subject
matter of macro Economics.
Micro-Economic –
When economics is studied at individual level
i.e. consumer’s behavior, producer’s behavior, and price theory etc it is a
matter of micro-economics.
c) Economics, a Science or
an Art?
Broadly different subjects can be classified
as science subjects and Arts subjects, Science subjects groups includes
physics, Chemistry, Biology etc while Arts group includes History, civics,
sociology Languages etc. Whether Economics is a science or an art? Let us first
understand what is terms ‘science’ and ‘arts’ really means.
A science is a systematized
body of knowledge. A branch of knowledge becomes systematized when relevant
facts hove been collected and analyzed in a manner that we can trace the
effects back to their and project cases forward to their effects. In other words
laws have been discovered explaining facts, it becomes a science, In Economics
also many laws and principles have been discovered and hence it is treated as a
science. An art lays down formulae to guide people who want to achieve a
certain aim. In this angle also Economics guides the people to achieve aims,
e.g. aim like removal poverty, more production etc. Thus Economics is an art
also. In short Economics is both science as well as art also.
d) Economics whether
positive or normative science:
A positive science explains ''why" and
"wherefore" of things. i.e. causes and effects and normative science
on the other hand rightness or wrongness of the things. In view of this,
Economics is both a positive and. normative science. It not only tells us why
certain things happen, it also says whether it is right or wrong the thing to
happen. For example, in the world few people are very rich while the masses are
very poor. Economics should and can explain not only the causes of this unequal
distribution of wealth, but it should also say whether this is good or bad. It
might well say that wealth ought to be fairly distributed. Further it should
suggest the methods of doing it.
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