Generally we will discussed the scope of economics.
1) Subject Matter Of Economics: There is different opinion among the economist regarding the
subject matter of economics. Adam Smith the father of economics theory is
mainly concerned with “An inquiry into the nature and causes of the wealth of
nation”.
2) Economics As Positive Or Normative Science: Before to discuss the topic that
economics is positive or normative science. I would like to explain the meaning
of positive or normative science. According to K. K. Dewitt positive science
describes while the normative science evaluates. The English classical school
was of the view (Marshall, Pigeon, Mathis) that economics is a normative
science. They had declared that science of economics should be concerned only
with what is and not what ought to be. Robbins senior and even Friedman has
described economics as a positive science. They said that economics is based on
logical. It is a value theory only. It is therefore neutral between ends. Before
described it that economics is a science or not. I would like that find of all
to clear the meaning of science. So no one can say that economics is a science
or art”.
3) Economics Is A Social Science: Marshall defines economics as the study of mankind in
ordinary business of life. It is clear form this definition that it does not a
man who live in a forest or jungle but study a man who live in society.
Economics is concerned with aggregate behavior of the people. Thus we conclude
the economics is social science.
OUR OWN VIEW: We do not agree from Robbins
because, it is function of sound economist to bridge this gulf. An economist
must come forward to give advice to the problem facing the human beings like
depression, unemployment, high price etc. as well. In other words it is both a
positive or normative science.
The Importance Of The Study Of
Economics Or The Role And The Significance Of The Study Of Economics: Today all over the world people have
become highly economic minded. They have realized that they study of economics
can provide them a solution to their economic and social problems. Today
economic is more useful than any other branch of knowledge because it makes
human welfare its direct and primary concern. Mr. Durbin gives so much
importance to economics and says “Economics is the intellectual religion of the
days.
The Study Of Economics;
1) Useful For The Consumer: The consumer can adjust his expenditure of various goods in
better way if he know the principles of economics. Under developed countries
are facing many problems like, unemployment, over population, law per capital
income and law production.
2) Useful For The Leader: Its study is helpful for the leader to understand the
economic problems, if they have a knowledge of economics. From this we can
easily judge that how the national income should be distributed among the four
factors of production.
3) Useful For The Businessman: From to a businessman can learn the principles of business
organization. He will be able to plan his business well and tackle his problem
successfully.
4) IMP For The Common Man: The study of economics is very useful for every citizen. It
enables him to understand and to criticize the government. He can also guide
the government.
5) Economic Planning: In the modern age the importance of economic planning can not be
ignored. Through planning we can utilize our natural resources in better way
and can improve our economic condition and it is also much important for the
solutions of economic crises.
6) Creates The Sense Of Responsibility: Economics develops the senses of responsibility among
the citizens by explaining the various problems and their solutions. Due to
economic awareness Pakistani citizens presented a huge amount in the prime
minister fund to get rid off from the foreign debt in 1997.
Economic Problem And How It Creates?
The scarcity
of means or resources creates two kinds of problems. This can only be done if
we arrange our wants in a scale of performance ordinarily necessaries are
satisfied first comforts are next and luxuries at the end. The second problem
is to eliminate waste, if in a country the resources are not fully utilizes and
they are lying idle, this will mean the maximum satisfaction is not being
derived from the limited resources and are being wasted for nothing. Every
economy has to solve the following some main problems.
What Goods To Produce?
The first
function is to decide which goods are to be produced and in how much quantity.
The decision about the allocation of resources between consumer, goods and
capital goods, their quality and quantity is utmost importance from the point
of view of economics growth.
How To Produce?
There are
many alternative methods or techniques of producing goods. But the problem
always create that how, because there are many choices and which one we should
be select.
How To Distribute The National
Income?
The socialists
are of the view that in a free enterprise economy, each individual should get
his share from the total output of goods according to the income available to
him through his genuine efforts.
How To Ensure Growth?
The economic
growth can be attained by:
1)
Increasing The Rate Of Investment.
2)
Replacement Of Capital Goods.
3)
By Improving The Technical Process Of
Production.
A society
therefore, shall have to take timely decision for allocating scare resources
for investment, replacement and technological progress. Thus, we conclude that
economic problem arises because of scarcity of resources that people want for
the satisfaction of goods.
Various Economics
Concepts
Wants: In
economic the term “end” means the goal which a man wishes achieve in economic
aspects of his life. Human wants are unlimited. When a man born then a want
also enter or born with him. There are two kinds of human wants.
1) Economic Wants
2) Non-Economic Wants
In the book
of economics we will only discuss the economic wants.
1) Economic Wants: All those wants which
should complicated by wealth called economic wants.
a) Necessities: That human wants which
are the basic for the life like food, shelter and clothes are called
necessities. Necessities of efficiency, conventional necessities and habits
necessities are also involve in necessities of life.
b) Comfort Of Life: That necessities
which give us relaxation and easy feelings in our life called “comfort of life”.
From comforts of life we can do a work easily, suppose boy go to his school on
foot and when he bought a cycle and use that. So this will comfort of his life.
c) Luxuries: Luxuries of life means the
goods and services, which if use in our life as luxury. These wants are not
necessary for us. We wish these wants for high reputation. But in one time, if
a poor man use a car for his business that will luxuries of his life and for a
professor will comforts and for a doctor will be necessities of life.
Ø Ends: All that wants which a man
complete are called his “ends”. There are two kinds of ends.
1. Economic Ends
2. Non-Economic Ends
For economic
ends man should have the resources. While for non-economic ends automatically
complete.
Ø Goods: In economic all that things
which have the ability of human want are called goods. Some are non-economic
goods like sunlight, fresh air and water etc and some are economic goods like.
Ø Consumer goods: Consumer goods means
that things which man get easily. These things use for short term period like
pencils, ink etc. and some things man can not get easily he have to done a long
struggle for that thing like house, motor car etc.
Ø Capital goods: Capital goods means
that goods which are not use directly but they use for capital and from that
capital they get more profit like if we give our house for rent then that house
will our capital.
Ø Services: That work which can do by a
man for getting some response or getting some income are called services.
Ø Income: That money which we get for
our services or the result of our labor is called income. Reward of four factor
is income, income = consumption + saving
Ø Savings: That part of income which
remain from our expenditure is called saving. We can use our saving as a
capital.
Ø Budget: Budget is the analyzing of
our national annual income. There are three kinds of it.
a) Surplus: If our income is more than
our expenditures this will called surplus budget.
b) Balance: If our income and
expenditures both are equal then this is our balance budget.
c) Deficit: If our income is less from
the our expenditures then this will our deficit of budget.
Ø Utility: According to him utility is
the basis on demand of an individual for a commodity depends. Thus utility is
the satisfaction which is derived by the consumer by consuming the goods. The utility
is subjective in nature.
Ø Wealth: We listen from everyone that
health is wealth, knowledge is wealth, mentality or honesty is wealth etc. But
in economics the wealth definition is different. In economics all those goods,
services and rupees which we get form our struggle, efforts or hardship is
called wealth.
Ø Value: In daily life we say value
means respect. For example, Umar have very value in society but in economics
the value means that power of goods from which we exchange another thing. For example,
I get two copies from Ali in exchange of a pen. Then a pen value is two copies.
Similarly a book price is RS.120. Then the book value is 120 rupees.