Class XI, Principles of Economics, "Scope of Economics"

Scope of Economics

The scope of a subject refers to the fields they actually cover. The scope of economics can be finely understood if we classify it into heads viz:
1.Subject matter
2.Nature
3.Limitations
These headings are discussed as under:
Subject Matter
It can be further studied as:
According to Adam Smith
The classical economist Adam Smith considered wealth as the subject matter of economics. According to him economics deals with the activities of man in earning his income me and spending it among different objects in order to obtain the maximum benefit for satisfaction of his wants.
According to Marshal
The neo classical economist Alfred Marshal regarded material welfare it be the subject matter of economics. According to him the activities of man kind as a social being and in the ordinary business of life which are related to the attainment of economic well being through the use of the material requisite are considered to be the subject matter of economics.
According to Robbins
According to Robbins those activities, which originate because of the imbalance relation between human wants and available resources constitute the subject matter of economics.
According to Keynes
Keynes is of the view that economics problems constitute the subject matter of economics.
Nature of Economics
The nature of economics includes study or discussion that weather economics is arts or science?
Economics as a Science
Most of the economists regard economics as a science because it is a body of knowledge, which deals facts and rules and studies their cause?????? with their effect. Now economics as a science generally studied two heads:
Economics as a Positive Science
Most of the English economists regard economics as a positive science because it examines the relationship between causes and effect. It studies economic problems, which are existing and effect directly human life.
Economics as a Normative Science
Some economists think that economics is a normative science. It tells that weather a particular thing is describable or not. The aim of economics is to promote human welfare so it studies the factors relating to what out to be.
Economics is an Art
Economics not only studies how economic problems arise but it also recommends positive measures to end these problems. The purpose of economics is to promote welfare and satisfaction and thus it outlines the guidelines to achieve these objectives.
Limitations of Economics
Economics has some limitations, which are as follow:
1. Economics does not study all human activities. It is limited only to those activities, which are related to wealth.
2. Economics studies only the human activities. It does not study the activities of other creatures.
3. Economics studies the activities of normal real and social man. The activities of insane, drunkards etc are not studied under economics.
Un-Employment can be Eradicated
Economics can help to reduce unemployment through division of labor large-scale production etc.
Distribution of Money
Economics teaches equal distribution of money among all the people to discriminate the difference of rich and poor through laws of taxation etc.
Utility to Individual
It can be studied as:
1. Utility to Producers
The study of economics is of great importance to the capitalitists. It can help them to achieve cooperation of the working classes, utilize the available resources and factors of production to their best out put and maximum profit. Buing and selling principles, supply consumption, demand determination etc are to be solved though economics.
2. Utility to Consumers
Economics offers practical guidance to the consumers. It suggest them the principle by which he can drive maximum satisfaction and benefits out of his limited income it helps him to divide his income successfully between the expenditure of necessasities, comfort and luxuries.
3. Utility to Laborer
The study of economics is also useful for the laborers. It encourages him to claim appropriate return for his work.