According to Marshall, economics is a science of material welfare where as i the view of Robbins, economics is a science of choice. The two Definition have certain similarities and dissimilarities which are discussed below. (economics)
1.Primary Place to man :
Both The definitions Have primary place to man. In the view of Marshall economics which studies the mankind in terms of wealth whereas according to Robbins, economics studies the human behavior as a relationship between ends and the scare means which have alternative uses. The objective of both definitions are to study the mankind.
Both the definitions concepts of maximum welfare directly or indirectly . welfare definitions aims to utilize wealth to achieve maximum material welfare and scarcity definition to utilize scare resources to achieve maximum satisfaction.
3.Wealth and scare means:
Marshall has used the word “health” Whereas Robbins has used the word “scare means” in addition to Wealth. But the meaning of both the words is the same, only the presentation is different.
1.Economic and non-economic activities:
Marshall classifies the human activities into economic and non-economic. Economic activities are related to physical goods which increases material welfare. According to him, Economics only studies the material welfare. But according to Robbins, all the human activities are under the study of economics where scarcity and choice arise.
2.Social and human science:
According to Marshall, economics is a social science which studies ordinary business of life. It does not study the extra ordinary man like Robbins Cruseo. But, In the view of Robbins, Economics is a human science which studies all the human being who involved in the use if scare means to fulfill the unlimited wants.
3.Normative and Positive Science:
Marshall Regards economics as a normative Science. Thus, The economics have the Responsibility of making Value Judgment, their functions is to examine the right or wrong of an economic activity. Robbins regards economics as a positive science. Thus The economists have no Responsibility of value Judgment i.e their task is not to examine the right or wrong of an economic activity. Their Responsibility is to explain and explore not to suggest.
4.Application in different Economics:
Marshall’s definition is applicable only in capitalist economy where individual freedom is but Robbin’s Definition is applicable in all types economies such as socialist,capitalist, and mixed economic system.
Scope means the range of things that a subject deals with. Thus, by scope of economics, we mean the area of extent of its study. While Discussing the scope of economics, we have to refer it to the subject matter of economics and nature of the economics.
subject matter of Economics:
other topics here : economics
The subject matter of economics is what we study in economics. It is very difficult task to give a precise a subject matter of economics. Different economists have given different views regarding it. According to Adam Smith, economics is a science of wealth. Hence, wealth is the subject matter of economics. Similarly , Marshall opined that the economics is the study if wealth fare . There fore, The subject matter of economics includes all those activities of human beings which promote material welfare. How ever, Robbins has widened the subject matter of economics. He made economics a science of studying all those activities of man which satisfy their unlimited wants with the help of limited means. Thus, According to Robbins, The subject matter of economics is the problem of scarcity and choice.
In the combined form, The subject matter of economics can be classified into following two types.
note : What is economics?
According to Traditional approach, economics studies those actions of mankind connected with wealth. It teaches how to use limited means to fulfill unlimited wants. The subject matter of economics can be viewed as a continuous circle of unlimited wants efforts and satisfaction.
People have unlimited wants and the wants five rise to efforts. Everybody involves in different economic activities which may be termed as effort. For example a, farmer cultivates in land, a teacher teaches in a school or college, a labourer works in a factory. All these activities yield wealth. This wealth is spent for the satisfaction of wants. wants rise again-again efforts are again made and again satisfaction are again derived.
Economics is treated as the study of wants effots and satisfaction. In economics, we study how goods and services are produced, consumed and exchanged and distributed. Hence, Consumption, production exchange,distribution and public finance are the main subject matter of economics which are explained below
To satisfy the human wants by utilizing the goods and services is known as consumption This subject matter of economics consists of theories of computer behavior and demand. The main subject matter included on consumption are theroy of marginal utility consumer’s surplus indifference curve analysis, law of demand and elasticity of demand.
Creation of utility on anythings is known as production. In any other words, converting the input into the output (goods and services ) is called production. The goods And services are produced for consumption. Production covers the theories of production such as law of variable proportion and law of returns to scale . Similarly, The concept of revenue,costs and supply are also studied under production.
Exchange is another important subject matter of economics. It Consists of the theories of exchange or product pricing. Under this, we study the determination of price of goods and services under different market conditions such as perfect competitions, Monopoly monopolistic,oligopoly and so on. Similarly, the exchange also includes the financial system and it contributes such as money, banking detail and credit. It also includes international trade.
The allocation of all national income among various factors of production, such as land, labour , capital and organizations is known as distribution. Hence Distribution covers the theories of distribution. Under this subject matter of economics, we study how prices of factor of production such as rent, interest, wages and profit are determined.
Public finance studies the income and expenditure of government. It is the science concerned with income and expenditure of public authorities. Public finance covers the theories of public expenditure and debt.
According to the modern approach, the subject matter of economics is broadly divided into two parts microeconomics and macroeconomics
Microeconomics studies the economic activities of individual units like individual consumer, individual producer, and individual firm and so on. All the Traditional theories such as consumption, production, exchange, distribution fall under microeconomics.
Macroeconomics Deals with the Aggregate at the level of the country as a whole like aggregate demand and aggregate supply of all goods and services in the economy . In Macroeconomics, we study the factor that determine production function, consumption function , theories of employment, monetary policy, fiscal policy and so on.
Nature of economics:
All the economists have no single view about the nature of economics. Some Economists have taken economics as a science and other have taken it as an art.
1.Economics is as a science:
Science is a systematic and comprehensive body of knowledge. It tries to establish cause and effect relationship between the different variable. Generally, Scientific studies are a systematic body of knowledge. It establishes cause and effect relationship, laws with universal application and laws are derived from experiment. Many economic laws, like scientific laws, establish cause and effect relationship. for example, the law of supply states that the quantity supplied of a commonly varies directly with its price. A change in market price leads to change in quantity supplied . Here , a change in price is a cause and the change in quantity supplied is the effect. We can observe them practical experiment. Similarly, the law of diminishing marginal utility, law of demand the law of variable proportion are based on cause and effect relationship. These laws are universally accepted and they are derived from experiment. Thus economics is a science as any other science.
Economics is an art:
Art is concerned with the way of solutions to practical problems. It teaches How to solve practical problems . Art means creation of new things from human mind. Basically creation of new plans, policies and programs is highly essential in analyzing the issues of economics such as poverty alleviation, inequality reduction and so on . Problems related to poverty and inequality cannot be solved by scientific method but by preparation and effective implementation of plans and policies related ti those issues. Those success if such economic plans and policies resets upon human skills. experence , knowledge and efficiency which are known as subject of art. Hence economics is an art.
Important Questions papers to get pass in exam 2068-2069-2070 old question papers hseb
- What is mean by economics?
- origin of economics