Nature of Economics | HSEB Notes for Management Students Class 11

Economics

HSEB Notes on Nature of Economics

Class : 11

Economics is science or art

Economics is a science because it is a systematic body of knowledge which helps to collect or analysis the fact. It also shows the relationship between cause and effects which gives principal and helps to explain. On the other side, economics guide us to achieve to certain goals. For example: it refers to increase the production to reduce the poverty. That means it also prescribe formula for achieving desired object and also provide solution. Hence, economics is science or art.

Economics is a social Science

Economics is a social science because it studies human beings living in the society. It also decide what, how and when to produce? Economics does not study on isolated person because he is not worried about economics problem. According to Robbins economics is not a pure social science because it also studies individual behavior. However, the majority of economist in the favor ofMarshallviews.

Economist is positive and normative

Positive science explains causes and effects. It does not says what is good and what is bad, for example when the price falls demands increase and vice-versa. That’s why it can be said it never gives the value judgment. On the other side normative science explains what is good and what is bad. It is based on the system of value of judgment.

Limitation

Money is the measuring rod of economics.

Economics is related with wealth and wealth is using activities.

It studies normal behavior of the human beings.

Economics laws are not exact like pure science.

Economics generally use the term, “other things remaining the same”.

Economics is not a complete science but it is only a part of science.

Importance of Micro-Economics 

Efficient Allocation of Resources

Micro economics teaches how consumer and producer take decision to allocate the resources. It suggests achieving the objectives by using limitation resources.

Useful in business decision:

Micro economics is useful for making mechanism because it guides the business man to analysis of the demand, price, production etc.

Study of human behavior:

It studies every human behavior by analyzing law of diminishing marginal utility, consumer surplus etc. It also helps the products in the process of production.

Examines the condition of welfare

Micro economics is important for both sector lie positive and normative economics. It not only tells how it operates but also says how it should be operated to promote the welfare.

Formulation of public policy:

Micro economics helps to formulate different government policies such as public finance, international trade policy etc. These all helps to formulate government policy.

Don't forget to LIKE and Share it. Please Join with us on Google+ and Facebook.