Economics has evolved in centuries due to the increasing problem of scarcity of resources.
To understand the scope of economics, we need to understand why we need economics.
The main aim of the subject is to maximize the efficiency of how we use the resources present.
The term economics itself is derived from the terms, i.e. economy and science. It means the science of the economy or the science of proper utilization of the resource.
Before we go in deep to understand the scope of economics, we must briefly see what are the top opportunities. Check out our article on Career Options in India after Bachelor in Economics to know more.
This is one of the best part-time jobs which you can do and earn a good amount of money.
An average income of a subject expert at Chegg is Rs.30k to Rs.50k.
Schools and colleges teach economics from basics to masters. The scope of economics in the teaching field is vast.
To land a government job you can give the exam conducted by UPSC. The age range is 21-30 years. You must have completed M.A or M.S.C with at least 55% marks.
They study how the market works by studying the market trends, and preferences of customers. They also study on what factors these preferences depends.
This research helps businesses in identifying the target customers, ways to advertise their products and services.
Eg- BLS(Bureau of Labour Statistics) predicted that by 2028 the employment in this field will increase by 20%.
Investment companies, credit card companies, investment and commercial banks and credit rating agencies need credit analysts.
A credit analyst analyzes the credit score or creditworthiness of organizations and individuals. This help them in getting loans and making investments.
The median salary earned by credit analyst in May 2019 was $73,650, data by Bureau of Labour Statistics.
A business writer writes proposals and plans for a company. They also report the financing, stock markets or other economic happenings for publications.
A good business writer requires to be good at research and writing skills as well.
Economic consultants study market trends with high research and analytical skills.
They analyze different market trends and help organizations and individuals in promoting their businesses.
Banking Services are also a great career path for economics graduates.
These are some of the significant jobs available in the field.
The classical view of economics.
“Science of wealth” this is what classical economists defined economy. They considered only the science which deals with material wealth as the scope of economics. All the services were out of the scope of economics.
Now, let’s look at how different classical economists took economics differently:
Due to some points, people highly criticized classical economics:
Economics under this viewpoint is defined as the science of material welfare.
The author of the leading textbook “ The Principles of Economics”, the Alfred Marshall, led the neo-classical economists. It helped economics gain a respectable place in the social sciences.
Wealth here is not regarded as an end to itself but as the means to the end. The economy is taken here as the source of human welfare.
Scope of economics to neo-classical viewpoint considers all the activities that promote economic welfare for the society as a whole.
According to him, the scarcity of resources is the reason for economics.
Lionel Charles Robbins gave this concept. Economics is a human science which involves the best use of scarce resources so that the society is satisfied.
With the scarcity of resources and maximizing the satisfaction comes into the picture, the various alternatives to the resource.
It doesn’t distinguish between material and non-material. It considers all the economic activities given that it satisfies the want of humans.
Due to some points, this theory was also criticized:
This scope of economics is unable to see the economic problems of the real world. Hence, it can only be applied to a fully employed economy.
“Economics is the study of how people and society end up choosing, with or without the use of money, to employ scarce productive resources that could have alternative uses to produce various commodities over time and distribute them for consumption, now or in the future, among various person or groups in the society”
It includes all the improvements till Robbins definition, along with it:
Economics is a social science which analyses how society maximizes the gains from the limited, scarce resource present.
In a broad sense, economics is the study of everything related to wealth and value. The generation, distribution and consumption wealth via different material and non-material activities.
Economics is a social science which deals with the wealth generation to satisfy humans using scarce resources.
It also involves markets, mechanism of income and the distribution of wealth and income.
The study of modern economics is divided into two parts-
This branch of economics is concerned with individual consumers, industries, firms, commodities etc. It is also known as price theory. It assumes that there is full employment, which is also its drawback.
This branch focuses on the impact of choice on aggregate level such as the level of employment, national income etc. The main limitation is obvious that it doesn’t consider the individual welfare. It only focuses on the society as a whole.
Both classical and neoclassical has a different opinion about it.
Classical economists say economics is only the study of cause and effect and hence is not the science.
Neoclassical economists along with modern economists consider economics as both science and art.
The scope of economics covers all the central issues faced by society today. Eg- economic growth, poverty, pollution, productivity, monopoly, unemployment, inflation etc.
Economics is a social-science based on problems and it is concerned with all the central problems of our modern world.
Here economists mean to say that no doubt economics is an art as well as science.
Positive Science – It creates a relationship between cause and effect, what it is and examining its cause. The aim is to set rules. It is beyond good or bad, or any other value judgements.
Normative Science – It represents what ought to be. It is simply the art of reasoning and opinionated reactions. The aim here is to form ideals. Here we can talk about ethics, value judgements etc.
All the questions related to what should be, what ought to be, what must be etc. fall under this.
Both sciences play important roles in forming the economics. Positive science finds out what it is and why it is and sets the rules. The normative science helps to judge whether it is good or bad i.e. in passing the moral and value judgements.
These are the basic terms, concepts involved in the scope of economics.
There are many options to choose from, this is an issue which arises due to scarce and unequal distribution of resources.
It comes into the picture because of the unequal distribution of demands all over the globe.
The government promotes certain things to be produced in certain locations.
This refers to minimizing cost and maximizing production by selection from the list of techniques to produce goods.
The selection of a technique depends on various factors and the product or service to produce. Eg- weather, climatic conditions, budget, production amount, government policies, the technology available etc.
The goods and services produced in the economy present must consider who are their consumers. A poor or under-developed country’s government will focus on production differently than a developed one.
The goods produced are for the people of which class?
Which demographic group is the target?
The target customer is one of the most important parts to decide when studying the scope of economics.