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Economicsis study of how individuals and societies decide using the rare resources, which are given to them by nature and previous generations. In broad sense, it is kind of behavioral science, which studies individual as well as societal choices. Economics is everywhere and it is strongly connected with our everyday life. So, what is scope of economics?
Scope of economics
It is one of the fundamental terms in the observed science. Economics has very deep roots and ties in most modern problems of every society and global. Besides, it is connected with social philosophy. This fact makes the discipline quite broad and deep. Scope of this science includes the following points:
- Social sciences. It deals with people’s economic activities. Its subject matter in this case is everyday money earning/spending activities.
- Resources,which are necessary to satisfy wants. It includes their availability and ways of application. One of the great economists, Adam Smith, has called it Science of Wealth.
- Unlimited people’s wants. At the same time, the resources are scarce. Thus, economics discusses how individuals can receive maximum satisfaction by the use of scarce means. It happens on basis of priority. That’s why scarcity of any resources is considered extremely important.
- Wants are connected with production, exchange, distribution, and consumption. Besides, currency, banking system, public finances, and trade are also parts of its activities. It is essential how economic development of a certain country is achieved by means of economic planning as well.
- Economic problems, activities, and proper solutions. Value judgment of human actions and behavior is also of importance.
The main divisions of economics are microeconomics and macroeconomics.
Scope of microeconomics
It studies individual decision and the behavior of their makers. Microeconomics observes factors, which affect individual choices. Besides, it examines how those choices of different decision-makers are connected with markets. In other words, it explains how price and quantity of particular product interact, determine each other, and then come to balance.
Scope of macroeconomics
It is connected with overall behavior and performance of whole economy and not just its markers. Everything happening in economy is the result of many individual decisions. Thus, macroeconomics puts all these tiny pieces (which are subjects of microeconomics) together and finally focuses on larger picture, including national and global levels.
Economics is an important thing in our life. We deal with it every day. There are various levels of it and different parts of the science are responsible for particular issues.