What Is Economics and Economy ? / Difference Between Micro And Macro Economics./ What Is Positive And Normative Economics?- infotech9213

What Is Economics?  

Economics is the study of scarcity for how limit resources utilize in this way in which the consumer maximize their satisfaction, producer maximize their profit and society maximize their social welfare. Human wants are unlimited and resources are limited the science that tells us how to use our limit resources to achieve maximum satisfaction (output) is called economics. 

Adam Smith is called as father of economics. His book is about the causes of wealth of Nation is the first book on economics.

Because this was the first book in which economics was presented in a systematic and organized manner.

ECONOMICS PROBLEM:-

It is the problem of choice which arises due to the following reason.

1. Resources are limited.
2. Human wants are unlimited.
3. Resources have alternative users.

What Is Economy ?

It is a system of consumption , production and distribution through which people earn their living. 

In other word economy is a system which exist in an area which show the nature and level of economic activity and also show that how the people of that country earn their living.

BRANCHES OF ECONOMICS.

There are two types of branch of economics.

• Micro economics
• Macro economics

Micro Economics:- It is that branch of economics in which all economics decision are taken on the basis of individual level. e.g. A person of the firm or family. etc.

Macro Economics:- It is that branch of economics in which all economics decision are taken on the basis of aggregate level, (National level).e.g. Issue of macro economics like poverty, National Income, aggregate demand and supply.

DIFFERENCE BETWEEN MICRO AND MACRO ECONOMICS.

Micro Economics:-

• Micro economics is the study of all economics problem at a individual level. like individual consumer, individual producer and market.
• Micro economics objective is to determine price and output of an individual firm.
• It guides individual planning.
• while studying micro economics, macro variables are kept constant.

Macro Economics:-

• Macro economics is the study of all economics problem at aggregate level. like national income, employment, govt. budget, etc.
• Macro economics objective is to determine general price and total output of economics.
• It guides National planning.
• while studying macro economics, micro variable are kept constant.

What Is Positive And Normative Economics?

Positive Economics:-

It is that branch of economics which describe "What is the problem" on the basis of facts and data,  for e.g. in India 25% people are living (below poverty line.) In India 3 crore. people are unemployed.

Normative Economics:-

It is that branch of economics which suggest "What ought to be" for economic problem that is providing suggestion to solve the problems. for e.g. Govt. started Employment program for unemployment evaluation.

Difference between positive economics and normative economics.

Positive Economics:-

• It is describing about the problem that is "what is the problem".
• It tells things "as they are".
• It is based on facts and data can be verified.
• It tells us the actual state of the economy.
• It's accuracy may be check out, that is data may be true or false.

 Normative Economics:-

• It is providing suggestion to eliminate the problem that shows "what ought to be".
• It tells" what should be".
• It is based on wishful thinking or future planning and can not be verified.
• It is used for planning.
• It's accuracy can not be check out, these are only solution/ suggestion.

Related Topics

What is Demand Function and its types?/ Law of Demand/ Assumptions of law of Demand class 12th.

What Is Demand In Economics? class 12th/ Demand Schedule/ Demand Curve