Economics is regarded by numerous economists as a science. This reality is even seen in the definitions of John Stuart Mill, Davenport and Teacher Lionel Robins. In the light of this, it will be appropriate to talk about the view that economics is a science.
Science may be defined as knowledge acquired by observation and screening of fact in an organized manner. Economics is considered as a science since it makes use of certain approaches, which techniques are also utilized in the physical sciences such as physics and chemistry, in explaining and observing a phenomenon. Financial experts observe financial occasions; effort to discover patterns in them; create theories about them, check their theories and finally use them.
The financial theorist first of all, observes the event about which a theory is to be built. The economist does this by gathering the relevant data about a phenomenon. Federal government agencies, business firms, surveys are some sources and indicates by which data could be obtained.
The economist then tries to find consistent relationship in the data they gathered. This is done by arranging and examining the information. The relationship discovered, allows the formula of economic theory, which if it is to be helpful, describes certain kinds of financial event. An economic theory is a generalization, based upon a range of facts, about why or how an economic event takes place.
The theory formulated needs to be tested. This is to make sure that extra information does not oppose it. A normally allowed economic theory can be used to forecast the result of specific economic events. The law of demand is an example of an economic theory. It mentions that as the rate of item falls, the quantity required of the item increases, other things being equal. It might for that reason be presumed that if the cost of shoes falls, ceteris paribus, people will purchase more shoes.
Economics, though a science, is thought about a social science. This is since it studies human habits. Economics is also a favorable science because it says things as they are and not exactly what the y ought to be. Economics is not as accurate, in regards to its conclusion, as the pure sciences. This is due to the fact that economics handle human behaviors which to some extent are unpredictable.
ECONOMIC SCARCITY AND OPTION
Economic deficiency suggests limitness of resources in supply relative to the demand for them. There is scarcity of all resources– land, capital, labor and enterprises. This suggests resources remain in amounts smaller sized than the demand for them. Due to the problem of deficiency, items an services required by human beings to please our numerous wants are reasonably scarce. This is due to the fact that society can only produce restricted quantities of goods and services with the restricted resources.
The resources, nevertheless, though scarce, have alternative usages and can be integrated in different percentages. With the alternative usage to which limited resources can be put, selections should be made. Shortage therefore gives rise to choice.
Choice might be viewed as the act of selecting from options. If resources were utilized for only one purpose, there will not be any choice decision-making by the individual, companies, and federal governments. At all levels of option decision-making, a scale of preference could direct one making the best selection. This is an arrangement of needs (wants) of the person in order of importance or top priority, with the most important needs on top of the scale of preference.
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