ECONOMICS INTRODUCTION (For 11th Commerce Maharashtra State Board HSC]

We will start learning economics with one simple statement

“Economics is a social science”

  • Hence to understand this statement we first must understand what “social science” is and to understand what “social science” is we first must know what “science” means.
  • (*To understand this statement, we will first understand what social science is and then we will look at the meaning of economics and then we will be able to connect why economics is called as social science or queen of social science)
  • Science: Science simply means systematic body of knowledge.
  • Wherever the systematic knowledge is available that subject or that theory becomes science. Science get divided into two sections Natural Science and Social Science

Natural Science:

1. Natural science is one who’s laws are universally applicable
2. Validity of these laws can be tested in a laboratory under controlled conditions

For example: – Physics.

Law of gravity is one of the laws of “physics” which is a natural science, if you drop a pencil then that pencil has to fall below. This fact is same all over the universe.

Other examples of natural science are

Social Science

1.Social Science is related to one or the other aspect of human behavior
2. The laws of social science are not universal but just statements of human tendencies

For example: – Psychology

Psychology is a social science and it is related to mental aspect of human behaviour. And the mentality of every person is different hence laws of psychology are not universally applicable

Now we know that social science is the science which studies about some or the other aspect of human behaviour. Now once we know the meaning of economics then the idea of economics being social science will get clear.

Other examples of Social science are

1.History

2.Psychology

3.Sociology

And most importantly Economics

Economics

1.Economics deals with how human beings satisfy their unlimited wants with limited resources. And we make these choices at every moment in life. 
2.Here we can see that economics deals with one of the aspects of human behaviour and we can call that aspect as economic aspect.
3.Economics fundamentally studies people and choices they make.

The wants of human beings are always unlimited and resources to satisfy them will always be limited.

Let’s use another word for limited resources – scarce resources

(scarce means deficient in quantity or number compared with the demand,which ultimately means limited resources)

Let’s understand all of the above three points with example

Suppose Ram has birthday today and he got Rupees one thousand as a gift from his father and as soon as he gets the money his head is filled with unlimited options of spending that money, like

  1. Watching a movie
  2. Purchasing a gift for himself
  3. Giving party to his friends
  4. Purchase something else

And many more things, but it is quite obvious that he cannot fulfil all his desires in the given amount so he has to choose between the options and fulfil only those desires which will fit inside the budget of Rupees One Thousand.

By looking at above example and its explanation can we call

  1. All his desires and wants as Unlimited Wants
  2. Rupees One Thousand as Limited Resources
  3. His behaviour of choosing between the options as Economic Behaviour
  4. Science that studies the above-mentioned behaviour as Economics

And if we recall properly from the above paragraphs social science is a science which studies about some or the other aspect of human behaviour and Economics does the same thing, it studies about the economic aspect of human behaviour.

And after all this discussion finally we know for sure why

“Economics is a social science”

Origin of the word Economics

Now let’s move on to the next question at hand – “From where the word Economics has originated”

The English term ‘Economics’ is derived from the Greek word ‘Oikonomia’. Its meaning is ‘household management’.

Economics was first read in ancient Greece. Aristotle, the Greek Philosopher termed Economics as a science of ‘household management’.

The meaning of economics was simple at that time but the then also the crux of economics was intact, being all about study of Human Behaviour.

According the Greek work ‘Oikonomia’ Economics is a science which studies about the behaviour of a person towards decisions to manage his house hold.

But with the change of time and progress of civilization, the economic condition of man changed. As a result, an evolutionary change in the definition of Economics is noticed. There are many authors and scholars who gave wider definitions of Economics after that, which we will study in coming sections.