Session Objectives: To understand the nature and scope of economics.

The focus would be on the definitions and classification of economics, relevance of microeconomics, significance and limitations of microeconomics, scarcity and choice and answering the fundamental issues of what, how and for whom to produce to make the best use of economics. The focus is on how the basic questions of economy i.e. what, how and for whom are answered in different economic systems. The differences between various economic systems shall also be seen. How production is optimized with the help of the production possibility curve and analysis of PPC with full utilization of resources and when there is a technological development. The concepts of partial equilibrium and general equilibrium analysis are also discussed. The session is concluded with how various economic factors influences the business. Definition & Classifications of Economics All the definitions of economics, focuses on two

aspects, scarce resources and unlimited wants. For Example: A piece of land, which is a limited resource, can be utilized for any economic purpose, like agriculture, industry, housing, etc. There is no dearth of its usage, but the area of land is limited. So a rational economic choice has to be made. Therefore, economics explain day to day economic activity of an individual, firm or a nation. Economics can be viewed as a science or as an art. Further, it can also be classified as pure economics and applied economics, or positive and normative economics. A broad classification of economics can be done by dividing economics into micro and macro economics. Is Economics a Science or an art? Economics can be viewed as a science or as an art. A science must be capable of formulating laws explaining the circumstances under which a particular result can be achieved, and also the change in the result due to changes in the variables. If economics is a science, why does it fail to......

predict the future course of events like

unemployment and price fluctuations

predict how an individual reacts in a particular situation

quantify the economic variables in all the situations. As many a times, economic decisions are based on human attitudes and emotions.

As economics deals with the wants, needs and demand of human beings, it is sometimes defined as an art. Art is a system of rule for the attainment of given end. J. M. Keynes An art, like a science, is a systematized body of knowledge; however, unlike a science, it provides specific solutions to specific problems.

is a systematized body of knowledge provides specific solutions to specific problems

is more practical than science

Applied and Pure Economics Some economists categorize economics into pure economics and applied economics. Well known economist Professor Bye defines a pure science as one that furnishes the tools with which applied science works. The two go hand-