Way to economics 02

Way to economics 02

Basic economic problems and the alternative ways of solving the basic economic problems in an economic system

People of a society have various needs and these needs can be classified as a
physical and as mental needs.
 The needs that can be directly fulfilled by the consumption of goods and services
are called physical needs.
Example: Foods, shelter, cloth
 There are mental needs that cannot be directly fulfilled by the consumption of
goods and services
Example : spiritual development love, kindness
 The activities and behaviours performed by people to fulfill physical needs and
wants of a society using limited resources are called economic behaviour.
Example: Goods and services production, distribution and consumption
 People of a society have various behaviours economic studies economics behavior
of people.
 Since the economic theories and principles emphasized in economics are based on
scientific method it is considered as a science.
 Main factors which differ economics from other natural sciences are given below.
 Economic behaviors of people are examined by economics.
 Economic theories developed cannot be proved at laboratories
 Theories of social sciences like economics cannot be formed similar to rigid
theories formed in natural sciences as economic behaviors are sensitive to
factors such as time, region and social environment.
 Economic facet studied under economics means the human behaviors relating to
production, exchange and consumption.
 Economics studies how people behave in solving the struggle between peoples’
unlimited desire to own goods and services and limitedness of resources to
produce goods and services.
 Economic facet deals with a broader subject area in human society and most of
burning issues faced by the man will be an economic nature..
 Due to this reason Economics is considered as the queen of social sciences.
 Every economic activity considered in economics is related to goods and services
production, distribution and consumption.
 The subject field of economics studies how society acts towards to fulfill their
wants by consuming goods and services and how they make decisions in order to
live a better life

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