Explain the characteristic of economic laws and Discuss importance of studying economics?

Economics like other subjects has its own set of generation or loans. In everyday life, we see man is always busy in satisfying his un-limited wants with limited means. In doing so, he acts upon certain principle. These principles which an average man follows, when he is engaged in economic activity are named as “economic laws”.

Following are the main characteristics of economic laws:

1.                 Lack of exactitude:

The nature of economic laws is that they are less exact as compared to the laws of pure science, like physic, chemistry etc. the economist cannot predict with surety as to what will happen in future in the economic domain. They can only say what likely to happen in the near future. According to law of demand when price increase, demand will decrease. Here we cannot predict with surety that an rise the price will be followed by decrees in demand.

2.                 Economic laws are hypothetical:

Economic laws are hypothetical as they are based in certain condition. If these conditions are fulfilled wise they will not hold good.

3.                 Economic laws are qualitative not quantitative:

Economic laws are qualitative in nature. They cannot be expressed in quantitative term. The laws of economics only tell the direction of change not the amount of change. E.g. according the laws of demand, the quantity demanded arises inversely with price. We do not say 10% rise in price will lead to 20% fall in quantity demanded.

4.                 Applies on the average in normal conditions:

Economics laws do not deal with any particular. firm, commodity etc. it takes an average economic unit. It also applies in normal conditions.

5.                 Laws of economics are exact than the laws of other social sciences.

importance of studying of economics

The significance and utility of the subject of economics can be judged from the fact that it is now considered to be one of the most important and useful subject as compared to any other branch of knowledge.

The reason of its great importance is that its primary aim is the welfare of mankind.

According to Malthus:

“Political economy is maybe the only science of which it may be said that the ignorance of it is not merely a deviation of good but produces great positive evils”.

It has certain theoretical and practical importance.

1.                 Theoretical importance:

Following are main theoretical importance of studying economics.

                               i.            Broaden outlook:

The knowledge of economics broadens our outlook, sharpens our intellect inculcates in it’s the habit of balanced thinking.

                             ii.            Increases our knowledge:

The study of economics enhances our knowledge. We can easily understand our economic problems. E.g. changes in prices, export and import policy etc.

Practical importance:

The practical importance of economics is greater than its theoretical advantages. These advantages can be looked from individual and community point of view.

1.                 Useful of the consumers:

The study of economics is very useful for consumer. If the consumer knows the principle of economics he can adjust his expenditure in a better way. Acting upon the low of equi-margin. Utility, he can get maximum satisfaction out of his available resources.

2.                 Useful for the producer:

Economics is very useful for the producers. It guides him that how he should combine the four factors of production and minimize the cost of production.

3.                 Importance for a common man:

The study of economics is very useful for a common man. It enables him to understand and exit lies government policies.

4.                 Importance for the businessman:

A businessman can learn the principle of businessman organization. He will be able to plan has business well and taken his business problem successfully.

Importance for the labour:

It guide the labour how they can get maximum wages and useful in all matter for them.

1.                 Useful for finance minister:

Thy study of economics is very important for the finance minister. He has to raise revenue by imposing taxes on the income of the people for meeting the necessary expenditure of the government.

Economics guides him that how he should frame tax policy and monetary policy.

2.                 Poverty and development:

The study of economics helps in removing poverty from the country. developing countries are facing many problems like un-employment, over population, low per capita income etc. economics is immensely important in solving those problems.