Current economic models developed out of the broader field of politicaleconomy in the late 19
century, owing to a desire to use anempiricalapproach more akin to the physical sciences.
A definition that capturesmuch of modern economics is that of Lionel Robbinsin a1932 essay : "thescience which studies human behavior as a relationship between ends andscarce means which have alternative uses."Scarcity means that availableresourcesare insufficient to satisfy all wants and needs. Absent scarcity andalternative uses of available resources, there is noeconomic problem. Thesubject thus defined involves the study of choicesas they are affected by incentives and resources.Economics aims to explain how economieswork and how economicagentsinteract. Economic analysis is applied throughout society, in businessandfinancebut also incrime,education, thefamily ,health,law ,politics,religion,social institutions, war,scienceandresearch. The expandingdomain of economics in thesocial scienceshas been described aseconomicimperialism.Common distinctions are drawn between various dimensions of economics: betweenpositive economics(describing "what is") andnormativeeconomics(advocating "what ought to be") or between economic theory and Applied economicsor betweenmainstream economics(more"orthodox" dealing with the "rationality-individualism-equilibrium nexus")andheterodox economics(more "radical" dealing with the "institutions-history-social structure nexus"). However the primary textbook distinctionis between microeconomics ("small" economics), which examines theeconomic behavior of agents(including individuals and firms) and"macroeconomics" ("big" economics), addressing issues of unemployment,inflation, monetary and fiscal policy for an entire economy.
Scope of economics
Several definition of economics have been given. For the sake of conviencelet us classify the various definition into four groups:-