ECONOMICS AS

APPLIED SCIENCE

Prepared By : SITTIE ALIAHNAH D. SARIP

 DEFINITION

JEAN BAPTIST-SAY:
Say's law of markets is a classical economic theory that says
that production is the source of demand. According to Say's
law, the ability to demand something is financed by supplying
a different good.

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JOHN STUART
MILL
The science which traces the laws of such of
the phenomena of society as arise from the
combined operations of mankind for the
production of wealth, in so far as those
phenomena are not modified by the pursuit
of any other object.

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 WHAT IS THE
IMPORTANCE OF APPLIED
ECONOMICS
1 APPLICATION?
Applied
Economics
The purpose of applied economics is
to improve the quality of practice in
business, public policy, and daily
life by thinking rigorously about costs
and benefits, incentives, and human
behavior.
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“
Economics can be applied in daily
life by buying and selling goods.
Economics helps us in studying the
past, future, and current models and
apply themes to societies,
government, businesses, and
individuals.

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3 ECONOMIC THEORIES
OF APPLIED
ECONOMICS

╸ Keynesian economics
╸ Malthusian economics
╸ Classical economics

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Kynesian Economics

The central idea of Keynesian thought is that aggregate

demand doesn't inherently equate to the productive capacity
of an economy, but rather that a variety of factors, both
public and private, determine it. With this, Keynesian
economical methods support a system in which fluctuations
in aggregate demand can lead to changes in employment
and output, but not prices.

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Malthusian Economics

Malthusian economics refers to the idea that, while

population growth may be exponential, the growth of food
supply and the supply of other resources is linear. This
theory states that when a population grows over time and
outpaces a society's ability to produce resources, its standard
of living may reduce and trigger a large depopulation event.

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Classical Economics
Classical economics is an area of thought
established by early economists and
political thinkers Adam Smith, John
Stuart Mill and others. The primary
theory of classical economics states that
market economies are, by definition, self-
regulating systems that are ruled by the
laws of production and exchange.

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REFERENCE

Clay, H. (2021). Jean Baptist Say theory on economics

Kristen, S. (2021). Jean Baptist Theory
Bye, R. (1939). John Stuart Mill
Coase Ronald, S. (1978). Theory of John Stuart Mill
Dow Shiela C. (2002).Theory on Economics ; John Stuart
Indeed Editorial, T. (2010). 11 Types of Economic Theories
Aspiring Economists Should Know

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