Economics as a science

Economics can be called a science. It has many laws like the physical sciences. The economist observes the behaviour of man while engaged in his daily economics activities. The observations and data collected can then be classified, and form the basis for generalisations and the formulation of economics laws and principles. For example, the first law of demand and supply states that the higher the price the lower the quantity demanded. This is because it has been observed that there is the general tendency for people to buy less if the price rises. The validity of economics laws can be tested by applying them to real situations.

In trying to formulate economics laws, the economist makes some basic assumptions like the physical scientist, although these assumptions are sometimes unrealistic.

Economics as a science is different from the physical sciences. The physical sciences deal mainly with inanimate matter which can be easily controlled under laboratory conditions. But economics deals with human behaviour. Human beings have feelings and their behaviour is unpredictable.

Different individuals may behave in different ways under identical conditions. Unlike the types of matter dealt with by the physical sciences. Most economics laws are statements of tendencies, that is things that are likely to happen, and their validities depend on certain pre-existing conditions. The law that states the higher the price the lower the quantity demanded may not be universally true. The law may not hold true, for all persons, at all times. The law is based on the basic assumption made in economics that human beings always behave rationally.

However, economics is not a natural or pure or physical science, but a social science.