Classification of Economics

 

Classification of Economics:

There are following two types of Economics

i. Theoretical Economics

 ii. Applied Economics

 1. Theoretical Economics:

                                                                  In this part we discuss characteristics of various economic systems, and also define different economic theories. Basic laws we derive by observing facts, based upon neutral inquiries and studies. Such as law of demand, law of supply, law of diminishing, Marginal ability utility, law of equi-marginal utility, law of increasing and decreasing returns etc. We observe behavior of individuals in different sectors of the economy Such as entrepreneurs behavior in business and production sector while consumers behavior in consumption field. Moreover, the activities and performance of different economics, social and cultural organizations are also kept before.

 2. Applied Economics:

                                                          The laws and principles described in theoretical economics, when implemented on the specific conditions of any country, to solve its economic problems are called applied economics. In this branch we take detail view of all the resources of any country and sort out the ways to fully allocate them. Moreover, economic problems of various sectors are discovered and practical remedial measure are opted to solve them. For example, after taking detail view of efficiency of Pakistan economy's largest sector i.e. agriculture sector. We conclude that per acre yield is less due to

 1) Less use of fertilizers.

2) Shortage of quality seeds

3) Illiteracy and old method of production

 4) Problem of water logging and salinity

 5) Insufficient irrigation facilities

 6) Fragmentation and sub-division of land holding. To increase per acre agricultural yield, some practical steps are taken to implement experts’ recommendations. Such as:

 1) Fertilizers, either produced or imported, are distributed through dealers.

2) Agricultural supply corporation manages to supply quality seeds.

3) Agriculture Development Bank (ADB) and other commercial banks provide loans for fertilizers, seeds and agricultural tools; Government agriculture department gives valuable advice to cultivators to prevent worms and insects. Hence, to sort out the causes of problems and to enhance the efficiency of any sec to prescribed steps when practically taken are the part of applied economics.