What is Economics Laws:

What is Economics Laws:

Law = Rule of conduct

n A Laws expresses the casual relationship between two sets of phenomenon.

n According to Prof. Tugwell, “A Law is summary of observed relations”

nAccording to Marshall, “The term law means nothing more than the general

proposition or statement of tendencies more or less certain, more or less

definite.”

Types of Laws:

1) Statutory Laws

2) Social Laws

3) Moral Laws

4) Procedural Laws

5) Scientific Laws (relationship between cause and effects.

Economics Laws: (Neither statutory nor social nor moral.) They are scientific laws because they establish relationship between economics causes and their effects.

For example:

Law of Demand states, “When the price of a commodity rises its demand is likely to

contract.”

According to Marshall, “Economics Laws or statements of economic tendencies are

those social laws which relates to branches of conduct in which the strength of

motives chiefly concerned can be measured by a money price.”

According to Robbins, “Economics Laws are statements of uniformities which

govern human behavior concerning the utilization of limited resources for the

attainment of unlimited ends.”

Features of Economic Laws (Nature)

1) Economic Laws are Human Laws: It’s all about the expected human behavior

of Economic Units such as consumer, producer, employer, employee etc. Under

given circumstances.

2) Statements of Tendencies: It states tendencies of relationship between two

phenomena. For Example, law of supply states that with fall in price supply is

likely to fall but it does not claim categorically that fall in price must be followed

by fall in supply.

3) Generalisation: It does not explain any particular phenomenon, rather they refer

to the general features found in all phenomenon. For Example; Use of salt-does

not comply with the law of demand.

4) Economic Laws are Positive: It states that how men will behave under given

circumstances or how they are likely to behave but does not impose any

restriction as in the case of statutory, moral & social laws.

5) Economic Laws are Hypothetical: Because they too assume that other things

being equal. Law of demand.

6) Economic Laws are abstract: (Summary) It does not deal with particular

phenomenon.

7) Economic Laws are relative: When the given conditions undergo a change,

there is a change in economic law as well.

8) Economic Law are Uncertain

9) Economic Laws are axiomatic: does not require any proof.

10) Some Economic Laws are universal: Supply & Demand.

11) Economic Laws are qualitative: They tell us about the direction of change,

rather than its exact increment in quantity.