Economic Laws Characteristics
The chief characteristic of economic laws is -
(1) Economic laws are statement of tendencies - Economic laws are mere statement of economic tendencies; that is they are less exact. Economic laws represent certain economic tendencies or principles expressing what are likely to happen, other things remaining the same. They are not exact likely the laws of natural science.
(2) Economic laws are about human beings - economics is a social science a study of man. Its laws relate to human beings acting as producers, consumers, employers and workers.
(3) Economic laws are hypothetical - Natural laws lay down precise laws. The law of gravitation is an exact statement and it is used for many mathematical calculations. It states that stone thrown up will fall to the earth.
Economic laws are the statement 'other things being equal'. In practical life other things are not equal and, therefore, the validity of the laws of the people increase, it is possible that the demand may go up even if the prices increase.
(4) Economic laws are sometimes axiomatic - Some of the economic laws are so obvious that they need not be stated. They may be taken more of all the commodities desirable for him.
(5) The laws of economics are relative - economic laws time to time and place. Change from For example the rules of currency and banking rules of one country. Thus, economic laws are historico-relative or institutional.
However, this attitude is not wholly correct.
(1) Many laws of economics like the laws of consumption, demand and supply etc. are universal, acceptable in all places and times.
(2) Robbins said that it is dangerous misapprehension to call economic generalizations as historico-relative. While adopting economics laws we should bear in mind the historico-relative assumptions, under which the laws will turn out with precision.
(6) Economic laws and biological laws - Physical laws are claimed to be precise, universal and ultimate. Biological laws are much less exact than physical laws. In experiment plays a smaller part in biological laws and confirmation of result may be difficult. Basic laws are apparently absent in biology. Economic laws resemble biological laws rather than physical laws.
In short the characteristic of economic laws is that they are qualitative in nature and not exactly stated in quantitative terms. They tell the kind or direction of changes which is expected rather than the amount of change.
Economic laws are based on the following two important assumptions:
1. Other things remaining the same: all the economic laws have the phrase, other things being equal or other things remaining the same. It shows that economic law will apply only at certain place and in certain situation. For example, the law of demand will apply only if the income of the consumers, their tastes and the price of substitutes do not change.
2. Rationally of human conduct: economic law presume that the consumers are rational. They will spend their resources in such a manner that they may get maximum satisfaction.
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