1. Economics is Pure or Applied Science?
A pure science furnishes tools and applied science works with these tools.
Similarly, Economics as pure science, formulates various laws and applied
economics applies them in practice in solving various problems. Robbions and all
others before him treated economics as a pure positive science. But recently,
applied economics assumed greater importance. As pure science and applied
science go hand-in-hand, so Economics is also pure as well as applied science.
The scope of economics means the limits or boundaries of Economics. According
to Adam Smith and A.C. Pigou Economics studies the causes of material wealth.
They gave a very narrow scope to the study of economics by limiting it only to
those activities relating to wealth. According to Prof. Marshall, “Economics is a
study of economic activities of a man. It is only concerned with the wealth getting
and wealth-using activities of a man,” Prof. A.C. Pigou also restricted the scope of
economics to the study of economic welfare.
Robbions finds the welfare definition of economics rather restrictive as it excludes
non-material things from its scope. Services of doctors, teachers, lawers, domestic
servants etc. are scarce and satisfy wants in our daily life but they are non

2. material. Similarly, all economic activities are not conductive to economic welfare.
For example, the activities of manufactures of liquors and opium are opposed to
welfare. Economics studies how wealth is generated, exchanged, distributed and
consumed. Exchange includes determination of value of commodities, money,
banking, international trade, foreign exchange etc. In distribution we study the
determination of rent, wages, interest and profit. We study the factors that
determine a country’s national income, savings, investment, output and
employment and these factors promote economic growth. The growth with stability
forms the subject matter of modern economics.