Introductory Microeconomics: Meaning of Economics and Positive Science

Definition of Economics: Economics is defined as a social science that investigates the methods by which a society elects to utilize its limited resources. These resources must possess alternate uses. The primary objectives of this study are the production of goods and services and their subsequent distribution among various groups of individuals within the society.
The Concept of Scarcity and Choice: At its core, economics is centered on the act of making choices in the environment of scarcity. It serves as a study of human behavior, specifically focusing on the relationship between:
- Ends: These refer to human wants, which are generally considered unlimited.
- Means: These refer to resources, which are limited or scarce.
Fundamental Objective: The primary aim of economics is to ensure that resources are utilized in the best possible (optimal) manner.

Defining Science: The term "Science" refers to any systematic and organized body of knowledge. Economics qualifies as a science because it involves the systematic and organized study of the economic behavior of human beings.
Categorization as a Social Science:
- Economics is distinct from "exact sciences" such as Physics and Chemistry.
- The distinction arises because economics deals with the study of human behavior, which is inherently less predictable and more complex than the physical laws governing exact sciences.
- Due to this focus on human behavior, it is specifically classified as a social science.

Nature of Positive Economics: Positive economics is the study of the "facts of life." It is concerned with "things as they are." It deals strictly with identifying what economic problems exist and how they are actually being solved in the real world.
Focus of Positive Statements: These statements describe three states of circumstances:
- What was (past).
- What is (present).
- What will be (future).
Value Judgments: Positive economics does not pass any value judgments. It remains objective and descriptive rather than prescriptive.
Examples of Positive Statements:
- "India is an overpopulated country."
- "Prices are constantly rising."

Neutrality Between Ends: Positive economics remains strictly neutral regarding ultimate ends. It avoids making judgments on whether a particular outcome or end is desirable or undesirable.
The Robbins Perspective: According to Robbins, economics should not be concerned with moral or ethical questions. An economist's role is to analyze things as they are without exercising a right to give judgment on the morality of the subject matter.
Illustrative Example (Cigarettes):
- A positive economic theory might describe the fact that the manufacturing and sale of cigarettes is injurious to health.
- However, that same theory will NOT provide instructions, judgments, or policy advice on what "ought" to be done to avoid cigarettes in an economy.

Distinction from "Statements of Truth": It is a common misconception that positive economic statements must be true. A positive statement can be either true or false.
The Population Example (Paras vs. Saksham):
- Paras states: "India is the most populated country in the world."
- Saksham states: "China is the most populated country in the world."
- Both of these are considered positive statements because they deal with "what is" and avoid value judgments.
- In this scenario, Paras is factually wrong and Saksham is factually right, yet both statements remain part of positive economics.
Verifiability: The identifying characteristic of positive statements is that they can be verified as true or false by comparing the statement against actual data and empirical evidence.