SIMILARITIES OF COMMERCE AND ECONOMICS
-Commerce is an important sub-division of the broader subject matter of the social sand analytical science –ECONOMICS.
-Commerce is also referred to as DESCRIPTIVE OR PRACTIAL OR BUSINESS ECONOMICS since it deals with factual or practical element in economics.
-In other words, business refers to the aggregate of economic activities carried on with a view to create, distribute, exchange and possess goods and services essential for human living and elderly progress of the society.
-Commerce studies these economic activities from the occupational point of view and lays down norms for systematically and fruitfully carrying out of the respective occupations e.g. wholesaling, retailing, exporting, importing, warehousing, financing, advertising etc to maximize one’s wellbeing in the background of social relationship and obligations.
-Commerce is concerned with the process of exchange and distribution of goods and services on HOW they are conducted by businessmen who aim to make a profit out of their activities. In this background, commerce is also referred to as descriptive/practical or business economics.
SUBJECTMATTER OF ECONOMICS
-As we have seen, to some extent the two subjects commerce and economics overlap, but the similarity is more superficial than real.
-ECONOMICS is concerned with problems arising from the production and distribution of goods and services.
-ECONOMICS consists of three main divisions;
-Theory or principles.
-Descriptive economics and
-Applied economics.
-Descriptive economics, which is the FACTUAL ELEMENT IN ECONOMICS e.g. in such areas as business units, banking, retailing and wholesaling is also called commerce.
Economics is also defined as the social science which is concerned with satisfaction of human wants which are unlimited in the condition of scarce resources that is how human being can satisfy their s unlimited wants while resources are scarce.
THE BASIC THEORIES OF ECONOMICS
1) SCARCITY
In economics the term scarcity means limited in supply or less than requirement. In economic sense all things are scarce relative to the people’s desire for them.
2) CHOICE
As resources are scarce, a selection or choice of few alternatives to be done. Producers must choose what goods or services to produce or how to produce given scarce given scarce resources.
SCALE OF PREFERENCE is a list of wants in the order of their importance starting with the most pressing wants ending with the less pressing wants.
3) OPPORTUNITY COST
The opportunity cost of anything is the alternative that has been foregone after making a certain choice due to scarcity of resources.
Therefore we can say that Economics is concerned with studying how man tries to satisfy his unlimited wants using scarce resources. Man tries to satisfy his wants as efficiently as possible. As resources are limited and the wants are unlimited, man has to choose which of his wants to satisfy first. SCARCITY AND CHOICE are therefore, key words in the study of ECONOMICS.
DIFFERENCES BETWEEN COMMERCE AND ECONOMICS
-Economics is concerned with chief problems arising from the various economic activities on production, exchange, distribution, consumption and allocation of scarce resources, while commerce is concerned with the processes of exchange and distribution of goods.
-Economics very wide comprises the study of almost all economic activities, while commerce is a part of economics which comprise the study of commercial occupations only.
-Economics is highly interested in analysis of the working of the system so that economics becomes a highly theoretical study, seeking to understand the principles underlying economic activity for instance the theory of demand and supply, while commerce is highly a factual or practical study on various business economic facts i.e. how of economic activity e.g. the operation of import and export trade, retail and wholesale trade etc.
SIMILARITIES OF COMMERCE AND ECONOMICS
However, we can note the following similarities in the study of commerce and economics;
-They are both social sciences
-They are both interested in the distribution in the distribution and exchange of goods and services for satisfaction of human wants.
-They are both concerned with economic activities and facts especially money and banking.