S.No	Public goods	Private goods
1.	Spill over benefits	No spill over benefits.
2.	Non rival in consumption and non excludable. eg. National defence	Rival in consumption and excludable. eg. food and drink

(i) Capital goods are goods which do not directly satisfy the consumer wants.
(ii) But they help to produce consumer goods.
(iii) For example, machines do not directly satisfy the consumers, but in factories, the manufacturers use them to produce consumer goods.

(i) Inductive method and
(ii) Deductive method

(i) Introductory Economics
(ii) Economics an Introduction
(iii) Basic Economics
(iv) Elements of Economics
(v) Elementary Economics
(vi) Fundamentals of Economics etc.

(i) Positive science deals with what it is.
(ii) It is concerned with how and why.

The laws of economics are statements of tendencies. Every cause has a tendency to produce some result. The law of gravitation is a statement of tendency.
(i) A statement of tendency: According to the law of demand, when there is a fall in price of good. The demand for it will expand and vice versa. It means there is a tendency among people to buy more, when there is fall in price.
(ii) Laws operate under certain conditions: Basic assumptions are there for economic law to operate, that is called "ceteris paribus" other things remain the same. When some economic laws do not operate, it means that the conditions have changed.
(iii) Not as exact as physical sciences: Law of gravitation is a simple and exact statement. But in economics we deal with human behaviour which is not firm. So economic laws are not as exact as physical sciences.
(iv) Economics laws are complex and inexact: As it deals with human beings and their behaviour. There are exceptions to many laws of economics. It changes to changes times.
(v) All economic laws are based on certain assumptions: Every economic law is governed by certain assumptions. The law will hold good only when the assumptions are satisfied.
(vi) The laws of economies are hypothetical: Unlike physical sciences, economic laws .cannot be verified, by experiment. This is why we says sometimes that economic laws are hypothetical.

The different kinds of goods and services are
(i) Free and economic goods: Free goods are available in nature and they are not scarce. They do not command a price in the market. ego Air and sunshine. Water also an example in the past but at present it has exchange value. So it is not a free good. Economic goods are not available in plenty. They are scarce in supply. Man has to spend money to own or use them.
(ii) Consumer goods and capital goods: Consumer goods directly satisfy human wants, TV, Furniture, Automobile etc. Capital-goods (also called producer's goods) don't directly satisfy the consumer wants. They help to produce consumer goods. For example, machines do not directly satisfy the consumers, but in factories, the manufacturers need them.
(iii) Perishable goods and durable goods: Perishable goods are short-lived. Their lifespan is limited. For example fish, fruits, flower etc., do not have a long life. Durable goods and semi-durable goods have a little longer life-time than the Perishable goods. For example, a table, a chair etc.,

(i) What and how much to produce?
(ii) How to produce?
(iii) For whom to produce?
What and how much to produce?
(a) Whether to produce more food or more luxury goods.
(b) Whether to have more agricultural goods or industrial goods.
(c) Whether to use more resources in education and health or more in military services.
How to produce?
Whether to use more labour or more machines.
For whom to produce?
How its produce be distributed among the different sections of the society.

S.No	Positive Economics	Normative Economics
1	Deals with what is, how and why	deals with what ought to be
2	Analyses a problem on the basis of facts and examines its causes.	results are not based on facts but on social, cultural, political and religious considerations.
3		it is subjective
4	(eg) if rate of interest increases we see why & how it can be reduced.	(eg) if rate of interest increases, we see whether it is good or bad

(i) Intangible things are not physical objects but exist in connection to other things (eg) goodwill.
(ii) Heterogeneous services vary. A single service gives different experiences (eg) music.
(iii) Inseparable from their makers: Labour and labourer are inseparable.
(iv) Perishable so they cannot be stored in inventories

Economics is an Art and a Science:
(i) Economics as an Art:
Art is the practical application of knowledge for achieving particular goals. Economics provides guidance to the solutions to all the economic problems. A. C. Pigou, Alfred Marshall and others regard Economics as an art.
(ii) Economics as a Science:
(a) Science is a systematic study of knowledge. All its relevant facts are collected, classified and analyzed with its scale of measurement. Using these facts, science develops the co-relationship between cause and effect.
(b) Scientific laws derived are tested through experiments, and future predictions are made. These laws are universally applicable and accepted.
(c) Economists like Robbins, Jordon and Robertson argue that Economics is a science like Physics, Chemistry, etc., since, it has several similar characteristics.
(d) Economics examines the relationships between the causes and the effects of the problems. Hence, it is rightly considered as both an art and a science. In fact, art and science are complementary to each other.

Wealth Definition: Adam Smith
(i) Adam Smith (1723 - 1790), in his book "An Inquiry into Nature and Causes of Wealth of Nations" (1776) defines "Economics c the science of wealth".
(ii) He explains how a nation's wealth is created and increased. He considers that the individual in the society wants to promote his own gain and in this process, he is guided and led by an "invisible hand".
(iii) He states that every man is motivated by his self interest This means that each person works for his own good.
(iv) Smith favours the introduction of "division of labour" to increase the quantum of output.
(v) Severe competition in factories and society helps in bettering the product.
(vi) Supply force is very active and a commodity is made available to the consumers at the lowest price.
Criticism:
(vii) For Smith, Economics consists of 'wealth-getting' activities and 'wealth-spending' activities.
(viii) An undue emphasis is given to material wealth. Wealth is treated to be an end in itself.
(ix) This view leads him to ignore human welfare as an essential part of Economics. Smith gives his definition when religious and spiritual values are held high.
(x) Ruskin and Carlyle regard Economics as a 'dismal science', "pig science" etc. as it teaches selfishness which is against ethics.

Steps of Deductive method:
(i) Have a clear idea of the problem to be inquired.
(ii) Define the technical terms used. Assumptions should be precise.
(iii) Deduce hypotheses from the assumptions.
(iv) Verify hypotheses through direct observation of events and statistical methods.
Steps of Inductive method:
(i) The collected data must be systematically arranged
(ii) Based on the data, conclusions are drawn
(iii) Generalization of the hypothesis.
(iv) Verification of the hypothesis.