Micro economics & Macro economics - Business economics

Nature and scope of business economics.

The term economics owes its origin to the Greek word for 'OIKONOMIA' which means household management.

Fundamentals facts of Economics.

  • Human beings have unlimited wants and.

  • That means to satisfy these unlimited wants a relative scarce from the subject matter of Economics.

Economics has been broadly divided into two parts
  • Microeconomics
  • Macroeconomics

Micro economics.

  • The term micro is derived from the Greek word 'MIKROS' which means small.
  • Microeconomics deals with allocation of resources.
  • It is also known as price theory.
  • Product pricing, consumer behaviour, factor pricing, the economic condition of the section of people, behaviour of firms, location of industry.

Macro economics.

  • The term macro is derived from the Greek word 'MAKROS' which means large.
  • Macroeconomics deals with fuller utilisation of resources.
  • It is also known as 'income and employment theory.
  • National income and national output,  the general price level and interest rates,    balance of trade and balance of payments, external value of currency,                         the overall level of savings and investment, and. The level of employment and rate of economic growth.

Definitions

Adem Smith        —    Science of wealth
Alfred Marshall  —   Material of well-being.
Robbins.              —   choice of decision making.
Samuelson.        —    science of dynamic growth and development.

Business economics

1. Business economics is also reffered as managerial economics
2. Joel Dean defined business economics in terms of the use of economic analysis in the formulation of business policies.
3. NATURE OF BUSINESS ECONOMICS: 
        i) business economics is a science
      ii) Largely based on micro economics
     iii) Incorporates the elements of macro economics.
     iv) It involves practical application of rules and priciple.
      v) use of Theory of Markets and private enterprises.
     vi) Pragmatic in approach; it tacklels practicle problems in real world.
    vii) interdisciplinary  in nature, it uses maths, stat, econo, research etc.
   viii) Normative in nature: 
                     a. Positive or pure science; analysis of relationship between variable in an objective and scientific manner, but it does not involve any value judgment. it states 'what is' of tje state of affairs and not what 'ought to be'
                      b. Normative in nature: it involves value judgements. it suggests 'what should be' a particular course of action under given circumstances
   

APPLIED MICRO ECONOMICS
a. Demand analysis and forecasting
b. Production and Cost analysis.
c. Inventory management.
d. market structure and pricing policies : ABC analysis, simple simulation exercise, mathmathical mathods.
e. Resource allocation eith the help of linear programming.
f. theory of capital and investment decisions.
g. Profit analysis.
h. risk and unscertainity analysis.

There is one more topic called ECONOMIC SYSTEMS.
it contains types of economic systems and their features

Comments

  1. Gowtham7 May 2021 at 05:52

    This is gowtham. Sir this is very valuable information sir . thank you so much

    ReplyDelete

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