Business Economics | Key characteristics | Economics for B.Com freshers at VNSGU

Описание: Business Economics
In the words of Hague, "Business economics is a fundamental academic subject which seeks to understand the problem, analyse the same & tries to solve it with decision making"

Characteristics of Business Economics:
1) Business economics is a branch and discipline of general economics:
As said earlier business economics is the application of economic tools to practices of business firms. Just as a study of the agricultural aspects of economic science is known as agricultural economics, study of industrial aspects as industrial economics, study of monetary aspects as monetary economics, so also a study of the economic aspect of the management of the firm is known as business economics.

2) Business economics is mainly micro in character because, it concentrates only on the study of the firm. It is the problem of a business firm which form a part of the study of managerial economics; it does not deal with the working of the economy as a whole.

3) The contents of business economics are mainly based on the theory of firm. It analyses the problems of a firm and offers solution for the same.

4) Business economics also studies macro economics to understand and adjust to the economic environment under which the firm operates. In other words, although business economics draws heavily on micro economics, some aspects of macro economics are also relevant in decision making and forward planning. Some problems of the firm are related to macro variables like national income, aggregate level of employment, general price level, etc

5)Business economics is normative rather than positive in character; that is, it is prescriptive rather than descriptive. It deals with 'what should be done and how it should be done. It shows the way as to how to achieve the set objective to get the optimal results. Business economics is, thus, concerned with the function of an advisory nature in decision making. It is normative in character dealing with decision making problems

6) Business economics is both conceptual and metrical: It makes use of the various concepts in order to understand and analyse the decision - making problems. Likewise, it also uses the various quantitative techniques to measure the impact of different factors and policies. An intelligent application of quantitative techniques to business presupposes considered judgement and hard and careful thinking about the nature of the particular problem to be solved.

7) Business economics helps business executives in taking rational decisions, since resources with the firm are limited, they have to be allocated in the most optimum manner to achieve the set objectives. This is, then, essentially a problem of choice. Managerial economics helps in analysing the various alternatives and selecting the one which would give the optimal results.



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