What is the difference between economics and business economics?
Economics is a wider term when compared to business economics. Economics is actually a social science that deals with the study of production, consumption and distribution of goods and services from economic point of view. Economics try to explain the functional mechanism of economies and it trace down the interaction of various economic agents. Economic analysis of every aspect of society is important let it be business, crime, education health, politics, law, war, religion etc. Economics has two major branches i.e. macroeconomics and microeconomics.
Macroeconomics analyses the economic situation and direction of small individual economic agents like demand and supply relationships, factors of production etc. On the other hand macroeconomics study the national or international economic agents like inflation, unemployment, GDP, GNP, Monterey policy, Fiscal policy etc.
Business economics is a branch of economics. It is also known as managerial economics. It is defined as a special part of economics that deals with the study of an organization and analyzes the relationships of firm capital, product and labor market. In other words, we can say that business economics apply the principles of microeconomics to take very specific decisions of business. It is a combination of theoretical economics and business. Managers use business economics to analyze the impact and direction of their decisions, for example- from demand and supply analysis managers can decide about production schedules of future. Similarly for fixing the price of products, economic analysis of various variables is very important.
Business economics is largely dependents upon forecasting techniques like correlation and regression analysis, Markovian analysis and linear calculus. Business economics try to identify any trends existing in various variable factors of business so that managers can have a rational reason to believe and justify their decisions about future.Category: Economics