Prof. Prasad Joshi

}  Science of wealth }  Science of material well-being }  Science of choice making and }  Science of dynamic growth and development

◦  “An inquiry into the nature and causes of the wealth of the nations’’ - Adam Smith.

◦  “Science which deals with wealth“ - J.B. Say

}  "Economics is a study of mankind in the ordinary business of life. It examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well-being. Thus, it is on the one side a study of wealth and on the other and more important side a part of the study of the man“ - Alfred Marshall

}  "The range of our inquiry becomes restricted to that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money”

- A.C. Pigou

}  "Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses“ – Robbins

◦  Economics is a science ◦  Unlimited wants ◦  Scarce means ◦  Alternative uses

}  "Economics is the study of how men and society choose, with or without the use of money, to employ scarce productive resources which could have alternative uses, to produce various commodities over time and distribute them for consumption now and in the future amongst various people and groups of society“ - Paul A. Samuelson

}  According to Spencer and Siegelman - "the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management".

}  According to Mc Nair and Meriam, "Business economics deals with the use of economic modes of thought to analyse business situation".

}  Micro economic in character }  Normative science – not Rocket science }  Pragmatic - Practical }  Prescriptive - rather than descriptive }  Uses macro economics }  Bridge between economic theory and

managerial practice. }  Management oriented }  Art and science }  Multi disciplinary

}  What should be the product mix? }  Which is the least cost production technique and input mix?

}  What should be the level of output and price of the product?

}  How to take investment decisions? }  How much should be the selling cost?

1. To integrate economic theory with business practice.

2. To apply economic concepts and principles to solve business problems.

3. To employ the most modern instruments and tools to solve business problems.

4. To allocate the scarce resources in the optimal manner.

5. To make overall development of a firm. 6. To help achieve other objectives of a firm

like attaining industry leadership, expansion of the market share etc.

7. To minimise risk and uncertainty 8. To help in demand and sales forecasting. 9. To help in operation of firm by helping in

planning, organising, controlling etc. 10. To help in formulating business policies. 11. To help in profit maximisation.

}  Demand analysis and forecasting }  Cost and production analysis }  Pricing decisions, policies and practices }  Profit management }  Capital management }  Inventory management

}  Linear programming and theory of games }  Environmental (Macro economical) issues }  Business cycles

Thank You!