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  • 1. Business Economics – Introduction Sameer Gunjal
  • 2. What is Economics?
    • Economics is the branch of social science that studies the production, distribution, and consumption of goods and services.
    • An important concept that underlies all economic theories and studies is that of scarcity.
    • The scarcity of goods and services is due to factors such as the limitations of:
      • Resources (water, land, manpower)
      • Capabilities of technology or skill
      • Poor planning and execution – artificial scarcity
  • 3. Sub Divisions of Economics
    • Microeconomics : Deals with concepts of supply and demand, production and costs, types of competition, etc. more to do with the micro perspective. In other language the analysis is bottom up in nature.
    • Macroeconomics : Deals with concepts like economic growth, monetary and fiscal policies, central banks, concepts of money supply, etc. more to do with the macro perspective. In other words the analysis is more of top down nature.
  • 4. Basis of Classification
  • 5. Economic Rationality
    • Rationality implies acting objectively, keeping in view:
      • Ends and means
      • Objectives and constraints
    • The objectives of a firm : Maximize revenues and thus profits
    • Decision making for the same happens under various constraints
  • 6. Steps in Decision Making
    • All possible courses of action are known to you
    • You are able to separate all such courses of action into two categories feasible and infeasible
    • Based on the available information assess the consequences of any course of action
    • Rank the alternatives in terms of priority
    • Choose that course of action which occupies the highest order of priority
  • 7. Economic System - Circular Flow
  • 8. Economic Balance - Government
  • 9. Next Session
    • Basic Concepts – Microeconomics
      • Concept of Economic Profit, Opportunity Cost and Accounting Profit
      • Functional Relationship – Total, Average and Marginal
      • Equi-Marginalism
      • Time Perspective in Decision Making
  • 10.
    • Thank You