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f1\f0\charscalex100 {CHAPTER OUTLINE}\par\pard\li1640\ri0\sl-400\slmult0 \fs20\c
f1\f0\charscalex100 {What is business ?}\par\pard\li1293\ri0\sl-293\slmult0 \fs2
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arscalex100 { Responsibilities of a business}\par\pard\li1640\ri0\sl-266\slmult0
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arscalex100 {LEARNING OBJECTIVES}\par\pard\li280\ri0\sl-400\slmult0 \fs20\cf1\f0
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lt0 \fs20\cf1\f0\charscalex100 {1. Understand the nature and scope of}\par\pard\
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sl-280\slmult0 \fs20\cf1\f0\charscalex100 {2. Define business, economics and bus
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par\pard\li0\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {3. Shortlist charact
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hy only some companies like HLL,}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn
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lex100 {RIL, Wipro, SAIL, HDFC, ONGC, Dr. Reddys Lab, Satyam computer, Smithline
and Beccham}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {are
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lt0 \fs18\cf1\f0\charscalex100 {India has no dearth of such people, who have scr
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1\f0\charscalex100 {like J.R.D. Tata, Lalbhai, Chidambaram,}\par\pard\li920\ri0\
sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Birla, Rahul Bajaj, Aditi Godrej, Dee
pak parekh, Krishna Murthy, late Dhirubai Ambani, Anil}\par\pard\li920\ri0\sl-26
6\slmult0 \fs18\cf1\f0\charscalex100 {and Mukesh Ambani, Narayana Murthy, Azim P
remji, Anji Reddy, Shivanader, have steered}\par\pard\li920\ri0\sl-266\slmult0 \
fs20\cf1\f0\charscalex100 {their way to the peak of cliff.}\par\pard\li1520\ri0\
sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Business may be understood as the org
anised efforts of enterprises to supply the consumers}\par\pard\li920\ri0\sl-266
\slmult0 \fs18\cf1\f0\charscalex100 {with goods and services for fulfilling the
needs and wants. They may earn profit or incur loss}\par\pard\li920\ri0\sl-266\
slmult0 \fs18\cf1\f0\charscalex100 {and they have to do this within the framewor
k of law. All businesses share the same purpose}\par\pard\li920\ri0\sl-266\slmul
t0 \fs18\cf1\f0\charscalex100 {that is to earn profits. The purpose of business
goes beyond earning profit. It is an important}\par\pard\li920\ri0\sl-266\slmult
0 \fs18\cf1\f0\charscalex100 {institution in society be it for the supply of goo
ds and services, creation of job opportunities,}\par\pard\li920\ri0\sl-266\slmul
t0 \fs18\cf1\f0\charscalex100 {offer of better quality of life; or contributing
to the economic growth of the country and putting}\par\pard\li920\ri0\sl-266\slm
ult0 \fs20\cf1\f0\charscalex100 {it on the global map, the role of business is c
rucial. Society needs business and vice-versa.}\par\pard\li920\ri0\sl-306\slmult
0 \fs24\cf1\f0\charscalex100 {MEANING OF BUSINESS}\par\pard\li1520\ri0\sl-266\sl
mult0 \fs18\cf1\f0\charscalex100 {Business refers to all the activities concerne
d with production, manufacturing, lending,}\par\pard\li920\ri0\sl-266\slmult0 \f
s18\cf1\f0\charscalex100 {selling, leasing and the like, for earning profit. In
the process of executing business activities}\par\pard\li920\ri0\sl-266\slmult0
\fs18\cf1\f0\charscalex100 {the businessmen/executives in the organisation have
to take various business decisions. In the}\par\pard\li920\ri0\sl-266\slmult0 \f
s18\cf1\f0\charscalex100 {process of taking various business decisions the busin
essmen should study the behaviour of}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf
1\f0\charscalex100 {economic laws or principles or theory. These economic laws o
r the principles of economics}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\ch
arscalex100 {influence the business of the organisation in the process of earnin
g/maximizing profits.}\par\pard\li920\ri0\sl-440\slmult0 \fs24\cf1\f0\charscalex
100 {ECONOMICS}\par\pard\li1520\ri0\sl-440\slmult0 \fs18\cf1\f0\charscalex100 {I
f the resources are abundant and the needs and wants are minimal, there is no ne
ed to}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {study the e
conomics. The subject economics came into being because there are limitless need
s}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {and wants and s
carce resources it calls for choice to manage the wants and needs with the}\par\
pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {scarce resources. The
problem of allocation of scarce resources gave birth to a subject called}\par\pa
rd\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {economics. It is a scien
ce of choice and it is a 150-year-old discipline. Noted economists described}\pa
r\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Economics as a study

of household management. Adam Smith viewed it as study of Wealth,}\par\pard\li9
20\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Alfered Marshall as Welfare, R
obins as use of scares resources Paul A. Samuelson as growth}\par\pard\li920\ri0
\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {definition. All said and done, the d
iscipline Economics is the study of choice, and involves decision}\par\pard\li92
0\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {making in every aspect of busin
ess and human activity.}\par\pard\li1520\ri0\sl-266\slmult0 \fs18\cf1\f0\charsca
lex100 {The commonly used definition of Economics}\fs18\cf1\f0\charscalex100 {
is the study of the use of limited}\par\pard\li920\ri0\sl-293\slmult0 \fs18\cf1\
f0\charscalex100 {resources for the achievement of alternative ends}{\super \fs1
2\up3\cf1\f0\charscalex100 {1}}\fs18\cf1\f0\charscalex100 {. More specifically,
Economics may be defined}\par\pard\li920\ri0\sl-373\slmult0 \fs10\cf1\f0\charsca
lex100 {1}\fs16\cf1\f0\charscalex100 { James M. Henderson and Richard E. Quandt,
Microeconomic Theory- A Mathematical Approach, Tata}\par\pard\li920\ri0\sl-240\
slmult0 \fs18\cf1\f0\charscalex100 {McGraw-Hill, New Delhi, p-1}\par\pard\sect\s
ectd\sbknone\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\pard\sect\sectd\sbk
page
7;32768}}
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7;32768}}
7;32768}}

0 \fs18\cf0\par\pard\li920\ri0\sl-346\slmult0 \fs18\cf1\f0\charscalex100 {INTROD
UCTION}\par\column\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213
\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl
-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri
0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-360\slmult0 \fs22\cf1\f0\charscal
ex100 {3}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\marglsxn666\margrs
xn133\pard\li920\ri0\sl-480\slmult0 \fs20\cf1\f0\charscalex100 {as a social scie
nce, which covers the actions of individuals and groups of individuals in the}\p
ar\pard\li920\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {processes of produc
ing, exchanging, and consuming goods and services.}{\super \fs14\up3\cf1\f0\char
scalex100 {2}}\par\pard\li1520\ri0\sl-293\slmult0 \fs18\cf1\f0\charscalex100 {He
nce the application of the economics in day to day business starting from the es
tablishing}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {the bu
siness organisation to production, distribution, sales, after sales and also the
keeping the}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {cust
omer relationship for future market is necessary. Hence business economics deve
loped as}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {a branch
of economics.}\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\s
l-346\slmult0 \fs24\cf1\f0\charscalex100 {BUSINESS ECONOMICS}\par\pard\li1520\ri
0\sl-440\slmult0 \fs18\cf1\f0\charscalex100 {Business economics is a special bra
nch of economics. It evolved to bridge the gap between}\par\pard\li920\ri0\sl-26
6\slmult0 \fs18\cf1\f0\charscalex100 {abstract theory and business practice. Bus
iness economics deals with the use of economic concepts}\par\pard\li920\ri0\sl-2
66\slmult0 \fs18\cf1\f0\charscalex100 {and principles for decision making in a b
usiness organisation. The term managerial economics}\par\pard\li920\ri0\sl-293\s
lmult0 \fs20\cf1\f0\charscalex100 {is interchangeably used in place of business
economics.}{\super \fs14\up3\cf1\f0\charscalex100 {3}}\par\pard\li1520\ri0\sl-28
0\slmult0 \fs18\cf1\f0\charscalex100 {It is the application of economic theories
, concepts, doctrines, principles, and roles to}\par\pard\li920\ri0\sl-266\slmul
t0 \fs18\cf1\f0\charscalex100 {decision-making processes in business. It is a co
nfluence of economic principles and business}\par\pard\li920\ri0\sl-266\slmult0
\fs18\cf1\f0\charscalex100 {decisions. Economics spreads, pervades the business
decision-making willy-nilly, and removes}\par\pard\li920\ri0\sl-266\slmult0 \fs2
0\cf1\f0\charscalex100 {catharsis of ineffective decision-making and business lo
sses considerably.}\par\pard\li1520\ri0\sl-293\slmult0 \fs18\cf1\f0\charscalex10
0 {Business economics is like an umbrella, which provides safe haven to business
men. If a}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {busines
sman treads the corridors of business without the support of business economics,
he}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {treads on a s
lippery lane and come to grief. Economic principles provide comprehensive cover}
\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {under difficult a
nd smooth conditions of business houses.}\par\pard\li1520\ri0\sl-306\slmult0 \fs
18\cf1\f0\charscalex100 {Maruti-Suzuki, a joint venture car making automobile co
mpany steers ahead inspite of}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\ch
arscalex100 {intense competition in the small-car segment in India, because of i
ts pricing strategy and target}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\c
harscalex100 {market. The company effectively availed pricing strategiesa concep
t given by economics.}\par\pard\li1520\ri0\sl-306\slmult0 \fs18\cf1\f0\charscale
x100 {In India under slack and recession period, many IT companies recklessly re
trenched the}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {empl
oyees, but companies like Infosys did not do that because of its strong tenet th
at success of}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {bus
iness solely depends on its people. Infosys strongly believed and adhered to the
concept that}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {eve

ry slack period is followed by progression period, borrowing the concept from ec
onomics that}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {is t
he phase of trade or business cycle.}\par\pard\li1520\ri0\sl-293\slmult0 \fs18\c
f1\f0\charscalex100 {ITC jumped to FMCG sector of biscuits making, readymix food
s, garments, etc. guided}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charsca
lex100 {by diversification. Which is again the concept of economic product mix.
We have many number}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex10
0 {of cases and incidents where, business is guided by economic principles for d
ecision - making}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {
and future planning through forecasting and SWOT analysis in the context of ever
changing}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {busines
s environment.}\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\s
l-346\slmult0 \fs24\cf1\f0\charscalex100 {MEANING OF BUSINESS ECONOMICS}\par\par
d\li1520\ri0\sl-426\slmult0 \fs18\cf1\f0\charscalex100 {Business economics is an
application of economic theory to the business practice for}\par\pard\li920\ri0
\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {decision making and forward planning
.}\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-413\slmult0
\fs12\cf1\f0\charscalex100 {2}\fs18\cf1\f0\charscalex100 {Op.cit., p.1.}\par\pa
rd\li920\ri0\sl-266\slmult0 \fs10\cf1\f0\charscalex100 {3}\fs16\cf1\f0\charscale
x100 { Milton H. Spencer and Louis Siegelman, Managerial Economics, Richard D. I
rwin, Inc., Homewood,}\par\pard\li920\ri0\sl-240\slmult0 \fs18\cf1\f0\charscalex
100 {Illinois, 1959, p.1.}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\m
arglsxn666\margrsxn133\pard\sect\sectd\sbkpage
7;32768}}
7;32768}}

0 \fs18\cf0\par\pard\li920\ri0\sl-360\slmult0 \fs22\cf1\f0\charscalex100 {4}\par
\column\pard\li4746\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4746\ri0\sl-213\slmu
lt0 \fs18\cf0\par\pard\li4746\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4746\ri0\s
l-213\slmult0 \fs18\cf0\par\pard\li4746\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li
4746\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4746\ri0\sl-346\slmult0 \fs18\cf1\f
0\charscalex100 {BUSINESS ECONOMICSVOLUMEI}\par\pard\li0\ri0\sl-213\slmult0 \fs1
8\cf0\par\pard\li0\ri0\sl-280\slmult0 \fs20\cf1\f0\charscalex100 {Decision-makin
g}\fs20\cf1\f0\charscalex100 { refers to the process of selecting one action out
of several alternative}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\mar
glsxn666\margrsxn133\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {a
ctions. For example if a manufacturer of a product, wants to buy raw materials i
n the market}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {the
production department call for tenders or quotations. When quotations are receiv
ed a}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {comparative
statement of the quotations has to be prepared and one customer has to be select
ed}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {from the avail
able customers by considering the reliability, quality of the raw material, pric
e}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {etc. This proce
ss of selecting one out of several customers is called decision making in busine
ss.}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {In simple, wh
en you go to a shop to purchase pen, you will find several brands of pens in the
}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {shop. Out of the
se brands you will select one based on your preference. This process is called}\
par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {Decision-Making.}\
par\pard\li1520\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {Forward planning}
{ }\fs20\cf1\f0\charscalex100 {is a process of thinking in advance or it implies
planning in advance}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex1
00 {for the future. In any business organisation the actions of tomorrow are tho
ught in advance.}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {
For example the business organisation has to think in advance, what would be the
sales in the}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {nex
t month? What is the extent of stock of the goods that should be possesed? Does
the}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {manufacture o
f the product is further required? What would be the sales promotion strategy in
}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {the near future
to increase sales etc is thought in advance for the successful business.}\par\pa
rd\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-360\slmult0 \fs24\cf
1\f0\charscalex100 {DEFINITIONS}\par\pard\li1520\ri0\sl-453\slmult0 \fs18\cf1\f0
\charscalex100 {There are various definitions on business economics, among them
the following are worth}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscal
ex100 {to understand.}\par\pard\li1520\ri0\sl-306\slmult0 \fs18\cf1\f0\charscale
x100 {According to}{ }\fs18\cf1\f0\charscalex100 {McNair and Meriam}\fs18\cf1\f0
\charscalex100 { Managerial economics consists of the use of economic}\par\pard\
li906\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {modes of thought to analyse
business situations.}{\super \fs14\up3\cf1\f0\charscalex100 {4}}\par\pard\li152
0\ri0\sl-293\slmult0 \fs18\cf1\f0\charscalex100 {Spencer and siegelman}\fs18\cf1
\f0\charscalex100 { have defined business economics as the integration of econom
ic}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {theory with bu
siness practice for the purpose of facilitating decision-making and forward plan
ning}\par\pard\li920\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {by managemen
t.}{\super \fs14\up3\cf1\f0\charscalex100 {5}}\par\pard\li1520\ri0\sl-280\slmult
0 \*\tx2746\fs18\cf1\f0\charscalex100 {According to}\tab \fs18\cf1\f0\charscalex
100 {Prof. Joel Dean}\fs18\cf1\f0\charscalex100 {- the purpose of managerial eco
nomics is to show how}\par\pard\li920\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex
100 {economics analysis can be used in formulating business policies.}{\super \f
s14\up3\cf1\f0\charscalex100 {6}}\par\pard\li1520\ri0\sl-266\slmult0 \fs18\cf1\f
0\charscalex100 {Prof. Norman F. Dufty}\fs18\cf1\f0\charscalex100 { has defined
Business Economics as a body of theory which can}\par\pard\li920\ri0\sl-266\slmu
lt0 \fs20\cf1\f0\charscalex100 {be of considerable assistance to the businessman
in his decision making.}\par\pard\li1520\ri0\sl-293\slmult0 \fs18\cf1\f0\charsc
alex100 {Brigham and Pappas}\fs18\cf1\f0\charscalex100 { believe that managerial
economics is the application of economic}\par\pard\li920\ri0\sl-266\slmult0 \fs
20\cf1\f0\charscalex100 {theory and methodology to business administration pract
ice.}\par\pard\li1520\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {From the ab
ove definitions we can draw the following conclusions}\par\pard\li1586\ri0\sl-29
3\slmult0 \fs20\cf1\f0\charscalex100 {1. Business economics is a branch of econo
mics.}\par\pard\li1586\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {2. The ter
m business economics can be used in place of managerial economics/Industrial}\pa
r\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {economies.}\par\par
d\li1586\ri0\sl-280\slmult0 \fs20\cf1\f0\charscalex100 {3. The principles or the
ory of economics is applied to solve the problems of business}\par\pard\li1813\r
i0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {organisation through decision maki
ng and forward planning.}\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\l
i920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-280\slmult0 \fs10\cf1\f0
\charscalex100 {4}\fs16\cf1\f0\charscalex100 { Malcolm P. McNair and Richard S.
Meriam, Problems in Business Economics McGraw-Hill Book Co.,}\par\pard\li920\ri0
\sl-240\slmult0 \fs18\cf1\f0\charscalex100 {Inc., New York and London, 1941. P.v
) preface)}\par\pard\li920\ri0\sl-266\slmult0 \fs10\cf1\f0\charscalex100 {5}\fs1
6\cf1\f0\charscalex100 { Milton H. Spencer and Louis Siegelman, Managerial Econo
mics, Richard D. Irwin, Inc., Homewood,}\par\pard\li920\ri0\sl-240\slmult0 \fs18
\cf1\f0\charscalex100 {Illinois, 1959, p.1.}\par\pard\li920\ri0\sl-253\slmult0 \
fs12\cf1\f0\charscalex100 {6}\fs18\cf1\f0\charscalex100 { Dean, Joel, Managerial
Economics, PrenticeHall of India, New Delhi, eg. 1977.}\par\pard\sect\sectd\sbk
none\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\pard\sect\sectd\sbkpage

7;32768}}
7;32768}}
UCTION}\par\pard\li1586\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li1586\ri0\sl-280\
slmult0 \fs20\cf1\f0\charscalex100 {4. The business economics integrates economi
c theory with business practice.}\par\pard\li920\ri0\sl-440\slmult0 \fs20\cf1\f0
\charscalex100 {Features or Characteristics of Business Economics}\par\pard\li15
20\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {The following are the chief ch
aracteristic of business economics.}\par\pard\li2613\ri0\sl-213\slmult0 \fs18\cf
0\par\pard\li2613\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Characteristics
of Business Economics}\par\pard\li2613\ri0\sl-280\slmult0 \fs18\cf1\f0\charscal
ex100 {1. Micro economics}\par\pard\li2613\ri0\sl-280\slmult0 \fs18\cf1\f0\chars
calex100 {2. Realistic business economics}\par\pard\li2613\ri0\sl-266\slmult0 \f
s18\cf1\f0\charscalex100 {3. Pragmatic science}\par\pard\li2613\ri0\sl-280\slmul
t0 \fs18\cf1\f0\charscalex100 {4. Normative science}\par\pard\li2613\ri0\sl-280\
slmult0 \fs18\cf1\f0\charscalex100 {5. Body of economics concepts & principles}\
par\pard\li2613\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {6. Studies only t
he theory of profits}\par\pard\li2613\ri0\sl-280\slmult0 \fs18\cf1\f0\charscalex
100 {7. Science of decision making and forward planning}\par\pard\li2613\ri0\sl293\slmult0 \fs18\cf1\f0\charscalex100 {8. It uses the services of other sister
subjects.}\par\column\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-
213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0

\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0
\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-360\slmult0 \fs22\cf1\f0\chars
calex100 {5}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\marglsxn666\mar
grsxn133\pard\li1586\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li1586\ri0\sl-400\slm
ult0 \fs20\cf1\f0\charscalex100 {1. Business economics studies the problems of i
ndividual business or firm hence it is}\par\pard\li1813\ri0\sl-266\slmult0 \fs20
\cf1\f0\charscalex100 {micro economics}\fs20\cf1\f0\charscalex100 { in character
.}\par\pard\li1586\ri0\sl-320\slmult0 \*\tx3946\fs20\cf1\f0\charscalex100 {2. Bu
siness economics is}\tab \fs20\cf1\f0\charscalex100 {realistic}\fs20\cf1\f0\char
scalex100 { because it studies the real business problems like}\par\pard\li1813\
ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {demand determination, demand fore
casting, pricing of a product, type of competition}\par\pard\li1813\ri0\sl-266\s
lmult0 \fs20\cf1\f0\charscalex100 {their price determination etc.}\par\pard\li15
86\ri0\sl-306\slmult0 \*\tx2306\fs18\cf1\f0\charscalex100 {3. It is}\tab \fs18\c
f1\f0\charscalex100 {pragmatic}\fs18\cf1\f0\charscalex100 { science and highlig
hts practical application of various economic}\par\pard\li1813\ri0\sl-266\slmult
0 \fs20\cf1\f0\charscalex100 {theories like demand theory in determining the dem
and, cost theory to determine}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\c
harscalex100 {cost, price theory to determine price etc., to solve business prob
lems.}\par\pard\li1586\ri0\sl-306\slmult0 \fs18\cf1\f0\charscalex100 {4. Busines
s economics is normative science rather than positive science.}{ }\fs18\cf1\f0\c
harscalex100 {Positive science}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\
charscalex100 {deals with things as they are. It explains their causes and effec
ts. For example it}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex10
0 {studies what factor determines the rate of interest? What are the forces, whi
ch influence}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {the
determination of the rate of interest? It refuses to pass value judgements like
}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {whether these f
orces are fair or not.}{ }\fs20\cf1\f0\charscalex100 {Normative science}\fs20\cf
1\f0\charscalex100 { studies the things, as they}\par\pard\li1813\ri0\sl-266\slm
ult0 \fs20\cf1\f0\charscalex100 {ought to be or should be and hence involves val
ue judgements. It studies what}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\
charscalex100 {constitutes a fair rate of interest? Any enquiry into this shall
immediately become a}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex
100 {normative enquiry because it considers the ethical value. Hence business ec
onomics}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {is presc
riptive rather than descriptive study.}\par\pard\li1586\ri0\sl-266\slmult0 \fs20
\cf1\f0\charscalex100 {5. Business economics largely uses that}{ }\fs20\cf1\f0\c
harscalex100 {body of economic concepts and principles}\par\pard\li1813\ri0\sl-2
66\slmult0 \fs20\cf1\f0\charscalex100 {to solve the business problems.}\par\pard
\li1586\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {6. As a part of the theor
y of distribution, it studies only the theory of profits.}\par\pard\li1586\ri0\s
l-320\slmult0 \*\tx5786\fs20\cf1\f0\charscalex100 {7. It is a }{ }\fs20\cf1\f0\c
harscalex100 {science of decision making}\fs20\cf1\f0\charscalex100 { and}\tab \
fs20\cf1\f0\charscalex100 {forward planning.}\fs20\cf1\f0\charscalex100 { Busine
ss economist}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {wil
l collect the information in a systematic manner and analyse the information to}
\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {take decisions.}
\par\pard\li1586\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {8. It uses the s
ervices of many other sister subjects like statistics, mathematics, operation}\p
ar\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {research, Accounti
ng, psychology etc.}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\marglsx
n666\margrsxn133\pard\sect\sectd\sbkpage

7;32768}}
7;32768}}
3\margtsxn666\margbsxn626\cols3\colno1\colw1520\colsr-0\colno2\colw4746\colsr-0\
colno3\colw4826\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-21
3\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\r
i0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard
\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-360\slmult0 \fs22\cf1\
f0\charscalex100 {6}\par\column\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\l
i0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pa
rd\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\pa
r\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf
0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-413\slmult0 \fs2
0\cf1\f0\charscalex100 {Objectives of Business Economics}\par\pard\li0\ri0\sl-32
0\slmult0 \fs20\cf1\f0\charscalex100 {The following are the objectives}\par\pard
\li1093\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li1093\ri0\sl-280\slmult0 \fs18\cf
1\f0\charscalex100 {Objectives of Business Economics}\par\column\pard\li0\ri0\sl
0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li
0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\par
d\li0\ri0\sl-346\slmult0 \fs18\cf1\f0\charscalex100 {BUSINESS ECONOMICSVOLUMEI}\
par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\pard
\li2613\ri0\sl-306\slmult0 \fs18\cf1\f0\charscalex100 {1. Integration of economi
c theory with business practice}\par\pard\li2613\ri0\sl-293\slmult0 \fs18\cf1\f0
\charscalex100 {2. Avoiding abstract discussion}\par\pard\li2613\ri0\sl-280\slmu
lt0 \fs18\cf1\f0\charscalex100 {3. Practical application of economics concepts t
o business problems}\par\pard\li2613\ri0\sl-280\slmult0 \fs18\cf1\f0\charscalex1
00 {4. Employing modern tools to solve business problems}\par\pard\li2613\ri0\sl

-266\slmult0 \fs18\cf1\f0\charscalex100 {5. Optimum use of scarce resources}\par
\pard\li2613\ri0\sl-293\slmult0 \fs18\cf1\f0\charscalex100 {6. All round develop
ment of the firm}\par\pard\li1586\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li1586\r
i0\sl-280\slmult0 \fs20\cf1\f0\charscalex100 {1. Business economics aims at inte
gration of economic theory with business practice.}\par\pard\li1586\ri0\sl-293\s
lmult0 \fs20\cf1\f0\charscalex100 {2. Business economics aims at avoiding abstra
ct discussion.}\par\pard\li1586\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {3
. It aims at practical application of economic concepts and principles to solve
business}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {problem
s.}\par\pard\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {4. It employs
most modern instruments and tools to solve business problems.}\par\pard\li1586\
ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {5. It aims at the optimum use of
scarce resources of a firm.}\par\pard\li1586\ri0\sl-293\slmult0 \fs20\cf1\f0\cha
rscalex100 {6. It aims at all round development of the firm.}\par\pard\li920\ri0
\sl-480\slmult0 \fs20\cf1\f0\charscalex100 {Differences between Business Economi
cs and Economics}\par\pard\li1520\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100
{There are several differences between Business Economics and Economics. The fol
lowing}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {are some b
asic differences.}\par\pard\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100
{1. Business economics is an application of economic principles to the business
}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {management to s
olve the problems of the business. Whereas economics is a body of}\par\pard\li18
13\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {economic principles itself.}\p
ar\pard\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {2. Business econom
ics is micro in character. Whereas economics is both micro and macro}\par\pard\l
i1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {in character.}\par\pard\li1
586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {3. Business economics study t
he problems of the individual firm and has nothing to do}\par\pard\li1813\ri0\sl
-266\slmult0 \fs20\cf1\f0\charscalex100 {with the problems of the individuals, w
hereas economics deals with the problems of}\par\pard\li1813\ri0\sl-266\slmult0
\fs20\cf1\f0\charscalex100 {the firm and the individuals.}\par\pard\li1586\ri0\s
l-266\slmult0 \fs20\cf1\f0\charscalex100 {4. In business economics only profit t
heory is used, whereas in economics all the theories}\par\pard\li1813\ri0\sl-266
\slmult0 \fs20\cf1\f0\charscalex100 {of factors of productions are used.}\par\pa
rd\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {5. Economic theory hypo
thesizes economic relationships and builds economic models}\par\pard\li1813\ri0\
sl-266\slmult0 \fs20\cf1\f0\charscalex100 {but business economics adopts, modifi
es and reformulates economic models to suit}\par\pard\li1813\ri0\sl-266\slmult0
\fs20\cf1\f0\charscalex100 {the specific conditions to solve the problems of the
firm.}\par\pard\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {6. Econom
ic theory makes some assumptions whereas business economics introduces}\par\pard
\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {certain feed backs.}\par\
pard\li920\ri0\sl-413\slmult0 \fs20\cf1\f0\charscalex100 {Scope of Business Econ
omics}\par\pard\li1520\ri0\sl-360\slmult0 \fs18\cf1\f0\charscalex100 {Business e
conomics is a solution oriented subject to the problems of the Business}\par\par
d\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {organisation, and the pro
blems in whatever in its form. Since the business is dynamic and}\par\pard\li920
\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {numerous problems are emerging i
n the day to day business, there is no uniformity in the scope}\par\pard\li920\r
i0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {of business economics among variou
s authors. The following aspects (areas) are identified as}\par\pard\li920\ri0\s
l-266\slmult0 \fs20\cf1\f0\charscalex100 {the fields that come under the purview
of business economics.}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\mar
glsxn666\margrsxn133\pard\sect\sectd\sbkpage\pgwsxn11893\pghsxn16840\marglsxn666
\margrsxn133\margtsxn666\margbsxn613\cols2\colno1\colw9440\colsr-0\colno2\colw16
53\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs
18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slm
ult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl
-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-346\slmult0 \fs18\cf1\f0\charscalex
100 {INTRODUCTION}\par\pard\li1520\ri0\sl-480\slmult0 \fs20\cf1\f0\charscalex100

{1. Demand Analysis and demand forecasting}\par\pard\li1520\ri0\sl-306\slmult0
\fs20\cf1\f0\charscalex100 {2. Cost and production analysis}\par\pard\li1520\ri0
\sl-280\slmult0 \fs20\cf1\f0\charscalex100 {3. Pricing decisions, policies and p
ractices}\par\pard\li1520\ri0\sl-280\slmult0 \fs20\cf1\f0\charscalex100 {4. Prof
it management and}\par\pard\li1520\ri0\sl-280\slmult0 \fs20\cf1\f0\charscalex10
0 {5. Capital management}\par\pard\li1520\ri0\sl-280\slmult0 \fs20\cf1\f0\charsc
alex100 {6. In other areas:}\par\pard\li1760\ri0\sl-280\slmult0 \fs20\cf1\f0\cha
rscalex100 {(}\fs20\cf1\f0\charscalex100 {a}\fs20\cf1\f0\charscalex100 {) Busine
ss economics and statistics}\par\pard\li1760\ri0\sl-280\slmult0 \fs20\cf1\f0\cha
rscalex100 {(}\fs20\cf1\f0\charscalex100 {b}\fs20\cf1\f0\charscalex100 {) Busine
ss economics and mathematics}\par\pard\li1760\ri0\sl-280\slmult0 \fs20\cf1\f0\ch
arscalex100 {(}\fs20\cf1\f0\charscalex100 {c}\fs20\cf1\f0\charscalex100 {) Busin
ess economics and accounting}\par\pard\li1760\ri0\sl-280\slmult0 \fs20\cf1\f0\ch
arscalex100 {(}\fs20\cf1\f0\charscalex100 {d}\fs20\cf1\f0\charscalex100 {) Busin
ess economics and operations research}\par\pard\li1760\ri0\sl-280\slmult0 \fs20\
cf1\f0\charscalex100 {(}\fs20\cf1\f0\charscalex100 {e}\fs20\cf1\f0\charscalex100
{) Business economics and the theory of decision-making}\par\column\pard\li0\ri
0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\par
d\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par
\pard\li0\ri0\sl-360\slmult0 \fs22\cf1\f0\charscalex100 {7}\par\pard\sect\sectd\
sbknone\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\pard\li1520\ri0\sl-293\s
lmult0 \fs20\cf1\f0\charscalex100 {1. Demand analysis and demand forecasting.}\f
s20\cf1\f0\charscalex100 { The business firms convert their}\par\pard\li920\ri0
\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {economic resources in to a saleable
products or services. These business units should know as to}\par\pard\li920\ri0
\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {what are the factors that influence
the demand for their goods or services? What would be the}\par\pard\li920\ri0\sl
-266\slmult0 \fs18\cf1\f0\charscalex100 {total demand for their existing product
or new methods? How to forecast the demand for their}\par\pard\li920\ri0\sl-266
\slmult0 \fs18\cf1\f0\charscalex100 {products or services? What are the existing
methods of forecasting their demand? All these}\par\pard\li920\ri0\sl-266\slmul
t0 \fs18\cf1\f0\charscalex100 {questions call for proper business planning and o
ccupy a vital or strategic place in Business}\par\pard\li920\ri0\sl-266\slmult0
\fs20\cf1\f0\charscalex100 {Economics.}\par\pard\li1520\ri0\sl-266\slmult0 \fs18
\cf1\f0\charscalex100 {2. Cost and production analysis.}\fs18\cf1\f0\charscalex1
00 { The demand for the product depends upon the several}\par\pard\li920\ri0\sl266\slmult0 \fs18\cf1\f0\charscalex100 {factors, one among them is the cost of a
product or service. There is a need to build up proper}\par\pard\li920\ri0\sl-2
66\slmult0 \fs18\cf1\f0\charscalex100 {cost data of the organisation. The study
of types of cost and their behaviour in different periods}\par\pard\li920\ri0\sl
-266\slmult0 \fs18\cf1\f0\charscalex100 {is essential for control of costs and d
ecision-making purposes. The study of scale of production,}\par\pard\li920\ri0\s
l-266\slmult0 \fs18\cf1\f0\charscalex100 {economies and diseconomies of producti
on and the functional relationship between Inputs and}\par\pard\li920\ri0\sl-266
\slmult0 \fs20\cf1\f0\charscalex100 {Outputs also come under the scope of busine
ss economics.}\par\pard\li1520\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {3.
Pricing decisions, policies and practices.}\fs20\cf1\f0\charscalex100 { The pri
cing is a very important area of}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0
\charscalex100 {Business Economics. The opening of economies through liberalisat
ion, privatisation and}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscale
x100 {globalisation to the free market; the pricing of a product became strategi
c and even changed the}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscale
x100 {accounting system. Pricing of a product, methods of pricing, pricing in di
fferent types of markets,}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charsc
alex100 {factors to be considered in the pricing of a product are the important
areas to be studied under}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charsc
alex100 {business economics.}\par\pard\li1520\ri0\sl-266\slmult0 \fs18\cf1\f0\ch
arscalex100 {4. Profit management.}\fs18\cf1\f0\charscalex100 { The main object
ive of the business concern is to earn profit and}\par\pard\li920\ri0\sl-266\slm

ult0 \fs18\cf1\f0\charscalex100 {also maximization of profits. Profit is the bar
ometer to measure the performance of the business}\par\pard\li920\ri0\sl-266\slm
ult0 \fs18\cf1\f0\charscalex100 {organisation. Hence the profit management const
itutes the scope of business economics. This is}\par\pard\li920\ri0\sl-266\slmul
t0 \fs18\cf1\f0\charscalex100 {possible through the better management of costs a
nd selling price. The profit management}\par\pard\li920\ri0\sl-266\slmult0 \fs18
\cf1\f0\charscalex100 {covers profit measurements, profit policies and technique
s of profit planning like Break Even}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf
1\f0\charscalex100 {Analysis.}\par\pard\li1520\ri0\sl-266\slmult0 \fs18\cf1\f0\c
harscalex100 {5. Capital management.}\fs18\cf1\f0\charscalex100 { Capital Manage
ment is one of the crucial aspects of business}\par\pard\li920\ri0\sl-266\slmult
0 \fs18\cf1\f0\charscalex100 {economics. The success of a business organisation
mainly depends upon the deployment of its}\par\pard\li920\ri0\sl-266\slmult0 \fs
18\cf1\f0\charscalex100 {capital on fixed assets, investments and current assets
. It requires adequate knowledge and}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf
1\f0\charscalex100 {skill to manage the capital while deploying it on assets. Th
e capital management implies planning}\par\pard\li920\ri0\sl-266\slmult0 \fs18\c
f1\f0\charscalex100 {and control of capital expenditure through better managemen
t of cost of capital, rate of return}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf
1\f0\charscalex100 {and selection of projects.}\par\pard\li1520\ri0\sl-266\slmul
t0 \fs18\cf1\f0\charscalex100 {6. Other areas.}\fs18\cf1\f0\charscalex100 { In
recent years, the development of mathematical and statistical}\par\pard\li920\ri
0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {techniques for analyzing situations
faced by the business economists have prompted their use}\par\pard\li920\ri0\sl
-266\slmult0 \fs18\cf1\f0\charscalex100 {in the Decision-Making process. Hence t
he scope of business economics is widened to other}\par\pard\li920\ri0\sl-266\sl
mult0 \fs20\cf1\f0\charscalex100 {areas, which are discussed here.}\par\pard\sec
t\sectd\sbknone\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\pard\sect\sectd\
sbkpage\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\margtsxn666\margbsxn666\
cols2\colno1\colw1520\colsr-0\colno2\colw9573\pard\li920\ri0\sl-213\slmult0 \fs1
8\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmu
lt0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920
\ri0\sl-360\slmult0 \fs22\cf1\f0\charscalex100 {8}\par\column\pard\li4746\ri0\sl
-213\slmult0 \fs18\cf0\par\pard\li4746\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4
746\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4746\ri0\sl-213\slmult0 \fs18\cf0\pa
r\pard\li4746\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4746\ri0\sl-213\slmult0 \f
s18\cf0\par\pard\li4746\ri0\sl-346\slmult0 \fs18\cf1\f0\charscalex100 {BUSINESS
ECONOMICSVOLUMEI}\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl280\slmult0 \*\tx333\*\tx4106\fs20\cf1\f0\charscalex100 {(}\fs20\cf1\f0\charscal
ex100 {a}\fs20\cf1\f0\charscalex100 {)}\tab \fs20\cf1\f0\charscalex100 {Business
economics and statistics.}\tab \fs20\cf1\f0\charscalex100 {Statistics is widely
used by the business}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\margl
sxn666\margrsxn133\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {eco
nomist. First it calls for the mastering in quantitative data and reaching usefu
l measure of}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {appr
opriate functional relationships involved in decision-making. Secondly, business
economics}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {employ
s statistical methods for empirical testing of economic generalizations. Finally
, managers}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {do not
usually have exact information about the variables affecting decisions and have
got to}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {deal with
the uncertainty of future events.}\par\pard\li1520\ri0\sl-266\slmult0 \fs18\cf1
\f0\charscalex100 {(}\fs18\cf1\f0\charscalex100 {b}\fs18\cf1\f0\charscalex100 {)
}{ }\fs18\cf1\f0\charscalex100 {Business economics and mathematics.}\fs18\cf1\f0
\charscalex100 { Mathematics provides a set of tools, which}\par\pard\li920\ri0\
sl-266\slmult0 \fs18\cf1\f0\charscalex100 {help in the derivation, and expositio
n of economic analysis. Business economics is metrical}\par\pard\li920\ri0\sl-26
6\slmult0 \fs18\cf1\f0\charscalex100 {because it estimating economic relationshi
ps and predict the relevant economic factors for}\par\pard\li920\ri0\sl-266\slmu

lt0 \fs18\cf1\f0\charscalex100 {decision-making and forward planning. While esti
mating and predicting the economic factors}\par\pard\li920\ri0\sl-266\slmult0 \f
s18\cf1\f0\charscalex100 {the mathematical tools and concepts such as Logarithms
and Exponential, Vectors, Determinants}\par\pard\li920\ri0\sl-266\slmult0 \fs20
\cf1\f0\charscalex100 {and Matrix Algebra, Calculus, differential, integral are
used.}\par\pard\li1520\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {(}\fs20\cf
1\f0\charscalex100 {c}\fs20\cf1\f0\charscalex100 {)}\fs20\cf1\f0\charscalex100 {
Business economics and operations research.}\fs20\cf1\f0\charscalex100 { The
significant relationship}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charsca
lex100 {between business economics and operations research can be highlighted wi
th reference to certain}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscal
ex100 {important problem of managerial economics which are solved with the help
of operations research}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscale
x100 {techniques like linear programming, inventory models, game theory etc. The
problems of business}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex
100 {economics are allocation problems, competitive problems, waiting line probl
ems and inventory}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100
{problems.}\par\pard\li1520\ri0\sl-266\slmult0 \*\tx1866\fs20\cf1\f0\charscalex1
00 {(}\fs20\cf1\f0\charscalex100 {d}\fs20\cf1\f0\charscalex100 {)}\tab \fs20\cf1
\f0\charscalex100 {Business economics and accounting.}\fs20\cf1\f0\charscalex100
{ Business economics is also related to}\par\pard\li920\ri0\sl-266\slmult0 \fs
18\cf1\f0\charscalex100 {accounting. Accounting is concerned with recording the
financial operations of a business firm}\par\pard\li920\ri0\sl-266\slmult0 \fs18
\cf1\f0\charscalex100 {and also it is source of data for decision making. The pr
ofit and loss accounting will help the}\par\pard\li920\ri0\sl-266\slmult0 \fs18\
cf1\f0\charscalex100 {business economist to decide whether to continue with the
same product or discontinue with}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0
\charscalex100 {the production. It helps to identify the variable, which should
be controlled, increased or decreased}\par\pard\li920\ri0\sl-266\slmult0 \fs20\c
f1\f0\charscalex100 {and so on.}\par\pard\li1520\ri0\sl-266\slmult0 \fs18\cf1\f0
\charscalex100 {(}\fs18\cf1\f0\charscalex100 {e}\fs18\cf1\f0\charscalex100 {)}{
}\fs18\cf1\f0\charscalex100 {Business economics and the theory of decision-makin
g.}\fs18\cf1\f0\charscalex100 { The theory of decision-}\par\pard\li920\ri0\sl-2
66\slmult0 \fs18\cf1\f0\charscalex100 {making is relatively a new subject that h
as significance in business economics. The economic}\par\pard\li920\ri0\sl-266\s
lmult0 \fs18\cf1\f0\charscalex100 {theory is based on single goal}\fs18\cf1\f0\c
harscalex100 {i.e.,}\fs18\cf1\f0\charscalex100 { maximizing of profits. The theo
ry of decision-making recognizes}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0
\charscalex100 {the multiplicity of goals and pervasiveness of uncertainty in th
e real world of management.}\par\pard\li920\ri0\sl-280\slmult0 \fs20\cf1\f0\char
scalex100 {Business operations and business environment}\par\pard\li1520\ri0\sl360\slmult0 \fs18\cf1\f0\charscalex100 {In the process of management decision-ma
king several factors influence the business.}\par\pard\li920\ri0\sl-266\slmult0
\fs18\cf1\f0\charscalex100 {These factors can be classified in to internal facto
rs or business operations since these factors}\par\pard\li920\ri0\sl-266\slmult0
\fs18\cf1\f0\charscalex100 {are the business activities within the firm, which
influence the business and external factors}\par\pard\li920\ri0\sl-266\slmult0 \
fs20\cf1\f0\charscalex100 {which are not in the purview of the internal activiti
es of the business firm.}\par\pard\li920\ri0\sl-453\slmult0 \fs20\cf1\f0\charsca
lex100 {Business operations}\par\pard\li1520\ri0\sl-360\slmult0 \fs18\cf1\f0\cha
rscalex100 {There are certain factors which are controllable or }\fs18\cf1\f0\ch
arscalex100 {within the control of business houses;}\par\pard\li920\ri0\sl-266\s
lmult0 \fs18\cf1\f0\charscalex100 {such as cost, quality, reduction of wastage,
increasing productivity, team development, increasing}\par\pard\li920\ri0\sl-266
\slmult0 \fs18\cf1\f0\charscalex100 {the skill, abilities and knowledge of workf
orce, and the like. They are within the bounds of}\par\pard\li920\ri0\sl-266\slm
ult0 \fs18\cf1\f0\charscalex100 {business, hence, they are called as business op
eration. The decision-makers have to use their}\par\pard\li920\ri0\sl-266\slmult
0 \fs18\cf1\f0\charscalex100 {due diligence, acumen for the betterment of the bu
sinesses by developing these factors for}\par\pard\li920\ri0\sl-266\slmult0 \fs2

0\cf1\f0\charscalex100 {better development of business activities.}\par\pard\li1
520\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {In simple words}{ }\fs20\cf1\
f0\charscalex100 {Business operations are the internal factors that lie within t
he}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {scope and oper
ations of a firm and hence within the control of management.}\par\pard\sect\sect
d\sbknone\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\pard\sect\sectd\sbkpag
e
7;32768}}
7;32768}}

UCTION}\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-280\sl
mult0 \fs20\cf1\f0\charscalex100 {Business Environment}\par\column\pard\li0\ri0\
sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\
ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\
li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\p
ard\li0\ri0\sl-360\slmult0 \fs22\cf1\f0\charscalex100 {9}\par\pard\sect\sectd\sb
knone\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\pard\li1520\ri0\sl-386\slm
ult0 \fs20\cf1\f0\charscalex100 {Business, it is said, is a product of environme
nt. The nature of business, location of a}\par\pard\li920\ri0\sl-266\slmult0 \fs
18\cf1\f0\charscalex100 {business environment; the product to be manufactured or
service to be rendered by the business}\par\pard\li920\ri0\sl-266\slmult0 \fs18
\cf1\f0\charscalex100 {unit; the price to be fixed and other related factors rel
ating to the business unit are determined}\par\pard\li920\ri0\sl-266\slmult0 \fs
20\cf1\f0\charscalex100 {by the environment within which the business operates.}
\par\pard\li1520\ri0\sl-280\slmult0 \fs18\cf1\f0\charscalex100 {There are certai
n factors which are uncontrollable or beyond the control of business}\par\pard\l
i920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {houses but which have consid
erable influence or bearing on the business such as political -}\par\pard\li920\
ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {legal, technological, economic, s
ocio-cultural, globalization, and natural environmental factors.}\par\pard\li152
0\ri0\sl-280\slmult0 \fs18\cf1\f0\charscalex100 {The business environment poses
threats to a firm or offers immense, opportunities for}\par\pard\li920\ri0\sl-26
6\slmult0 \fs20\cf1\f0\charscalex100 {potential market exploitation.}\par\pard\l
i1520\ri0\sl-293\slmult0 \fs18\cf1\f0\charscalex100 {William F. Glueck}{ }\fs18\
cf1\f0\charscalex100 {and}{ }\fs18\cf1\f0\charscalex100 {Lawrence R. Jauch}\fs18
\cf1\f0\charscalex100 { describes thus }\fs18\cf1\f0\charscalex100 {the environm
ent include}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {facto
rs outside, the firm which can lead to opportunities for or threats to the firm.
Although}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {there a
re many factors, the most important of the sectors are socio- economic, technolo
gical,}\par\pard\li920\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {supplier,
competitors and government.}{\super \fs14\up3\cf1\f0\charscalex100 {7}}\par\pard
\li1520\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {In simple words}{ }\fs18\
cf1\f0\charscalex100 {the external factors lie outside the control of management
because}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {they are
external to the firm and are said to constitute business environment.}\par\pard
\li920\ri0\sl-480\slmult0 \fs20\cf1\f0\charscalex100 {The Role of Business Econo
mist}\par\pard\li1520\ri0\sl-386\slmult0 \fs18\cf1\f0\charscalex100 {Business ec
onomists play a very important role in the business to achieve the}\par\pard\li9
20\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {predetermined goals of an orga
nisation. The business is dynamic in nature hence the duty or}\par\pard\li920\ri
0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {task of business economist is also
fast changing. The following are some of the chief or important}\par\pard\li920\
ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {tasks of a business economist.}\p
ar\pard\li2613\ri0\sl-400\slmult0 \fs20\cf1\f0\charscalex100 {Role of Business E

conomist}\par\pard\li2613\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {1. Iden
tifying various business problems}\par\pard\li2613\ri0\sl-293\slmult0 \fs20\cf1\
f0\charscalex100 {2. Providing quantitative information}\par\pard\li2613\ri0\sl306\slmult0 \fs20\cf1\f0\charscalex100 {3. Acting as a thinker, friend and philo
sopher}\par\pard\li2613\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {4. Econom
ic adviser to the firm}\par\pard\li2613\ri0\sl-306\slmult0 \fs20\cf1\f0\charscal
ex100 {5. Quickly responding to the dynamic changes}\par\pard\li2613\ri0\sl-293\
slmult0 \fs20\cf1\f0\charscalex100 {6. Conduct various types of research studies
}\par\pard\li2613\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {7. Synthesize t
he policies of different departments}\par\pard\li1586\ri0\sl-480\slmult0 \fs20\c
f1\f0\charscalex100 {1. To identify various business problems.}{ }\fs20\cf1\f0\c
harscalex100 {The business is in dynamic society, and}\par\pard\li1813\ri0\sl-26
6\slmult0 \fs20\cf1\f0\charscalex100 {hence there is a fast changing business en
vironment. The business economist has to}\par\pard\li1813\ri0\sl-266\slmult0 \fs
20\cf1\f0\charscalex100 {identify the various business problems, their causes, c
onsequences and also suggest}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\ch
arscalex100 {remedial measures to resolve these problems.}\par\pard\li1586\ri0\s
l-266\slmult0 \*\tx5960\fs18\cf1\f0\charscalex100 {2. To provide a quantitative
information.}\tab \fs18\cf1\f0\charscalex100 {The decisions of the business firm
are}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {taken on th
e basis of the previous years quantitative information. The business}\par\pard\l
i1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {economist has to create dat
abase for decision making and forward planning in the}\par\pard\li1813\ri0\sl-26
6\slmult0 \fs20\cf1\f0\charscalex100 {business organization. For example the pro
duction or sales of the firm for the next}\par\pard\li1813\ri0\sl-266\slmult0 \f
s20\cf1\f0\charscalex100 {period is always based on the previous years sales. Th
e planning activities of the}\par\pard\li920\ri0\sl-386\slmult0 \fs12\cf1\f0\cha
rscalex100 {7}\fs18\cf1\f0\charscalex100 { Glueck and Jauch, Business Policy and
Strategic Management, p.95}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840
\marglsxn666\margrsxn133\pard\sect\sectd\sbkpage\pgwsxn11893\pghsxn16840\marglsx
n666\margrsxn133\margtsxn666\margbsxn666\cols2\colno1\colw1586\colsr-0\colno2\co
lw9506\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0
\fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213
\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri
0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-360\slmult0 \fs22\cf1\f0\charsc
alex100 {10}\par\column\pard\li4680\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4680
\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4680\ri0\sl-213\slmult0 \fs18\cf0\par\p
ard\li4680\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4680\ri0\sl-213\slmult0 \fs18
\cf0\par\pard\li4680\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4680\ri0\sl-346\slm
ult0 \fs18\cf1\f0\charscalex100 {BUSINESS ECONOMICSVOLUMEI}\par\pard\li226\ri0\s
l-480\slmult0 \fs20\cf1\f0\charscalex100 {business organisation are also on the
basis of the previous years information or facts}\par\pard\li226\ri0\sl-266\slmu
lt0 \fs20\cf1\f0\charscalex100 {and figures.}\par\pard\li0\ri0\sl-280\slmult0 \f
s20\cf1\f0\charscalex100 {3. To act as a thinker, friend and philosopher.}\fs20\
cf1\f0\charscalex100 { The business economist is involved}\par\pard\li226\ri0\sl
-266\slmult0 \fs20\cf1\f0\charscalex100 {in the day today business and with a wi
de knowledge of business and the external}\par\pard\li226\ri0\sl-266\slmult0 \fs
20\cf1\f0\charscalex100 {business world. He acts as a thinker and focusses on th
e impact of changing}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex1
00 {environment on business. He should act like a friend and come to the rescue
of the}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {business o
rganisation whenever there is threat to the business. He should also suggest}\pa
r\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {the organization wit
h his forecasting vision.}\par\pard\li0\ri0\sl-266\slmult0 \fs20\cf1\f0\charscal
ex100 {4. To act as economic adviser to the firm.}\fs20\cf1\f0\charscalex100 { T
he business economist is well versed in}\par\pard\li226\ri0\sl-266\slmult0 \fs20
\cf1\f0\charscalex100 {the Economic aspects of the country like resource constra
ints, inflation, employment,}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\cha
rscalex100 {trade cycles, balance of payments, global business threats etc. He m
ust advise the}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {fi

rm about the impact }\fs20\cf1\f0\charscalex100 {of all these aspects }\fs20\cf1
\f0\charscalex100 {of economy on the }\fs20\cf1\f0\charscalex100 {business decis
ions in the}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {proce
ss of decision making.}\par\pard\li0\ri0\sl-266\slmult0 \*\tx5760\fs20\cf1\f0\ch
arscalex100 {5. He should quickly respond to the dynamic changes.}\tab \fs20\cf1
\f0\charscalex100 {The business economist}\par\pard\li226\ri0\sl-266\slmult0 \fs
20\cf1\f0\charscalex100 {should respond to dynamic changes in the business world
on the decision-making}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscal
ex100 {policies of the business. For example the }\fs20\cf1\f0\charscalex100 {bu
siness economist must profess the impact}\par\pard\li226\ri0\sl-266\slmult0 \fs2
0\cf1\f0\charscalex100 {of emergencies and sudden happenings like the gulf war,
economic recession, import}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\chars
calex100 {restrictions, dumping policies, globalisation, Asian crisis etc., on t
he business in pricing}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscale
x100 {policy, production policy etc, well on time so that the company can act an
d earn}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {reasonable
profit.}\par\pard\li0\ri0\sl-266\slmult0 \*\tx5173\fs20\cf1\f0\charscalex100 {6
. To conduct various types of research studies.}\tab \fs20\cf1\f0\charscalex100
{The business economist must}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\cha
rscalex100 {conduct various types of research studies like customers perception
of the product}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {an
d its impact on the sales, impact of monetary and fiscal policies on the perform
ance}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {of the compa
ny, impact of globalisation on the performance of the business and its}\par\pard
\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {strategies. Research studi
es must leads to }\fs20\cf1\f0\charscalex100 {solutions for the business problem
s and in}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {turn hel
p the management to take right decisions.}\par\pard\li0\ri0\sl-266\slmult0 \fs20
\cf1\f0\charscalex100 {7. To synthesize various policies formulated by different
departments.}\fs20\cf1\f0\charscalex100 { The}\par\pard\li226\ri0\sl-266\slmul
t0 \fs20\cf1\f0\charscalex100 {success of the organisation depends on the integr
ation of all the departments, the}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f
0\charscalex100 {business economist must integrate the policies of various depar
tments like production,}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscal
ex100 {purchasing, finance, marketing, R and D etc for the over all success of t
he firm. Hence}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {al
l the departments are inter related because the production department produces}\
par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {goods only when de
partments like finance, purchasing, marketing, personnel}\par\pard\li226\ri0\sl266\slmult0 \fs20\cf1\f0\charscalex100 {departments co-operate by supplying req
uired finance by the finance department,}\par\pard\li226\ri0\sl-266\slmult0 \fs2
0\cf1\f0\charscalex100 {employees by the personnel dept. sales by the sales dept
. and datasharing etc.,}\par\pard\li0\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex
100 {8. To have complete informati}\fs20\cf1\f0\charscalex100 {on about the envi
ronmental factors.}{ }\fs20\cf1\f0\charscalex100 {The business}\par\pard\li226\r
i0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {economist must have complete infor
mation about the business environment factors}\par\pard\li226\ri0\sl-266\slmult0
\fs20\cf1\f0\charscalex100 {internal and external, which influence the business
. The internal factors that influence}\par\pard\li226\ri0\sl-266\slmult0 \fs20\c
f1\f0\charscalex100 {the business are volume of output, wages and wage policy, p
ricing policy, credit policy}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\cha
rscalex100 {etc. The external factors are business cycles, availability of raw m
aterials, foreign}\par\pard\li226\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100
{policy of the country etc.,}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn1684
0\marglsxn666\margrsxn133\pard\li920\ri0\sl-453\slmult0 \fs20\cf1\f0\charscalex1
00 {Responsibilities of a Business Economist}\par\pard\li1520\ri0\sl-360\slmult0
\fs20\cf1\f0\charscalex100 {In the process of achieving the predetermined tasks
of the business organisation the}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f
0\charscalex100 {business economist has to own some responsibilities and dischar
ge certain duties. They are:}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn1684

0\marglsxn666\margrsxn133\pard\sect\sectd\sbkpage
7;32768}}
7;32768}}
3\margtsxn666\margbsxn653\cols3\colno1\colw2613\colsr-0\colno2\colw6706\colsr-0\
colno3\colw1773\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-21
3\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\r
i0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard
\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-346\slmult0 \fs18\cf1\
f0\charscalex100 {INTRODUCTION}\par\column\pard\li0\ri0\sl-213\slmult0 \fs18\cf0
\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18
\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \
fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmul
t0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\s
lmult0 \fs18\cf0\par\pard\li0\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {Res
ponsibilities of Business Economist}\par\pard\li0\ri0\sl-293\slmult0 \fs20\cf1\f
0\charscalex100 {1. Ensure profit to the organisation}\par\pard\li0\ri0\sl-306\s
lmult0 \fs20\cf1\f0\charscalex100 {2. Make successful business forecasts}\par\pa
rd\li0\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {3. Creat good trend to man
agement}\par\pard\li0\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {4. Maintain
contact with individuals and data sources}\par\pard\li0\ri0\sl-293\slmult0 \fs2

0\cf1\f0\charscalex100 {5. Interpreting and explain the economic literature}\par
\pard\li0\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {6. Preparing business s
peeches to executives}\par\pard\li0\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex10
0 {7. Participate in public debates, workshop, seminars etc.,}\par\pard\li0\ri0\
sl-306\slmult0 \fs20\cf1\f0\charscalex100 {8. Enhance his own status in the org
anisation.}\par\column\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl
0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-360\slmult0 \fs22\cf1\f0\char
scalex100 {11}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\marglsxn666\m
argrsxn133\pard\li1586\ri0\sl-413\slmult0 \fs20\cf1\f0\charscalex100 {1. To ensu
re reasonable amount of profit to the organisation.}\fs20\cf1\f0\charscalex100 {
The success or}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100
{failure of the organisation depends upon the profitability of the firm hence he
should}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {help the
organisation in earning reasonable amount of profit. If the organisation earns}
\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {reasonable amoun
t of profit, it increases the reputation of the company, the value of}\par\pard\
li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {the shares in the market e
tc.}\par\pard\li1586\ri0\sl-266\slmult0 \*\tx7133\fs18\cf1\f0\charscalex100 {2.
To make successful forecasts of the organisation.}\tab \fs18\cf1\f0\charscalex10
0 {Future is uncertain. The}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\c
harscalex100 {success of any business depends on the }\fs20\cf1\f0\charscalex100
{forecasts that the business organisation does.}\par\pard\li1813\ri0\sl-266\slm
ult0 \fs20\cf1\f0\charscalex100 {Hence the business economist must make short te
rm and long term forecasts of the}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\
f0\charscalex100 {production, sales, distribution, profit, finance etc.}\par\par
d\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {3. To assure a particula
r trend to management.}\fs20\cf1\f0\charscalex100 { With the rich experience an
d}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {business knowl
edge the business economist should see that a particular good trend}\par\pard\li
1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {should be created in product
ion, sales and profit to the management to declare dividend}\par\pard\li1813\ri0
\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {and to increase the wealth of the sh
areholders.}\par\pard\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {4. T
o establish and maintain contact with individuals and data sources.}\fs20\cf1\f0
\charscalex100 { The}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex
100 {success of the business depends on accuracy of forecast. The accuracy of fo
recast}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {depends u
pon the sources of data and the contacts of the business economist with the}\par
\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {awareness of availab
le sources and personal contacts. He should join professional}\par\pard\li1813\r
i0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {associations and take active inter
est in them.}\par\pard\li1586\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {5.
To interpret and explain economic literature to management.}\fs18\cf1\f0\charsca
lex100 { The important}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscal
ex100 {responsibility of the business economist is to analyse the available data
and interpret}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {t
he data to the management in the form of value added statements, tables, charts
and}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {diagrams thr
ough power point presentation for effective communication.}\par\pard\li1586\ri0\
sl-266\slmult0 \*\tx6506\fs18\cf1\f0\charscalex100 {6. To prepare speeches for b
usiness executives.}\tab \fs18\cf1\f0\charscalex100 {Since the executives doesnt
have}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {the overal
l knowledge of the business and business environment, the business}\par\pard\li1
813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {economist must prepare speech
es to the business executives to present them in the}\par\pard\li1813\ri0\sl-266
\slmult0 \fs20\cf1\f0\charscalex100 {workshops and seminars at national and inte
rnational level to represent the}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f
0\charscalex100 {organisation. Now a days the success of the company depends upo
n how the business}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex10
0 {executives present the information of the company to the customers at various
}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {exhibitions, se
minars, workshops, discussion tables etc.}\par\pard\li1586\ri0\sl-266\slmult0 \f
s18\cf1\f0\charscalex100 {7. To participate in public debates, work shops, semin
ars etc. to update the}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscal
ex100 {knowledge.}\fs20\cf1\f0\charscalex100 { The business economist must parti
cipate in public debates, workshops}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf
1\f0\charscalex100 {and seminars and interact with the competent persons and upd
ate his knowledge.}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex10
0 {This in turn helps the management to take right decisions with the updated kn
owledge.}\par\pard\li1586\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {8. To e
nhance his own status in the organisation.}\fs18\cf1\f0\charscalex100 { The busi
ness economist must}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex1
00 {identify himself in the organisation through his knowledge, involvement in t
he}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {successful ru
nning of the company.}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\margl
sxn666\margrsxn133\pard\sect\sectd\sbkpage
7;32768}}
7;32768}}

0 \fs18\cf0\par\pard\li920\ri0\sl-360\slmult0 \fs22\cf1\f0\charscalex100 {12}\pa
r\pard\li920\ri0\sl-466\slmult0 \fs20\cf1\f0\charscalex100 {Uses of Business Eco
nomics}\par\column\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213
\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl
0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-346\slmult0 \fs18\cf1\f0\charscal
ex100 {BUSINESS ECONOMICSVOLUMEI}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn
16840\marglsxn666\margrsxn133\pard\li1520\ri0\sl-360\slmult0 \fs20\cf1\f0\charsc
alex100 {The business manger has to take several decisions in his day to day bus
iness and also he}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100
{has to do forward planning. For the successful decision-making and forward plan
ning, the}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {manager
must have the thorough knowledge of business economics. The business economics
is}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {useful to the
business manager in several ways. They are discussed below.}\par\pard\li2613\ri0
\sl-400\slmult0 \fs20\cf1\f0\charscalex100 {Uses of Business Economics}\par\pard
\li2613\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {1. It provides suitable t
ool kit of economic principles to}\par\pard\li2906\ri0\sl-293\slmult0 \fs20\cf
1\f0\charscalex100 {solve business problems}\par\pard\li2613\ri0\sl-306\slmult0
\fs20\cf1\f0\charscalex100 {2. Incorporates useful ideas from other disciplines}
\par\pard\li2613\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {3. Reaching a va
riety of business decisions}\par\pard\li2613\ri0\sl-306\slmult0 \fs20\cf1\f0\cha
rscalex100 {4. Makes a manager more competent model builder}\par\pard\li2613\ri0
\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {5. Serves as an integrating agent}\p
ar\pard\li2613\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {6. Acts as an agen
t between firm and society.}\par\pard\li1586\ri0\sl-480\slmult0 \fs20\cf1\f0\cha
rscalex100 {1.}{ }\fs20\cf1\f0\charscalex100 {The business economics}{ }\fs20\cf
1\f0\charscalex100 {provides a suitable tool kit from traditional economics}\par
\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {to solve the problem
of business management. From the economics tool kit he can}\par\pard\li1813\ri0
\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {pick relevant economic principles or
theory or economic concepts to solve the business}\par\pard\li1813\ri0\sl-266\s
lmult0 \fs20\cf1\f0\charscalex100 {problems.}\par\pard\li1586\ri0\sl-266\slmult0
\fs20\cf1\f0\charscalex100 {2.}{ }\fs20\cf1\f0\charscalex100 {It}{ }\fs20\cf1\f
0\charscalex100 {incorporates useful ideas from other disciplines}\fs20\cf1\f0\c
harscalex100 { like psychology, sociology,}\par\pard\li1813\ri0\sl-266\slmult0 \
fs20\cf1\f0\charscalex100 {statistics etc., for decision making. The application
of psychological theories to the}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\
f0\charscalex100 {business practice is necessary. For example the study of the M
aslows theory helps}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex1
00 {the marketing manager to study the movement of human beings from basic needs
to}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {safety needs
, security needs and self-actualization needs. Based on this he can diversify}\p
ar\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {the production.}\p
ar\pard\li1586\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {3.}{ }\fs18\cf1\f0
\charscalex100 {It}{ }\fs18\cf1\f0\charscalex100 {helps in reaching a variety of
business decisions}\fs18\cf1\f0\charscalex100 { in a complicated environment}\p
ar\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {like what to produ
ce, techniques of production, inputs of productions prices, size and}\par\pard\l
i1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {locations of new plants etc
.}\par\pard\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {4.}{ }\fs20\cf
1\f0\charscalex100 {It}{ }\fs20\cf1\f0\charscalex100 {makes a manager a more com
petent model builder.}\fs20\cf1\f0\charscalex100 { The business economics}\par\p
ard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {helps the manager to p
repare some model to achieve objectives through his experience}\par\pard\li1813\
ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {and research study.}\par\pard\li1

586\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {5.}{ }\fs20\cf1\f0\charscalex
100 {It}\fs20\cf1\f0\charscalex100 { serves as an integrating agent}\fs20\cf1\f
0\charscalex100 { in the functional areas like production dept,}\par\pard\li181
3\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {purchase dept, personel, financ
e, marketing department etc., of the business firm to}\par\pard\li1813\ri0\sl-26
6\slmult0 \fs20\cf1\f0\charscalex100 {achieve even conflicting goals.}\par\pard\
li1586\ri0\sl-266\slmult0 \*\tx3040\fs18\cf1\f0\charscalex100 {6.}{ }\fs18\cf1\f
0\charscalex100 {It acts as an}\tab \fs18\cf1\f0\charscalex100 {agent between fi
rm and society}\fs18\cf1\f0\charscalex100 { and tries to accomplish the role of}
\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {attaining econom
ic and social welfare.}\par\pard\li3200\ri0\sl-333\slmult0 \fs24\cf1\f0\charscal
ex100 {QUESTIONS ON THE CHAPTER}\par\pard\li4586\ri0\sl-440\slmult0 \fs20\cf1\f0
\charscalex100 {(Two marks)}\par\pard\li1586\ri0\sl-413\slmult0 \fs20\cf1\f0\cha
rscalex100 {1.}{ }\fs20\cf1\f0\charscalex100 {Define Business Economics?}\par\pa
rd\li1586\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {2.}{ }\fs20\cf1\f0\char
scalex100 {Is Business Economics a Positive science or Normative Science?}\par\p
ard\li1586\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {3.}{ }\fs20\cf1\f0\cha
rscalex100 {What is meant by Decision-Making ?}\par\pard\li1586\ri0\sl-306\slmul
t0 \fs20\cf1\f0\charscalex100 {4.}{ }\fs20\cf1\f0\charscalex100 {What does Forwa
rd Planning mean?}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\marglsxn6
66\margrsxn133\pard\sect\sectd\sbkpage
7;32768}}
7;32768}}

UCTION}\par\pard\li1586\ri0\sl-480\slmult0 \fs20\cf1\f0\charscalex100 {5.}{ }\fs
20\cf1\f0\charscalex100 {Is Business Economics a Microeconomics? Why?}\par\pard\
li1586\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {6.}{ }\fs20\cf1\f0\charsca
lex100 {What does Positive Science mean?}\par\pard\li1586\ri0\sl-293\slmult0 \fs
20\cf1\f0\charscalex100 {7.}{ }\fs20\cf1\f0\charscalex100 {Is Business Economics
is a Normative Science? Why?}\par\pard\li1586\ri0\sl-306\slmult0 \fs20\cf1\f0\c
harscalex100 {8.}{ }\fs20\cf1\f0\charscalex100 {Whether Business Economics is po
sitive or normative. If so why?}\par\pard\li1586\ri0\sl-293\slmult0 \fs20\cf1\f0
\charscalex100 {9.}{ }\fs20\cf1\f0\charscalex100 {What do you mean by Business E
nvironment?}\par\pard\li1466\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {10.}
{ }\fs20\cf1\f0\charscalex100 {What do you mean by Business Operations?}\par\par
d\li1466\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {11.}{ }\fs20\cf1\f0\char
scalex100 {Distinguish between Business Environment and Business Operations.}\pa
r\pard\li4573\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li4573\ri0\sl-333\slmult0 \f
s20\cf1\f0\charscalex100 {(Five marks)}\par\pard\li1586\ri0\sl-413\slmult0 \fs20
\cf1\f0\charscalex100 {1.}{ }\fs20\cf1\f0\charscalex100 {Mention and discuss the
chief characteristic features of Business Economics.}\par\pard\li1586\ri0\sl-30
6\slmult0 \fs20\cf1\f0\charscalex100 {2.}{ }\fs20\cf1\f0\charscalex100 {Explain
the objectives of the Business Economics.}\par\pard\li1586\ri0\sl-293\slmult0 \f
s20\cf1\f0\charscalex100 {3.}{ }\fs20\cf1\f0\charscalex100 {Distinguish between
Business Economics and Economics.}\par\pard\li1586\ri0\sl-306\slmult0 \fs20\cf1\
f0\charscalex100 {4.}{ }\fs20\cf1\f0\charscalex100 {Discuss the scope of Busines
s Economics.}\par\pard\li3266\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li3266\ri0\s
l-320\slmult0 \fs20\cf1\f0\charscalex100 {Essay Type Questions (Fifteen marks)}\
par\column\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0
\fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slm
ult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213
\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-360\slmult0 \fs22\cf1\f0\charscalex100 {1
3}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\p
ard\li1586\ri0\sl-426\slmult0 \fs20\cf1\f0\charscalex100 {1.}{ }\fs20\cf1\f0\cha
rscalex100 {What is meant by Business Economics? Explain the role and responsibi
lities of Business}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex10
0 {Economist.}\par\pard\li1586\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {2.
}{ }\fs18\cf1\f0\charscalex100 {Define Business Economics. Discuss the significa
nce of the study of Business Economics}\par\pard\li1813\ri0\sl-266\slmult0 \fs20
\cf1\f0\charscalex100 {to a Business Manager.}\par\pard\li1586\ri0\sl-280\slmult
0 \fs20\cf1\f0\charscalex100 {3.}{ }\fs20\cf1\f0\charscalex100 {Define Business
economics? Explain its characteristics.}\par\pard\li920\ri0\sl-213\slmult0 \fs18
\cf0\par\pard\li920\ri0\sl-360\slmult0 \fs24\cf1\f0\charscalex100 {SKILL DEVELOP
MENT}\par\pard\li1520\ri0\sl-440\slmult0 \fs20\cf1\f0\charscalex100 {The skill d
evelopment component is unique in the B.Com syllabus but not in Business}\par\pa
rd\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Economics. It depends up
on the teachers inclination to the subject, interest, involvement and}\par\pard\
li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {analytical bent of mind. Th
e teacher can imbibe the skill development to the students by asking}\par\pard\l
i920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {objective type questions or
giving live small case }\fs18\cf1\f0\charscalex100 {studies, facilitating the st
udents in the course}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex1
00 {of discussion and so on. In this book we made some efforts to develop some p
ractices in this}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {
direction.}\par\pard\li1520\ri0\sl-280\slmult0 \fs20\cf1\f0\charscalex100 {1.}\f
s20\cf1\f0\charscalex100 { Make the students to prepare organisation chart of a

manufacturing industry.}\par\pard\li1520\ri0\sl-293\slmult0 \fs20\cf1\f0\charsca
lex100 {2. Decision making process}\par\pard\li1520\ri0\sl-320\slmult0 \fs18\cf
1\f0\charscalex100 {The Role of Business Economist is vital in the companies' de
cision making process. In}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charsc
alex100 {each stage of business, commencing from the idea generation to the prod
uct is sold and even}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex1
00 {after sales, he helps the top management in the process of solving the probl
ems of the business.}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex1
00 {Let us take an example that you have Rs. 10,00,000 in your hand and want to
start a business}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {
project, then the role of business economist starts at the beginning of the prod
uction itself by}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {
self questioning and answering some of the questions of the various functional d
epartments.}\par\pard\li1520\ri0\sl-280\slmult0 \fs20\cf1\f0\charscalex100 {(}\f
s20\cf1\f0\charscalex100 {a}\fs20\cf1\f0\charscalex100 {)}\fs20\cf1\f0\charscale
x100 { Production Department}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\ch
arscalex100 {What product to produce / manufacture?}\par\pard\li1520\ri0\sl-320\
slmult0 \fs20\cf1\f0\charscalex100 {Who are the competitors?}\par\pard\li1520\ri
0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What is the design of your product?
}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\pa
rd\sect\sectd\sbkpage\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\margtsxn66
6\margbsxn666\cols3\colno1\colw1520\colsr-0\colno2\colw4746\colsr-0\colno3\colw4
826\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-213\slmult0 \f
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ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\
li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-413\slmult0 \fs20\cf1\f0\ch
arscalex100 {What are the product strengths in design?}\par\pard\li0\ri0\sl-320\
slmult0 \fs20\cf1\f0\charscalex100 {What is the level of production quantity?}\p
ar\pard\li0\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What is the demand fo
recast for your product?}\par\pard\li0\ri0\sl-320\slmult0 \fs20\cf1\f0\charscale
x100 {(}\fs20\cf1\f0\charscalex100 {b}\fs20\cf1\f0\charscalex100 {)}\fs20\cf1\f0
\charscalex100 { Marketing Department}\par\pard\li0\ri0\sl-320\slmult0 \fs20\cf
1\f0\charscalex100 {How do you conduct market survey?}\par\pard\li0\ri0\sl-320\s
lmult0 \fs20\cf1\f0\charscalex100 {What are the pricing methods of competitors?}
\par\pard\li0\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What is your method
of pricing?}\par\pard\li0\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What i
s the product life cycle?}\par\column\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\
pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\
par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\
cf0\par\pard\li0\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li0\ri0\sl-346\slmult0 \f
s18\cf1\f0\charscalex100 {BUSINESS ECONOMICSVOLUMEI}\par\pard\sect\sectd\sbknone
\pgwsxn11893\pghsxn16840\marglsxn666\margrsxn133\pard\li1520\ri0\sl-320\slmult0
\fs20\cf1\f0\charscalex100 {What are the pricing strategies of your competitors?
}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What is your pr
icing strategy?}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {
What is the network of channel of distribution?}\par\pard\li1520\ri0\sl-320\slmu
lt0 \fs20\cf1\f0\charscalex100 {What are your methods of motivating distributors
?}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What is your p
romotional strategy?}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex
100 {What are your media of advertisement, its timings and so on?}\par\pard\li15
20\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {How many days you advertising
your product?}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {(}
\fs20\cf1\f0\charscalex100 {c}\fs20\cf1\f0\charscalex100 {)}\fs20\cf1\f0\charsca
lex100 { Finance Department}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\cha
rscalex100 {What is the total capital / funds required for the project?}\par\par
d\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What is the extent of lo
ng term capital / funds, its sources and composition?}\par\pard\li1520\ri0\sl-32
0\slmult0 \fs20\cf1\f0\charscalex100 {What is the extent of short-term capital /
funds, its sources and composition?}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\c
f1\f0\charscalex100 {How to raise the funds / capital?}\par\pard\li1520\ri0\sl-3
20\slmult0 \fs20\cf1\f0\charscalex100 {What is break even point?}\par\pard\li152
0\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What are the risks involved in
raising funds? Whether they are high risk or low risk?}\par\pard\li1520\ri0\sl-3
20\slmult0 \fs20\cf1\f0\charscalex100 {Make or buy decisions?}\par\pard\li1520\r
i0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {Rate of return - capital employed?
}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {(}\fs20\cf1\f0\
charscalex100 {d}\fs20\cf1\f0\charscalex100 {)}\fs20\cf1\f0\charscalex100 { Gene
ral Decisions}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {Wh
ere to incorporate the company?}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0
\charscalex100 {What are the incentives / encouragements offered by various stat
e governments?}\par\pard\li1520\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {W
hat is the policy of the state government towards encouraging the projects?}\par
\pard\li1520\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {What are the resourc
es or factors of production available in the state in which you decided}\par\par
d\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {to start your project?}\p
ar\pard\li1520\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Think about the st
ability of state government and central government and their policies.}\par\pard
\li1586\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {3. With Rs. 500 you will
go to a books shop to purchase the goods required for your}\par\pard\li1813\ri0\
sl-266\slmult0 \fs20\cf1\f0\charscalex100 {semester. You will find books written
by various authors in each subject. But you will}\par\pard\li1813\ri0\sl-266\sl
mult0 \fs20\cf1\f0\charscalex100 {select one book on each subject of the semeste
r. This process of selection is called}\par\pard\li1813\ri0\sl-266\slmult0 \fs20
\cf1\f0\charscalex100 {what?}\par\pard\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\ch
arscalex100 {4. Assume you are an entrepreneur and give one example of your forw
ard planning in}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {
the process of Competition and diversification of products.}\par}

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