What is Business Economics all about –Economics as a discipline provides a set of concepts and precepts. –This furnish us the tools and techniques of analysis. –Economic analysis is used as an aid to understand business practices and business environment. –Such understanding facilitates business decision making.

1. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Affiliated to Institution of G.G.S.IP.U, Delhi
BUSINESS ECONOMICS
(102)
INTRODUCTION = MICRO ECONOMICS
Sarita chawla
Assistant professor

2. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
What is Business Economics
According to Spencer Singleman:” Business economics deals
with integration of economic theory with business practice for
the purpose of facilitating decision making and forward
planning by management”.
What is Business Economics all about
– Economics as a discipline provides a set of concepts and
precepts.
– This furnish us the tools and techniques of analysis.
– Economic analysis is used as an aid to understand business
practices and business environment.
– Such understanding facilitates business decision making.

3. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Scope of Business Economics

4. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Time Value of Money=Discounting
Principle
• One of the fundamental ideas in economics is
that a Rupee tomorrow is worth less than a
Rupee today. This is because of two reasons:
• To wait for future implies a sacrifice in the
present
• The future is uncertain
• The interest rate – inflation

5. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Marginalise v/s Incrementalism
• Marginal Cost- It can be defined as the change
in total cost as a result of producing one
additional unit of a commodity.
• Incremental analysis stresses on total costs
and total revenue resulting from changes in
prices, products, processes, investments etc.

6. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Difference between Micro & macro
Economics
• In spite of very close relationship between two braches
of economics, they differ from each other
fundamentally.
• It is possible for an individual to become rich by finding
bundles of rupee notes but no nation can become
richer by printing notes.
• Savings may be virtue for an individual but if every
body starts savings, there will be deficiency of
aggregate demand.
• An individual can buy more of a commodity at a given
price. But if many individuals try to buy more, the price
will shoot up.

7. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
RISK, RETURN & PROFITS
RISK, RETURN & PROFITS
RI
R
18 D
16 RII
14 C
12 C"
Rate of Return 10 B
7.5
8 A
6
4
2
0
3.5 6 9 Risk

8. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Opportunity Cost
Opportunity Cost is the income foregone
which a businessman could expect from the
second best alternative use of his resources.
In macro sense, the opportunity cost of more
guns in an economy is less butter. Continued
diversion of funds to defense spending
amounts to a heavy tax on alternative
spending on growth & development.

9. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Market Forces and Equilibrium
• Equilibrium is the price at which demand and
supply are equal to each other
• Determinants of Equilibrium:
(a) Demand
(b) Supply
(c) Equilibrium between demand and supply
• Market equilibrium is a zero excess demand
and zero excess supply

10. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Thank You