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Economic Analysis for Business

Economic Analysis for Business

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Published by Jaganya Babu
Some fundamental introduction of economic
Some fundamental introduction of economic

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Categories:Types, Business/Law
Published by: Jaganya Babu on Oct 10, 2010
Copyright:Attribution Non-commercial

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07/10/2013

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Economic analysis for business
Definition
Economics is a science which studies the economic activities of man and of the community.Economics is the social science that analyzes the production, distribution, and consumption of goods and services.According to Alfred Marshall, economic is defined as ³the economic is study of mankind in theordinary business of life; it deals with man¶s day to days life of his work, of his income and ohis expenditure´.
How economic problem arise?
y
 
Man has unlimited wants or ends.
y
 
T
he means to satisfy human wants are limited.
y
 
esources have alternative uses.
y
 
W
e have to make a choice.
S
cope of the economics
 
T
hus economics is not concerned so much with the analysis of the consumption, production exchange and distribution of wealth as with a special aspect of human behavior-that of allocating scarce means among competing ends.
 
 
T
he subject matter of economics includes the daily activities of the household, of thecompetitive business world and the administration of public resources in order to solvethe problem of scarcity of resources.
 
T
he subject matter of economics includes the study of the problems of consumption, production, exchange and distribution of wealth as well as the determination of the valuesof goods, and services, the volume of employment and the determinants of economicgrowth.
 
I
t includes the study of the causes of poverty unemployment, under development,inflation etc. and steps for their removal.
Fu
ndamental problems of economics
y
 
W
hat to produce?
y
 
H
ow to produce?
y
 
T
o whom to produce?
W
hat to produce?Every economy has only limited resources and cannot produce all goods accordingly it has tochoose between different goods and services.
 
W
hat goods and services should be produces
 
W
hat verities of each commodity
 
H
ow much of each verity of a commodity should be produced
H
ow to produce?
I
n an economy has decided to produced certain goods and services, the economy has then todecide how these goods and services will be produced.
 
T
he extend of resources to the economy in term of natural resources, labor and capital.
 
T
he quality or efficiency of the factors of production.
 
T
he nature of technology available to the community.
W
hom to produce?
T
he goods and services are produced for the people and more specifically for those who havethe necessary means to pry for them. ³One cannot have everything one requires´.
I
f that were possible there will be no economic problems.
 
Fu
nctions of economy
 
P
roduction of goods and services.
 
C
onsumption of goods and services.
 
G
rowth
T
ypes of economy
 
S
imple and complex economy
 
eveloped, underdeveloped and developing economy
 
C
apitalist socialist and mixed economy
T
hemes of economics
I
t exposes the behavior of the financial markets including interest rate and stock prices
I
t examines, the reason why some peoples or countries have high incomes while othersare poor and suggest way that the incomes of the poor can he raised without harming theeconomy.
S
tudies business cycles the ups and downs of unemployment and inflation along with policies to moderate them.
S
tudies international trade and finance and the impacts of globalization.Looks at growth in developing countries and proposes way to encourage the efficient useof resourcesAsks how government policies can be used to pursue important goals such as rapideconomy growth, efficient use of resources, full employment, and price stability and afair distribution of income.
S
carcity and efficiency
S
carcity
Economics is the study of how societies use scares resources to produce valuablecommodities and distribute them with different peoples.
I
n this definition are two key ideas in economics
 
T
hose goods are scare
 
T
hat society must use in resources efficiently
S
carcity- there is no demand.
C
onsider a world without scarcity, if infinite quantities of everygoods world be produced or if human desire were fully satisfied.
P
eople would not worry about striating out there limited incomes they could have everythingthey wanted.

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