UNIT-1

Introduction to Economics

Definition, Nature and Scope of

Economics. Micro and Macro Economics,
Role of Economics in Decision Making.

Economics - I By: Samta Rathore www.altius.ac.in

Definition

Acc to MC.Nair & Meriam

Economics is the use of economic modes of thought to
analyse business situation.

Acc to Spencer & Siegeleman

Economics is the integration of economic theory with
business practice for the purpose of facilitating decision
making & forward planning by management

Economics - I By: Samta Rathore www.altius.ac.in

Characteristics

1.Economics is micro economic

2.Body of Concepts

3.Prescriptive

4.Conceptual

Economics - I By: Samta Rathore www.altius.ac.in

Scope of Economics

1.Demand Analysis & Forecasting

2.Cost & Production Analysis
3.Allocation of resources
4.Pricing decision & policy formulation
5.Investment Problem
6.Profit Management

Economics - I By: Samta Rathore www.altius.ac.in

 Micro & MACRO ECONOMICS

Microeconomics is the study of decisions that people and businesses make regarding the
allocation of resources and prices of goods and services. This means also taking into
account taxes and regulations created by governments. Microeconomics focuses on 
supply and demand and other forces that determine the price levels seen in the
economy. For example, microeconomics would look at how a specific company could
maximize it's production and capacity so it could lower prices and better compete in its
industry.
 
Macroeconomics, on the other hand, is the field of economics that studies the behavior of
the economy as a whole and not just on specific companies, but entire industries and
economies. This looks at economy-wide phenomena, such as Gross National Product
(GDP) and how it is affected by changes in unemployment, national income, rate of
growth, and price levels. For example, macroeconomics would look at how an
increase/decrease in net exports would affect a nation's capital account or how GDP
would be affected by unemployment rate

Economics - I By: Samta Rathore www.altius.ac.in

Role of Economics in
Decision Making…………..
• Economics applies economic theory and methods to
business and administrative decision making.

• Economics prescribes rules for improving managerial

decisions.

• Economics also helps managers recognize how

economic forces affect organizations and describes
the economic consequences of managerial behavior.

Economics - I By: Samta Rathore www.altius.ac.in

Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in
Economics - I By: Samta Rathore www.altius.ac.in