Nature & Scope of Business Economics | CA Foundation Economics Ch 1 | ICAI Exams | Chandan Poddar

Business Economics may be defined as the use of economic analysis to make business decisions involving the best use of an organization’s scarce resources. Economics is broadly divided into Micro Economics, which studies the behaviour of individuals and organisations within an economic system, and Macro Economics, which examines overall economic phenomena. Business Economics is a science based on Micro Economics, incorporates elements of Macro Analysis, and is also an art that uses the theory of markets and private enterprises in a pragmatic, interdisciplinary approach. The scope of Business Economics covers microeconomic theories such as demand analysis and forecasting, production and cost analysis, inventory management, market structure and pricing policies, resource allocation, capital and investment decisions, profit analysis, and risk and uncertainty analysis. It also includes macroeconomic factors like the type of economic system, stages of the business cycle, national income trends, employment, prices, savings and investment, government economic policies, financial sector operations, capital markets, socio‑economic organisations, and the social and political environment. 00:00 Introduction. 01:00 What is Economics. 04:13 Meaning of Business Economics. 06:44 Subject Matter of economics. 07:58 Nature of Business Economics. 13:12 Scope of Business Economics. 17:52 Macro Economics Applied to Environmental or External Issues. 18:31 Basic Problems of an Economy. 20:46 Economic System. 22:08 Capitalist Economy. 28:56 Socialist Economy. 33:02 Mixed Economy.