Business economics and accounting
Managerial economics is closely related to accounting. It is recording the financial operation of a business firm. A business is started with the main aim of earning profit. Capital is invested / employed for purchasing properties such as building, furniture, etc and for meeting the current expenses of the business. Management accounting provides the accounting data for taking business decisions. The accounting techniques are very essential for the success of the firm because profit maximisation is the major objective of the firm.Business economics and mathematics :
The use of mathematics is significant for managerial economics in view of its profit maximisation goal long with optional use of resources. The major problem of the firm is how to minimise cost , how to maximise profit or how to optimise sales. Mathematical concepts and techniques are widely used in economic logic to solve these problems. Geometry, Algebra and Calculus are the major branches of mathematics which are of use in business economics.
Business economics and statistics :
Statistics is important to business economics. It provides the basis for the empirical testing of theory. It provides the individual firm with measures of appropriate functional relationship involved in decision making. Statistics is a very useful science for business executives because a business runs on estimates and probabilities. Statistical tools are widely used in the solution of business problems. For eg. sampling is very useful in data collection. Business economics makes use of correlation and multiple regression in business problems involving some kind of cause and effect relationship.
Business economics and operations research :
Operation Research provides a scientific model of the system and it helps business economists in the field of product development, material management, and inventory control , quality control , marketing and demand analysis. The varied tools of operational research are helpful to business economists in decision making.
Business economics and theory of decision making :
The theory of decision making is relatively a new subject that has a significance for business economics. In the process of management such as planning, organising, leading and controlling, decision making is always essential. Decision making is an integral part of today’s business management. A manager faces a number of problems connected with his/her business such as production, inventory, cost, marketing, pricing, investment and personnel.
Economist are interested in the efficient use of scarce resources hence they are naturally interested in business decision problems and they apply economics in management of business problems. Hence business economics is economics applied in decision making.
