10 main difference between economics and business economics
Answers
Explanation:
In today’s complex global market and economies, it is important to know what direction do you want to take especially if you are getting started on your career path. Business and economics go side by side, wherein, businesses offer products and services that generate economic output, for example, businesses sell goods and services to consumers, whereas, economics determine the supply and demand of such products in a particular economy. Despite the above mentioned relationship between these two branches of social sciences, they are different from each other.
What are Economics and Business?
Economics
Economics is about carefully and analytically studying the human behavior with regards to limited incentives or resources. It is a branch of social science that studies the decisions and actions of employees, firms, customers, individuals, and governments, in order to identify their impact on the economy of a country. It is related to a large number of subject matters, including but not limited to politics, mathematics, international relationships, etc.
Business
Business, on the other hand, is an economic system whereby goods and services are exchanged between two or more parties for money. Every business needs different forms of funds, and customer base to whom it can sell its product on a regular basis in order to make profits.
It is about maximizing the value of wealth with respect to the behavior of people. It consists of a collection of different activities and organizational behavior, including finance, accounting, management, business strategy, human resource, sales and marketing, product development and analysis.
It also takes into account the external factors of an economy, political situation of a nation, and government laws and regulations to assess how it will impact an organization and an industry as a whole. Furthermore, it also analyzes the rapidly changing environmental conditions so as to see their impact on the overall value.
1) Key Concepts
Economics
The key concepts of economics are supply and demand, the rate of interest, the rate of exchange, production, inflation, international trade, balance of payment, and more. Economics enables individuals to think with logical reasoning and to read theories, so that they can be applied in understanding the mechanism of economies around the world.
It allows people to be able to comprehend the complex issues of an economy in such a way that they are able to gain benefit out of it.
Business
The key concept of a business is to earn profit and to maximize shareholder’s wealth. An increase in the wealth of business eventually increases the stock prices of a company, which consequently increases shareholders’ net worth.