IGCSE Economics Paper-2: Specimen Questions with Answers 84 - 84 of 100

Passage

Micro economics is often called price theory or value theory. Macroeconomics perceives the overall dimensions of the economic affairs of a country.

Question 84 (3 of 5 Based on Passage)

Edit

Write in Short

Short Answer▾

Trace the link of economics to major areas of management.

Explanation

There is an established link of economics as an applied science to several areas of management, such as:

Economics and production management-Production management relates to the management of production activity of a firm. A production manager must take decision such as:

  • What quantity to produce in the given line of production?
  • How to produce?
  • How to increase productivity?

For all such rational decisions in optimal utilization of the available business resources, the manager must resort to economic analysis.

  • Economics and finance: Finance is the life blood of modern economics. Growth of business needs adequate finance. Financial management determines the programs and stability in the competitive market. Major dimensions of financial management such as capital budgeting, investments allocations, depreciation, method of raising money in economical ways etc. all have their roots in economics of money banking and finance.
  • Economics and marketing: Manufacturing and marketing are integral part of a business activity. Quality of manufacturing depends on the production management and efficient use of resources. The success of business is determined by the efficient marketing.

Developed by: