Discussion
Business economics is essentially ......
Answer: A
The keyed answer is that business economics is essentially Applied microeconomics only.
Business (managerial) economics applies economic theory to decisions inside a firm: demand analysis and forecasting, production and cost, pricing, and capital budgeting. These are the subjects of microeconomics, the study of individual units, which is why texts such as Joel Dean's describe it as applied microeconomics.
Macroeconomic conditions such as inflation, interest rates and the business cycle form the environment in which the firm decides, so they are drawn on, but the core of the subject is micro. That is why the key rejects 'applied macroeconomics only', and does not treat the subject as an equal mix of the two or as neither.
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