The word economy comes from a Greek word one manages a household. for
Unlimited choice
Limited resources
scarcity
What to produce?
How to produce?
Economics : Science of scarcity Scarce resources for society : Land Labour (L) Capital (K) Skill Scarce resources of a business unit : Men Machine Material Money Mineral Unlimited desires : Profitability ()
What is Economics
Economics is the study of how society manages its scarce resources.
Economics as a science is concerned with the problem of allocation of scarce resources among competing ends (Desires).
Managerial economics is the branch of economics which deals with managing the scarce resources of a firm.
Managerial economics uses the tools and techniques of economic theory for effective and efficient utilization of economic resources, in order to optimize the profitability of a business organization.
Managerial Economics is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by the management. Spencer & Siegel man
Managerial Economics
Micro & Macro Economics Microeconomics focuses on the behaviour of the individual actors on the economic stage i.e. firms and individuals and their interaction to markets. Managerial economics should be thought of as applied microeconomics. Macroeconomics is the study of economic system as a whole. It includes techniques for analyzing changes in total output, total employment, consumer price index, unemployment rate, exports and imports. Macroeconomics addresses questions about the effect of changes in investment, government spending, tax policy on exports, output, employment, prices
Scope of Managerial Economics Demand Analysis and Demand Forecasting Production Analysis Cost Analysis Pricing and Output Profit Management
Relationship of ME with other disciplines Mathematics : Geometry , algebra, calculus , determinants , vectors. Operations Research: Linear Programming , Queuing Statistics : Theory of probability Traditional Economics :