Scribd
Upload
23 views10 pages

CH 01 Introduction To Managerial Economics

The document provides an introduction to Managerial Economics, defining it as the application of economic theory and methodology to business decision-making. It outlines the characteristics, nature, and scope of Managerial Economics, emphasizing its role in analyzing business problems and facilitating rational decision-making. Additionally, it discusses the relationship of Managerial Economics with other disciplines such as management theory, psychology, and operational research.

Uploaded by

Ahmed Elmi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
23 views10 pages

CH 01 Introduction To Managerial Economics

The document provides an introduction to Managerial Economics, defining it as the application of economic theory and methodology to business decision-making. It outlines the characteristics, nature, and scope of Managerial Economics, emphasizing its role in analyzing business problems and facilitating rational decision-making. Additionally, it discusses the relationship of Managerial Economics with other disciplines such as management theory, psychology, and operational research.

Uploaded by

Ahmed Elmi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 10

ADMAS UNIVERSITY

FACULTY OF
ECONOMICS

MANAGERIAL ECONOMICS

LECTURER: AHMED M. ELMI


(ATOSHE)

February 2024
CHAPTER ONE
Introduction To Managerial Economics
After studying this unit, you should be able to
understand:
1. The Meaning of Managerial Economics.
2. The Nature and Characteristics of Managerial
Economics.
3. The Scope of Managerial Economics.
4. The Relationship of Managerial Economics with
other branches of knowledge
Meaning and Definition of Managerial Economics
• The terms “Managerial Economics” “Business
Economics” and “Economics for Managers "are often
synonyms and used interchangeably in managerial studies.
• Basically, Managerial Economics is an Applied Economics
in the sphere of business management. It is an application
of economic theory and methodology to decision-making
problems faced by the business firms. Thus, it is the
economics and tools of economics to solve the managerial
problems of business organizations.
Some important definitions of Managerial Economics are:
 “Managerial Economics is economics applied in decision-
making. It is a special branch of economics bridging the gap
between the economic theory and managerial practice. Its
stress is on the use of the tools of economic analysis in
clarifying problems in organizing and evaluating information
and in comparing alternative courses of action.” W. W. Haynes
“Managerial Economics is the integration of
economic theory with business practice for the
purpose of facilitating decision-making and forward
planning by management.” Spencer & Siegelman

 “The purpose of Managerial Economics is to show


how economic analysis can be used in formulating
business policies.” Joel Dean

 By analyzing the various definitions of managerial


economics given above, we come to the conclusion that
“managerial economics is the study of economic
theories, logic, concepts and tools of economic
analysis that are used in the process of business
decision-making by the business managers in
taking rational, correct and timely decisions.”
 Basically, managerial economics concentrates on
decision process, decision models and decision
variables. This can be explained by the following
schematic chart:-
Economic theories,
Business management,
Concepts, Methodology
Decision Problems,
and Tools

Managerial Economics
Application of Economics in analyzing and solving
Business problems

Optimum solutions to business


problems
Characteristics of Managerial Economics
The main characteristics of managerial economics is
shown the diagram below:
Micro
economic
Applied/ analysis
Economic
Business s of the
Economics firm
Characterist
ics of Acceptance
Sophisticat Managerial of use &
ed and Economics utility of
developing macro
discipline economic
variables
Emphasis Normative
on case approach
study
The nature of Managerial Economics

Science as well as an Art


Because is both knowledge acquiring and knowledge
applying discipline
Managerial Economics is

Positive and Normative science


Positive Science: is a systematic knowledge of a
particular subject wherein we study the cause and
effect of an event
a:-

Normative Science: studies things as they ought to


be. n other words, it involves value judgment or good
and bad aspects of an event. Therefore, normative
science is perspective rather than Descriptive. In
other words, it explains the phenomenon as “What is,
what was and what will be.”
Being of the determinative/perspective nature, the
focus is on what should be or business decisions
are based an value judgment considering the
beneficial and harmful aspects of such decisions
Scope of Managerial Economics
• Managerial economics comprises all those
economic concepts, theories, and tools of
analysis which can be used to analyze the
business environment and to find solutions to
practical business problems. In other words,
managerial economics is applied economics.
• The areas of business issues to which
economic theories can be applied may be
broadly divided into the following two
categories:
I. Operational or Internal issues; an
II. Environmental or External issues
Relationship of Managerial Economics with
Other Disciplines
Economics
&
Econometri
cs
Manageme Mathemati
nt Theory cs and
Statistics
R/Sh of
ME with
Other
Psychology Disciplin
& es
Organisatio Operation
n al
Behaviour Research
Operational
Research
Self Assessment Questions
1. What does economic theory contribute to
Managerial Economics?
2. What is the contribution of psychology and
organization behavior to Managerial Economics?
3. How is mathematics & statistics and operational
research useful to Managerial Economics?
4. List the important characteristics of Managerial
Economics.
5. Summarize the scope of Managerial Economics
as a learner.
6. Why should you study the Managerial Economics

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy