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Subject : Economics
Topics : Managerial Economics, Concepts of demand & Supply , Monopoly , Distinguish between micro economics & micro economics.
Questions & Model Answers to help students worldwide , get a better understanding of the subject.
Distinguish between Micro and Macro Economics.
Broadly speaking, microeconomic analysis is individualistic, whereas macroeconomic analysis is aggregative. Microeconomics deals with the part (individual) units while macroeconomics deals with the whole (all units taken together) of the economy.
1. Difference in nature: Microeconomics is the study of the behavior of the individual units. Macroeconomics is the study of the behavior of the economy as a whole.
2. Difference in methodology: Microeconomics is individualistic; whereas macroeconomics is aggregative in its approach.
3. Difference in economic variables: Microeconomics is concerned with the behavior of micro variables or micro quantities. Macroeconomics is concerned with the behavior of macro variables and macro quantities. In short, microeconomics deals with the individual incomes and output, whereas macroeconomics deals with the national income and national output.
4. Difference in field of interest: Microeconomics primarily deals with the problems of pricing and income distribution. Macroeconomics pertains to the problems of the size of national income, economic growth and general price level.
5. Difference in outlook and scope: The concept of ‘industry’ in microeconomics is an aggregate concept but it refers to all firms producing homogenous goods taken together. Macroeconomics uses aggregates which relate to the entire economy or to a large sector of the economy. Aggregate demand covers all market demands.
6. Demarcation in areas of study: Theories of value and economic welfare are major areas in microeconomics. Theories of Income and employment are core topics in macroeconomics.
1. Define Managerial Economics.
Managerial economics is a specialized discipline of management studies which deals with application of economic theory and techniques to business management. Managerial economics is evolved by establishing links on integration between economic theory and decision sciences (tools and methods of analysis) along with business management in theory and practice---for optimal solution to business/managerial decision problems. This means, managerial economics pertains to the overlapping area of economics along with the tools of decision sciences such as mathematical economics, statistics and econometrics as applied to business management problems.
“Managerial economics is a science which studies the economic aspects of behavior of the firm as an enterprise, and helps to allocate scarce resources to their alternative uses in such a manner as to optimize the firm’s ultimate objective, as an organization and a social institution, under conditions of the imperfect knowledge, risk and uncertainty. It provides principles, method, and techniques of analysis of economic behaviour and at the same time prescribe ways and means to optimize economic efficiency.”
2. Discuss the nature and scope of Managerial Economics. What are the other related disciplines?
Nature and Scope of Managerial Economics:
All managerial decisions are basically economic in nature. The decisions are either directly related to Economics or have economic implications; they might not be based simply on economic calculations, and might involve several non-economic, social, political, legal and technological considerations as well. Managerial economics helps not only to analyze the economic content and implications of the managerial decisions but also to integrate several other aspects leading to sound decisions.
Managerial economics incorporates elements of both micro and macroeconomics dealing...