Nature and Scope of Managerial Economics
Unit – I Nature & Scope of Managerial Economics
Contents
Fundamental Economics Concepts: Opportunity Cost, Discounting principle, Time perspective, Incremental reasoning, Equi-marginal concept. Marginal concept in economics.
Economics of information: Risk, Uncertainty, Asymmetry of information, Adverse Selection, Market Signaling.
The theory of firm; Econometric Models & Economic optimization.
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Economics Basics: Introduction
Economics is a social science which studies economic activities of man. Economic activities are related to production, consumption, distribution, exchange, public finance, planning etc. Adam Smith, who is unanimously regarded as the father of Economics defines Economics as a study of wealth. Economics may appear to be the study of complicated tables and charts, statistics and numbers, but, more specifically, it is the study of what constitutes rational human behavior in the endeavor to fulfill needs and wants.
As an individual, for example, you face the problem of having only limited resources with which to fulfill your wants and needs, as a result, you must make certain choices with your money. You'll probably spend part of your money on rent, electricity and food. Then you might use the rest to go to the movies and/or buy a new pair of jeans. Economists are interested in the choices you make, and inquire into why, for instance, you might choose to spend your money on a new DVD player instead of replacing your old TV. They would want to know whether you would still buy a carton of cigarettes if prices increased by $2 per pack. The underlying essence of economics is trying to understand how both individuals and nations behave in response to certain material constraints. ((To learn how economic factors are used in currency trading, read Forex Walkthrough: Economics.)
We can say, therefore, that economics, often referred to as the "dismal
Contents
Fundamental Economics Concepts: Opportunity Cost, Discounting principle, Time perspective, Incremental reasoning, Equi-marginal concept. Marginal concept in economics.
Economics of information: Risk, Uncertainty, Asymmetry of information, Adverse Selection, Market Signaling.
The theory of firm; Econometric Models & Economic optimization.
____________________________________________________________________________________
Economics Basics: Introduction
Economics is a social science which studies economic activities of man. Economic activities are related to production, consumption, distribution, exchange, public finance, planning etc. Adam Smith, who is unanimously regarded as the father of Economics defines Economics as a study of wealth. Economics may appear to be the study of complicated tables and charts, statistics and numbers, but, more specifically, it is the study of what constitutes rational human behavior in the endeavor to fulfill needs and wants.
As an individual, for example, you face the problem of having only limited resources with which to fulfill your wants and needs, as a result, you must make certain choices with your money. You'll probably spend part of your money on rent, electricity and food. Then you might use the rest to go to the movies and/or buy a new pair of jeans. Economists are interested in the choices you make, and inquire into why, for instance, you might choose to spend your money on a new DVD player instead of replacing your old TV. They would want to know whether you would still buy a carton of cigarettes if prices increased by $2 per pack. The underlying essence of economics is trying to understand how both individuals and nations behave in response to certain material constraints. ((To learn how economic factors are used in currency trading, read Forex Walkthrough: Economics.)
We can say, therefore, that economics, often referred to as the "dismal