Paper presentation made by MADDALI LAXMI SWETHA, MBA (HR) Maddali Swetha Blog - http://maddaliswetha.blogspot.com/ https://in.linkedin.com/in/maddali-swetha https://twitter.com/maddali_swetha E-Mail ID: maddali_swetha@yahoo.com

1. DIFFERENCE BETWEEN
ECONOMICS AND MANAGERIAL
ECONOMICS
Maddali Laxmi Swetha, MBA (hr)
http://maddaliswetha.blogspot.com/

2. THE TERM ECONOMICS DEFINE AS
 The word 'economics' comes from two Greek words, 'eco' meaning
home and 'nomos' meaning accounts.
 Economics is that branch of knowledge which studies the processes
through which the resource which are scarce in nature are allocated to
satisfy the unlimited wants of the people.
 In other words, the economics of the individual agent's decisions about
resources is referred to as microeconomics, while macroeconomics
studies the interactions in the economy as a whole.

3. WHAT IS MANAGERIAL ECONOMICS?
 Managerial economics is a branch of economics which deals with the
application of the economic concepts, theories, tools, and
methodologies to solve practical problems in a business these business
decisions not only affect daily decisions, also affects the economic
power of long-term planning decisions.
 In other words, managerial economics is a combination of economics
theory and managerial theory. It helps the manager in decision-making
and acts as a link between practice and theory. It is sometimes referred
to as business economics and is a branch of economics that applies
microeconomic analysis to decision methods of businesses or other
management units.

4. MANAGERIAL ECONOMICS DEFINITIONS
 Managerial economics is the integration of economic theory with
business practice for the purpose of facilitating decision-making and
forward planning by management – Spencer and Siegelman
 Managerial economics is the use of economic models of thought to
analyze business situations – Mc Nair and Meriam
 Managerial economics is the application of economic theory and
methodology to business administration practice – Brigham and
Pappas

5. NATURE OF ECONOMICS
 The nature of economics deals with the question that whether
economics falls into the category of science or arts. Various economists
have given their arguments in favour of science while others have their
reservations for arts.
 Economics as a Science: 1) It involves a systematic collection of
facts and figures. 2) it is based on the formulation of theories and laws.
3). It deals with the cause and effect relationship.
 Economics as an Art: It is said that “knowledge is science, action is
art.” Economic theories are used to solve various economic problems in
society. Thus, it can be inferred that besides being a social science,
economics is also an art.

6. NATURE OF MANAGERIAL ECONOMICS
 Close to micro economics
 Operates against the backdrop of macro economics
 Normative statements
 Prescriptive actions
 Applied in nature
 Offers scope to evaluate each alternative
 Interdisciplinary

7. DIFFERENCE BETWEEN ECONOMICS AND
MANAGERIAL ECONOMICS
 The traditional Economics has both micro and macro
aspects whereas Managerial Economics is essentially micro
in character.
 Economics is both positive and normative science but the
Managerial Economics is essentially normative in nature.
 Economics deals mainly with the theoretical aspect only
whereas Managerial Economics deals with the practical
aspect.

8. DIFFERENCE BETWEEN ECONOMICS
AND MANAGERIAL ECONOMICS
 Economics studies human behavior on the basis of certain
assumptions but these assumptions sometimes do not hold
good in Managerial Economics as it concerns mainly with
practical problems.
 Under Economics we study only the economic aspect of the
problems but under Managerial Economics we have to
study both the economic and non-economic aspects of the
problems.

9. DIFFERENCE BETWEEN ECONOMICS
AND MANAGERIAL ECONOMICS
 Economics studies principles underlying rent, wages,
interest and profits but in Managerial Economics we study
mainly the principles of profit only.
 Managerial Economics studies the activities of an individual
firm or unit. Its analysis of problems is micro in nature,
whereas Economics analyzes problems both from micro
and macro point of views.

10. DIFFERENCE BETWEEN ECONOMICS
AND MANAGERIAL ECONOMICS
 Sound decision-making in Managerial Economics is
considered to be the most important task for the
improvement of efficiency of the business firm; but in
Economics it is not so.
 The scope of Managerial Economics is limited and not so
wide as that of Economics.

11. POINTS TO BE NOTED
 It is obvious that Managerial Economics is very closely
related to Economics but its scope is narrow as compared to
Economics.
 Managerial Economics is also closely related to other
subjects, viz., Statistics, Mathematics and Accounting.

12. THANK YOU
Paper presentation made by
MADDALI LAXMI SWETHA, MBA (HR)
Maddali Swetha Blog - http://maddaliswetha.blogspot.com/
https://in.linkedin.com/in/maddali-swetha
https://twitter.com/maddali_swetha
E-Mail ID: maddali_swetha@yahoo.com