The document discusses the roles of business economists and how they assist with decision making. It defines economics and distinguishes it from managerial economics. Business economists help organizations make optimal decisions by analyzing external and internal factors, forecasting demand, and applying economic principles. They identify problems, potential solutions, and recommend the best alternative using quantitative techniques to maximize profits and achieve objectives.
1) Consumption theories developed by Milton Friedman and Franco Modigliani view consumption as based on permanent income and the life cycle.
2) A consumer's consumption is determined by their total wealth, including nonhuman wealth like financial assets and housing, and human wealth as the present value of expected future labor income.
3) Consumption depends on current income as well as total wealth and expectations about future income, interest rates, taxes, and asset values affect consumption directly and indirectly.
This document outlines the syllabus for a Business Economics course. It includes required texts, grading criteria, and an overview of key economic concepts to be covered throughout the semester. Specifically, it will cover microeconomics and macroeconomics topics, including scarcity, production possibility frontiers, demand and supply analysis, and the role of economics in managerial decision making. Students will be evaluated based on class participation, assignments, presentations, exams and a final exam.
This document provides an introduction to corporate finance. It discusses that corporate finance involves managing a company's assets and financing decisions. This includes capital budgeting, credit policy, cash management, and decisions around capital structure, equity financing, dividends, and borrowing. The goals of corporate finance are to determine what long-term investments a firm should make, how to raise money for investments, and how much cash is needed for short-term obligations.
This document summarizes several theories of the firm, including:
1) Managerial theories propose that managers pursue maximum growth or sales revenue to increase their power, status, and job security rather than maximizing profits.
2) Baumol's theory suggests managers maximize sales subject to a minimum profit constraint.
3) Marris's theory argues managers maximize growth rates at the expense of future profits to satisfy their own utility functions.
4) Williamson's theory proposes managers maximize their own utility from variables like staff spending, benefits, and discretionary profits.
5) Cyert and March's behavioral theory defines the firm by its decision-making processes and argues managers set satisficing goals that reconcile various stakeholder interests
Managerial economics applies economic concepts and analysis to help managers make rational decisions. It is used in areas like investment assessment, product choice, and output determination. Common applications include risk analysis, production analysis, pricing analysis, and capital budgeting. The document then discusses the scope of managerial economics and some specific concepts like demand decision and production decision.
The document discusses the role of financial management. It defines key terms like finance, business finance, and financial management. Financial management involves acquisition, financing, and management of assets with an overall goal in mind. The goal of the firm is maximizing shareholder wealth through decisions around investment, financing, and asset management. Modern corporations have a separation of owners and managers, with management acting as an agent for shareholders.
This document introduces corporate finance and the goals of corporate firms. It discusses three key questions corporate finance addresses: what investments a firm should engage in, how to raise money for investments, and how much cash is needed for short-term obligations. It also summarizes different business forms, the balance sheet model, and how debt and equity are contingent claims on firm value. Finally, it discusses traditional and alternative views on corporate goals, including profit maximization, earnings per share, and shareholder wealth maximization.
1. Managerial economics applies economic theory to business decision making and planning. It deals with optimal allocation of limited resources.
2. The document outlines the scope of managerial economics including demand analysis, cost analysis, pricing decisions, and profit and capital management. It also discusses fundamental economic concepts applied to business like opportunity cost, risk, and elasticity.
3. Managerial economics helps managers with production scheduling, demand forecasting, pricing, and understanding external market factors to inform business strategy and policy.
1) Consumption theories developed by Milton Friedman and Franco Modigliani view consumption as based on permanent income and the life cycle.
2) A consumer's consumption is determined by their total wealth, including nonhuman wealth like financial assets and housing, and human wealth as the present value of expected future labor income.
3) Consumption depends on current income as well as total wealth and expectations about future income, interest rates, taxes, and asset values affect consumption directly and indirectly.
This document outlines the syllabus for a Business Economics course. It includes required texts, grading criteria, and an overview of key economic concepts to be covered throughout the semester. Specifically, it will cover microeconomics and macroeconomics topics, including scarcity, production possibility frontiers, demand and supply analysis, and the role of economics in managerial decision making. Students will be evaluated based on class participation, assignments, presentations, exams and a final exam.
This document provides an introduction to corporate finance. It discusses that corporate finance involves managing a company's assets and financing decisions. This includes capital budgeting, credit policy, cash management, and decisions around capital structure, equity financing, dividends, and borrowing. The goals of corporate finance are to determine what long-term investments a firm should make, how to raise money for investments, and how much cash is needed for short-term obligations.
This document summarizes several theories of the firm, including:
1) Managerial theories propose that managers pursue maximum growth or sales revenue to increase their power, status, and job security rather than maximizing profits.
2) Baumol's theory suggests managers maximize sales subject to a minimum profit constraint.
3) Marris's theory argues managers maximize growth rates at the expense of future profits to satisfy their own utility functions.
4) Williamson's theory proposes managers maximize their own utility from variables like staff spending, benefits, and discretionary profits.
5) Cyert and March's behavioral theory defines the firm by its decision-making processes and argues managers set satisficing goals that reconcile various stakeholder interests
Managerial economics applies economic concepts and analysis to help managers make rational decisions. It is used in areas like investment assessment, product choice, and output determination. Common applications include risk analysis, production analysis, pricing analysis, and capital budgeting. The document then discusses the scope of managerial economics and some specific concepts like demand decision and production decision.
The document discusses the role of financial management. It defines key terms like finance, business finance, and financial management. Financial management involves acquisition, financing, and management of assets with an overall goal in mind. The goal of the firm is maximizing shareholder wealth through decisions around investment, financing, and asset management. Modern corporations have a separation of owners and managers, with management acting as an agent for shareholders.
This document introduces corporate finance and the goals of corporate firms. It discusses three key questions corporate finance addresses: what investments a firm should engage in, how to raise money for investments, and how much cash is needed for short-term obligations. It also summarizes different business forms, the balance sheet model, and how debt and equity are contingent claims on firm value. Finally, it discusses traditional and alternative views on corporate goals, including profit maximization, earnings per share, and shareholder wealth maximization.
1. Managerial economics applies economic theory to business decision making and planning. It deals with optimal allocation of limited resources.
2. The document outlines the scope of managerial economics including demand analysis, cost analysis, pricing decisions, and profit and capital management. It also discusses fundamental economic concepts applied to business like opportunity cost, risk, and elasticity.
3. Managerial economics helps managers with production scheduling, demand forecasting, pricing, and understanding external market factors to inform business strategy and policy.
This document provides an overview of microeconomics. It defines economics as the study of how societies allocate scarce resources to produce and distribute goods and services. The document outlines different types of economic systems and explains that most modern economies are mixed, with roles for both markets and governments. It also summarizes key microeconomic concepts like supply and demand, market equilibrium, and the role of prices in signaling resource allocation.
The Net Income (NI) approach proposes that a firm's value increases as it takes on more debt financing due to debt generally being a cheaper source of capital than equity. According to the NI approach, the costs of debt and equity remain constant regardless of capital structure, so the overall cost of capital declines as debt levels rise. However, the NI approach assumes unrealistic conditions like taxes being ignored and that more debt does not affect investor risk perceptions. It implies the maximum firm value occurs with 100% debt financing.
This document discusses agency problems that can arise in principal-agent relationships. Specifically:
- An agency problem occurs when the interests of the principal and agent conflict, as the agent may act in their own interest rather than the principal's.
- In finance, the two main agency relationships are between managers and stockholders, and managers and creditors.
- Agency costs are incurred to try to align the agent's actions with the principal's interests, including contracting, monitoring, and losses from unresolved problems. Monitoring and compensation schemes aim to resolve these conflicts.
Managerial economics applies economic concepts and tools to help managers make rational decisions and solve business problems efficiently. It borrows theories from microeconomics and tools from decision science. The goal is to find optimal solutions to business problems by integrating economic theory, quantitative techniques, and business practice. Managerial economics helps maximize firm effectiveness by facilitating resource allocation and policy formulation. It deals with topics like production, costs, pricing, demand, and market structure at the firm level.
Macroeconomics deals with the economy as a whole, examining aggregates like total income, output, employment and prices. It emerged as a separate field of study due to Keynes' analysis of the Great Depression when existing theories failed to explain high unemployment. The circular flow model illustrates how income and spending circulate between producers and consumers in an economy.
There are three main managerial theories described in the document:
1. Baumol's Model of Sales Revenue Maximization suggests that managers pursue sales maximization over profit maximization to boost their prestige, power, and job security.
2. Marris's Theory of Managerial Enterprise notes the separation of ownership and management allows managers to set goals that benefit themselves rather than owners, such as prioritizing growth over profits.
3. Williamson's Theory of Managerial Discretion discusses how managers have discretion over decisions and may not always act in the owners' best interests.
It includes important Definitions of economics and managerial economics. Also includes related topics like Micro and Macro Economics, objectives of a firm and various profit maximization models.
In mathematics and economics, transportation theory or transport theory is a name given to the study of optimal transportation and allocation of resources.A transportation matrix is a way of understanding the maximum possibilities the shipment can be done. It is also known as decision variables because these are the variables of interest that we will change to achieve the objective, that is, minimizing the cost function.
This document provides an introduction to managerial economics. It defines economics as the study of human economic activity and wealth. It discusses microeconomics as the study of individual consumers and firms, and macroeconomics as the study of aggregate economic activity in a country. Managerial economics bridges traditional economics theory and real business practices by providing tools to help managers make competent decisions. It operates within the constraints of macroeconomic conditions and suggests prescriptive actions to optimally solve problems given a firm's objectives. The scope of managerial economics includes decisions around product selection, production methods, pricing, promotion, and location from an operational and environmental perspective.
This document provides an introduction to business economics. It defines business economics as the integration of economic theory with business practice to facilitate decision making. The key points covered include:
- Business economics applies economic theory and methodology to solve business problems and make optimal decisions.
- It is microeconomic in nature and focuses on firms. It is normative, pragmatic, and prescriptive to help management make correct decisions and plan for the future.
- The scope of business economics includes demand analysis, cost analysis, production, pricing, profit and capital management.
- A business economist studies macroeconomic factors and links them to firms, assists in planning, performs cost-benefit analyses, and conducts research and statistical analysis
- The document discusses the syllabus for a managerial economics course with 5 units covering topics like general foundations, market structures, economic decision making, national income models, and macroeconomic policies.
- Unit 1 introduces economic approaches and the circular flow of economic activity. It also covers firm objectives, demand analysis, production functions, and cost concepts.
- Other units discuss product and input markets under different structures, capital budgeting techniques, indicators of national income, and the interrelationships between fiscal and monetary policies.
The document discusses the business cycle and how it affects the overall economy. It explains that the business cycle consists of four phases - expansion, peak, contraction, and trough. During expansion, the economy grows as GDP increases, unemployment decreases, businesses hire more people and make profits. At the peak, growth stops and the economy enters a contraction phase, where businesses cut back and lay people off, unemployment rises, and GDP declines. The cycle bottoms out at the trough, then expansion begins again. Key factors like business investment, interest rates, consumer expectations, and external events influence the phases of the cycle. Understanding where the economy is in the cycle can help individuals and businesses make important financial decisions.
This document provides an overview of microeconomics concepts including:
1. Economics is defined as the study of how scarce resources are allocated among alternative uses.
2. Key concepts in microeconomics include rational choice, incentives, marginal analysis, and opportunity cost.
3. Economic systems must answer questions about what to produce, how to produce it, and who receives it given the constraints of scarce resources.
Managerial economics applies economic theories and tools of analysis to help managers make informed business decisions. It involves using concepts like demand analysis, production planning, cost analysis, and pricing to optimize profits. The managerial economist is responsible for forecasting demand, minimizing risks and uncertainties, and advising management on issues like capital investment, pricing, and production planning to maximize business gains. Managerial economics bridges the gap between economic theory and business management practice. It draws from other disciplines like statistics and uses economic models and analysis to solve practical business problems.
Business economics deals with the application of economic theories and principles to solve business problems and aid management decision making. It involves using economic methodology to analyze issues like demand forecasting, cost analysis, profit analysis, and capital management at the level of individual firms. The study of business economics has both theoretical and practical significance. It helps understand economic behavior, assess economic performance, aid in economic planning and policymaking, and solve problems faced by various groups like businessmen, bankers, and policymakers. Overall, business economics integrates economic theory with business practice to facilitate optimal business decision making and planning.
This document discusses plant and intangible assets. It defines major categories of plant assets such as land, buildings, equipment, and natural resources. It also defines intangible assets such as patents, copyrights, trademarks, franchises and goodwill. The document outlines the accounting treatment for acquisition, depreciation/depletion, impairment, disposal and revaluation of plant and intangible assets over their useful lives.
This document defines economics and business economics. Economics is the study of how individuals and groups make choices about resources and their use. It has two major types - microeconomics which examines individual decision making and macroeconomics which looks at overall economies. Business economics applies economic theory to business decision making. It helps businesses analyze demand, costs, pricing, profits, and capital investments. The goal of business economics is to establish rules to help businesses maximize efficiency and profits.
This document defines managerial economics and its relationship to microeconomics. It discusses how managerial economics helps managers make important decisions regarding the allocation of scarce resources to maximize profits. It provides examples of how economic changes can affect a company's ability to earn an acceptable return. It also compares the basic economic questions faced by countries and companies regarding what, how, and for whom to produce goods and services.
This document provides an overview of microeconomics. It defines economics as the study of how societies allocate scarce resources to produce and distribute goods and services. The document outlines different types of economic systems and explains that most modern economies are mixed, with roles for both markets and governments. It also summarizes key microeconomic concepts like supply and demand, market equilibrium, and the role of prices in signaling resource allocation.
The Net Income (NI) approach proposes that a firm's value increases as it takes on more debt financing due to debt generally being a cheaper source of capital than equity. According to the NI approach, the costs of debt and equity remain constant regardless of capital structure, so the overall cost of capital declines as debt levels rise. However, the NI approach assumes unrealistic conditions like taxes being ignored and that more debt does not affect investor risk perceptions. It implies the maximum firm value occurs with 100% debt financing.
This document discusses agency problems that can arise in principal-agent relationships. Specifically:
- An agency problem occurs when the interests of the principal and agent conflict, as the agent may act in their own interest rather than the principal's.
- In finance, the two main agency relationships are between managers and stockholders, and managers and creditors.
- Agency costs are incurred to try to align the agent's actions with the principal's interests, including contracting, monitoring, and losses from unresolved problems. Monitoring and compensation schemes aim to resolve these conflicts.
Managerial economics applies economic concepts and tools to help managers make rational decisions and solve business problems efficiently. It borrows theories from microeconomics and tools from decision science. The goal is to find optimal solutions to business problems by integrating economic theory, quantitative techniques, and business practice. Managerial economics helps maximize firm effectiveness by facilitating resource allocation and policy formulation. It deals with topics like production, costs, pricing, demand, and market structure at the firm level.
Macroeconomics deals with the economy as a whole, examining aggregates like total income, output, employment and prices. It emerged as a separate field of study due to Keynes' analysis of the Great Depression when existing theories failed to explain high unemployment. The circular flow model illustrates how income and spending circulate between producers and consumers in an economy.
There are three main managerial theories described in the document:
1. Baumol's Model of Sales Revenue Maximization suggests that managers pursue sales maximization over profit maximization to boost their prestige, power, and job security.
2. Marris's Theory of Managerial Enterprise notes the separation of ownership and management allows managers to set goals that benefit themselves rather than owners, such as prioritizing growth over profits.
3. Williamson's Theory of Managerial Discretion discusses how managers have discretion over decisions and may not always act in the owners' best interests.
It includes important Definitions of economics and managerial economics. Also includes related topics like Micro and Macro Economics, objectives of a firm and various profit maximization models.
In mathematics and economics, transportation theory or transport theory is a name given to the study of optimal transportation and allocation of resources.A transportation matrix is a way of understanding the maximum possibilities the shipment can be done. It is also known as decision variables because these are the variables of interest that we will change to achieve the objective, that is, minimizing the cost function.
This document provides an introduction to managerial economics. It defines economics as the study of human economic activity and wealth. It discusses microeconomics as the study of individual consumers and firms, and macroeconomics as the study of aggregate economic activity in a country. Managerial economics bridges traditional economics theory and real business practices by providing tools to help managers make competent decisions. It operates within the constraints of macroeconomic conditions and suggests prescriptive actions to optimally solve problems given a firm's objectives. The scope of managerial economics includes decisions around product selection, production methods, pricing, promotion, and location from an operational and environmental perspective.
This document provides an introduction to business economics. It defines business economics as the integration of economic theory with business practice to facilitate decision making. The key points covered include:
- Business economics applies economic theory and methodology to solve business problems and make optimal decisions.
- It is microeconomic in nature and focuses on firms. It is normative, pragmatic, and prescriptive to help management make correct decisions and plan for the future.
- The scope of business economics includes demand analysis, cost analysis, production, pricing, profit and capital management.
- A business economist studies macroeconomic factors and links them to firms, assists in planning, performs cost-benefit analyses, and conducts research and statistical analysis
- The document discusses the syllabus for a managerial economics course with 5 units covering topics like general foundations, market structures, economic decision making, national income models, and macroeconomic policies.
- Unit 1 introduces economic approaches and the circular flow of economic activity. It also covers firm objectives, demand analysis, production functions, and cost concepts.
- Other units discuss product and input markets under different structures, capital budgeting techniques, indicators of national income, and the interrelationships between fiscal and monetary policies.
The document discusses the business cycle and how it affects the overall economy. It explains that the business cycle consists of four phases - expansion, peak, contraction, and trough. During expansion, the economy grows as GDP increases, unemployment decreases, businesses hire more people and make profits. At the peak, growth stops and the economy enters a contraction phase, where businesses cut back and lay people off, unemployment rises, and GDP declines. The cycle bottoms out at the trough, then expansion begins again. Key factors like business investment, interest rates, consumer expectations, and external events influence the phases of the cycle. Understanding where the economy is in the cycle can help individuals and businesses make important financial decisions.
This document provides an overview of microeconomics concepts including:
1. Economics is defined as the study of how scarce resources are allocated among alternative uses.
2. Key concepts in microeconomics include rational choice, incentives, marginal analysis, and opportunity cost.
3. Economic systems must answer questions about what to produce, how to produce it, and who receives it given the constraints of scarce resources.
Managerial economics applies economic theories and tools of analysis to help managers make informed business decisions. It involves using concepts like demand analysis, production planning, cost analysis, and pricing to optimize profits. The managerial economist is responsible for forecasting demand, minimizing risks and uncertainties, and advising management on issues like capital investment, pricing, and production planning to maximize business gains. Managerial economics bridges the gap between economic theory and business management practice. It draws from other disciplines like statistics and uses economic models and analysis to solve practical business problems.
Business economics deals with the application of economic theories and principles to solve business problems and aid management decision making. It involves using economic methodology to analyze issues like demand forecasting, cost analysis, profit analysis, and capital management at the level of individual firms. The study of business economics has both theoretical and practical significance. It helps understand economic behavior, assess economic performance, aid in economic planning and policymaking, and solve problems faced by various groups like businessmen, bankers, and policymakers. Overall, business economics integrates economic theory with business practice to facilitate optimal business decision making and planning.
This document discusses plant and intangible assets. It defines major categories of plant assets such as land, buildings, equipment, and natural resources. It also defines intangible assets such as patents, copyrights, trademarks, franchises and goodwill. The document outlines the accounting treatment for acquisition, depreciation/depletion, impairment, disposal and revaluation of plant and intangible assets over their useful lives.
This document defines economics and business economics. Economics is the study of how individuals and groups make choices about resources and their use. It has two major types - microeconomics which examines individual decision making and macroeconomics which looks at overall economies. Business economics applies economic theory to business decision making. It helps businesses analyze demand, costs, pricing, profits, and capital investments. The goal of business economics is to establish rules to help businesses maximize efficiency and profits.
This document defines managerial economics and its relationship to microeconomics. It discusses how managerial economics helps managers make important decisions regarding the allocation of scarce resources to maximize profits. It provides examples of how economic changes can affect a company's ability to earn an acceptable return. It also compares the basic economic questions faced by countries and companies regarding what, how, and for whom to produce goods and services.
This document provides an overview of business economics. It begins by defining economics and introducing some basic concepts. It then discusses the nature of business economics, noting that it is based on microeconomics but also incorporates elements of macroeconomic analysis. It is both a science and an art. The document outlines the scope of business economics, including demand analysis, production/cost analysis, inventory management, market structure/pricing, and more. It also discusses objectives, roles, related disciplines like micro/macroeconomics, economic systems, and applications of economics concepts.
This document provides an overview of managerial economics. It defines managerial economics as the application of economic theories, principles, and analytical tools to managerial decision-making. It discusses how managerial economics is related to but narrower in scope than economics. It also outlines how managerial economics integrates concepts from other disciplines like accounting, mathematics, statistics, operations research, and decision theory to help analyze problems and guide optimal business decisions.
BE Unit-1 Part-1 (Nature, Scope & Objectives).pdfAnjali244579
This document provides an overview of key topics in business economics, including:
1. The meaning and scope of business economics, including microeconomics and macroeconomics applications.
2. The objectives of business firms, moving from the traditional view of profit maximization to modern theories recognizing the separation of ownership and management. Objectives include utility maximization, revenue/sales maximization, and satisficing.
3. The time dimension of objectives, with short-run profit maximization differing from long-run goals of ensuring sustainability.
In under 3 sentences, this document introduces the core areas covered in business economics and discusses the evolution of theories around the objectives of business firms from a traditional profit maximization view
Managerial economics applies economic theory and quantitative methods to business administration problems. It bridges economic theory and business practice for facilitating managerial decision-making and planning. Managerial economics uses concepts from microeconomics and integrates economic theory with management principles. It helps managers make optimal decisions regarding production, pricing, inputs, profits, investments, and forecasting through tools like demand analysis, cost-benefit analysis, and quantitative modeling. Managerial economics draws from disciplines like accounting, finance, statistics, mathematics, and operations research.
1) Managerial economics refers to applying economic theory to managerial decision making in businesses. It informs decisions related to production, pricing, investment, and other areas.
2) Managerial economics draws on microeconomics but also considers macroeconomic factors. It makes normative and prescriptive recommendations to help managers optimize outcomes.
3) Key applications of managerial economics include demand analysis, pricing strategies, production and cost analysis, resource allocation, and investment analysis. These areas help managers maximize profits within the economic environment.
Managerial economics applies economic principles and theories to five types of resource decisions made by business organizations: product selection, production methods, pricing and quantity, promotion strategy, and location selection. The scope of managerial economics covers operational areas like demand forecasting, production cost analysis, and resource allocation. It also covers environmental areas like analyzing economic systems and trends in markets, industries, and government policies that affect business planning. The goal is to help managers maximize profit by making optimal operational and strategic decisions.
This document defines key concepts related to firms and market forces. It begins by defining a firm as an economic unit that produces goods and services for sale. The main goals or objectives of firms are then outlined as economic, social, human, national, organizational, and global objectives. Key concepts like profit maximization, wealth maximization, decision making, decision making under uncertainty, strategic vs tactical decisions, game theory, and linear programming are then defined.
This document provides an overview of the Business Economics course taught by Ms. Vimla Sharma. The course covers key topics in microeconomics and macroeconomics over 60 lectures. Specific topics discussed include the meaning and differences between economics, business economics, microeconomics, and macroeconomics. Concepts like opportunity cost, marginalism, incrementalism, and time value of money are also defined and explained. The document outlines the syllabus content and provides definitions and examples to illustrate important economic principles relevant to business.
Managerial economics applies economic theory and methodology to business decision-making. It helps managers identify economic choices and allocate scarce resources to achieve organizational goals. Some key topics covered in managerial economics include demand analysis, cost analysis, production and supply analysis, pricing decisions, profit management, and capital management. Quantitative tools and concepts from economics like elasticity, costs, and optimization are used to analyze business problems and guide managerial decisions.
Unit1.4_Introduction to BE_14.03.2022.pptxBLAKSHMIPATHI
This document provides an overview of business economics and managerial economics. It defines managerial economics as the integration of economics theory with business practice to facilitate decision-making. Managerial economics provides tools and techniques to analyze problems and make efficient decisions. It draws from areas like production, finance, and decision theory. Managerial economists analyze market conditions, forecast trends, and help businesses achieve objectives like profit maximization. They play an important role in gathering information, decision-making, and forward planning.
This document discusses the key concepts of managerial economics. It defines managerial economics as the application of economic theory and methodology to business decision-making. The goal of managerial economics is to help organizations reduce costs and maximize profits. It draws on concepts from microeconomics and uses techniques like statistics, mathematics, and operations research. Managerial economics analyzes factors like production, costs, prices, profits, and risks to find optimal solutions to business problems.
To introduce strategic design for an entrepreneurial venture
To discuss some of the reasons why entrepreneurs do not carry out strategic planning
To outline entrepreneurial strategy and some benefits of strategic planning
To examine the transition from an entrepreneurial style to a managerial approach
To discuss the five stages of a typical venture life cycle
To identify key management issues occurring during the growth stages
To introduce the steps useful for breaking through the growth wall
To identify the unique managerial concerns with a growth business
To elaborate the concept of entrepreneurial leadership
To outline ways to incorporate sustainability into business strategy
managerial economics presentation examination research ppt slideshareJackap NB
Managerial economics provides tools and concepts from economic theory to analyze business problems and guide managerial decision-making. It bridges the gap between economic theory and business practice by applying microeconomic principles and quantitative methods to operational and strategic issues faced by managers. Some key aspects covered include demand analysis, production and cost analysis, pricing policies, and capital budgeting. The goal is to help managers optimize organizational performance and decision-making under conditions of uncertainty.
Managerial economics provides tools and concepts from economic theory to analyze business problems and guide managerial decision-making. It bridges the gap between abstract economic theory and practical business operations. The key goals of managerial economics are to help managers make optimal operational and strategic decisions through analyzing factors like demand, costs, pricing, profits, and the external business environment.
This document provides an introduction to managerial economics. It discusses how economic principles and analysis can be applied to business problems to help managers make efficient resource allocation decisions. Specifically, it outlines how economics studies how societies address fundamental problems of what, how, and for whom to produce goods and services. It also discusses the objectives of business firms, including profit maximization, sales maximization, and satisficing theories of profit. The goal of managerial economics is to help managers understand factors like costs, demand, and competition to make optimal business decisions.
Managerial economics applies economic theory and techniques to managerial decision-making. It helps managers evaluate resource allocation, determine optimal product mix and output levels, set prices, and respond to economic conditions. The scope of managerial economics is narrower than traditional economics as it focuses on microeconomic problems faced by individual firms, including demand and cost analysis, pricing, profit maximization, and adapting plans to the business environment.
Relationship of Managerial Economics with other disciplines,Difference betwee...Pooja Kadiyan
This document provides an overview of key concepts in managerial economics. It discusses the relationship between managerial economics and other disciplines like economics, operational research, accountancy, mathematics, statistics, psychology, and management theory. Microeconomics studies individual actors in markets while macroeconomics looks at whole economies. The document outlines differences between micro and macroeconomics. Finally, it explores important economic concepts used in managerial decision making, including incremental concepts, time perspective, discounting, opportunity costs, equimarginal principle, contribution concept, and negotiation principle.
Managerial economics applies economic theory and quantitative methods to business administration to help managers make optimal decisions about allocating resources. It combines economics, statistics, and mathematics to model problems and facilitate decision-making. As a microeconomic and applied field, it examines how firms make production, pricing, and investment choices. The managerial economist supports management by analyzing internal operations and external factors, conducting research, and advising on issues like pricing, investment, production, and responding to economic trends. The goal is optimal resource use and business performance.
Madhya Pradesh, the "Heart of India," boasts a rich tapestry of culture and heritage, from ancient dynasties to modern developments. Explore its land records, historical landmarks, and vibrant traditions. From agricultural expanses to urban growth, Madhya Pradesh offers a unique blend of the ancient and modern.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
The Rise and Fall of Ponzi Schemes in America.pptxDiana Rose
Ponzi schemes, a notorious form of financial fraud, have plagued America’s investment landscape for decades. Named after Charles Ponzi, who orchestrated one of the most infamous schemes in the early 20th century, these fraudulent operations promise high returns with little or no risk, only to collapse and leave investors with significant losses. This article explores the nature of Ponzi schemes, notable cases in American history, their impact on victims, and measures to prevent falling prey to such scams.
Understanding Ponzi Schemes
A Ponzi scheme is an investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from legitimate profit earned. The scheme relies on a constant influx of new investments to continue paying the promised returns. Eventually, when the flow of new money slows down or stops, the scheme collapses, leaving the majority of investors with substantial financial losses.
Historical Context: Charles Ponzi and His Legacy
Charles Ponzi is the namesake of this deceptive practice. In the 1920s, Ponzi promised investors in Boston a 50% return within 45 days or 100% return in 90 days through arbitrage of international reply coupons. Initially, he paid returns as promised, not from profits, but from the investments of new participants. When his scheme unraveled, it resulted in losses exceeding $20 million (equivalent to about $270 million today).
Notable American Ponzi Schemes
1. Bernie Madoff: Perhaps the most notorious Ponzi scheme in recent history, Bernie Madoff’s fraud involved $65 billion. Madoff, a well-respected figure in the financial industry, promised steady, high returns through a secretive investment strategy. His scheme lasted for decades before collapsing in 2008, devastating thousands of investors, including individuals, charities, and institutional clients.
2. Allen Stanford: Through his company, Stanford Financial Group, Allen Stanford orchestrated a $7 billion Ponzi scheme, luring investors with fraudulent certificates of deposit issued by his offshore bank. Stanford promised high returns and lavish lifestyle benefits to his investors, which ultimately led to a 110-year prison sentence for the financier in 2012.
3. Tom Petters: In a scheme that lasted more than a decade, Tom Petters ran a $3.65 billion Ponzi scheme, using his company, Petters Group Worldwide. He claimed to buy and sell consumer electronics, but in reality, he used new investments to pay off old debts and fund his extravagant lifestyle. Petters was convicted in 2009 and sentenced to 50 years in prison.
4. Eric Dalius and Saivian: Eric Dalius, a prominent figure behind Saivian, a cashback program promising high returns, is under scrutiny for allegedly orchestrating a Ponzi scheme. Saivian enticed investors with promises of up to 20% cash back on everyday purchases. However, investigations suggest that the returns were paid using new investments rather than legitimate profits. The collapse of Saivian l
An accounting information system (AIS) refers to tools and systems designed for the collection and display of accounting information so accountants and executives can make informed decisions.
Confirmation of Payee (CoP) is a vital security measure adopted by financial institutions and payment service providers. Its core purpose is to confirm that the recipient’s name matches the information provided by the sender during a banking transaction, ensuring that funds are transferred to the correct payment account.
Confirmation of Payee was built to tackle the increasing numbers of APP Fraud and in the landscape of UK banking, the spectre of APP fraud looms large. In 2022, over £1.2 billion was stolen by fraudsters through authorised and unauthorised fraud, equivalent to more than £2,300 every minute. This statistic emphasises the urgent need for robust security measures like CoP. While over £1.2 billion was stolen through fraud in 2022, there was an eight per cent reduction compared to 2021 which highlights the positive outcomes obtained from the implementation of Confirmation of Payee. The number of fraud cases across the UK also decreased by four per cent to nearly three million cases during the same period; latest statistics from UK Finance.
In essence, Confirmation of Payee plays a pivotal role in digital banking, guaranteeing the flawless execution of banking transactions. It stands as a guardian against fraud and misallocation, demonstrating the commitment of financial institutions to safeguard their clients’ assets. The next time you engage in a banking transaction, remember the invaluable role of CoP in ensuring the security of your financial interests.
For more details, you can visit https://technoxander.com.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Discover the Future of Dogecoin with Our Comprehensive Guidance36 Crypto
Learn in-depth about Dogecoin's trajectory and stay informed with 36crypto's essential and up-to-date information about the crypto space.
Our presentation delves into Dogecoin's potential future, exploring whether it's destined to skyrocket to the moon or face a downward spiral. In addition, it highlights invaluable insights. Don't miss out on this opportunity to enhance your crypto understanding!
https://36crypto.com/the-future-of-dogecoin-how-high-can-this-cryptocurrency-reach/
3. CONTENTS:
• ECONOMICS
• DISTINCTION BETWEEN ECONOMICS AND MANEGERIAL
ECONOMICS
• WHO IS AN ECONOMIST?
• WHO IS A BUSINESS ECONOMIST?
• ROLES AND RESPONSIBILITIES
• DECISION MAKING
• FORWARD PLANNING
• CONCLUSION
4. ECONOMICS
• The discipline of economics, as we understand it today,
emerged in the 17th and 18th centuries as the western world
began its transformation from an agrarian to an industrial
society.
• Despite the enormous differences between then and now, the
economic problems with which society struggles remain the
same:
• How do we decide what to produce with limited resources?
• How do we ensure stable prices and full employment of resources?
• How do we provide a rising standard of living today and in the future?
5. Economics is the study of the production, distribution, and consumption of
goods and services - indicates that economics includes any business,
nonprofit organization, or administrative unit.
A second definition is Economics is the science of making decisions in the
presence of scarce resources
It is at the core of what managers of the organizations do referred as
“managerial economics,” which is a subfield of economics that
places special emphasis on the choice aspect .
ECONOMICS
6. ECONOMICS MANAGERIAL ECONOMICS
Comprehensive & wider scope Narrow & limited scope
Both Macro & Micro Micro in nature & Macro in analysis
Both positive & normative science Mainly Normative
Formulation of theories and principles Application of theories & principles
Discuss general problems Discuss individual problems
- behavior of a firm.
- optimal utilization of resources.
7.
8.
9. ECONOMICS MANAGERIAL ECONOMICS
Comprehensive & wider scope Narrow & limited scope
Both Macro & Micro Micro in nature & Macro in analysis
Both positive & normative science Mainly Normative
Formulation of theories and principles Application of theories & principles
Discuss general problems Discuss individual problems
- behavior of a firm.
- optimal utilization of resources.
10. TYPE OF ANALYSIS
Positive vs. Normative analysis
• Positive statements
• Attempt to describe the world as it is
• Descriptive
• Confirm or refute by examining evidence
• Normative statements
• Attempt to prescribe how the world should be
• Prescriptive
10
11. Decision Problem
Managerial Economics
Traditional
Economics
Decision Sciences
(Tools and
techniques of analysis)
Optimal Solution to Business Solution
“Managerial Economics is economics applied in decision making. It is a special
branch of economics bridging the gap between abstract theory and managerial
practice.” – Haynes, Mote and Paul.
12. The Economist as a Scientist
• Economics = science –
conceptual
• Economists = scientists –
practice / personal level.
• Devise theories
• Collect data
• Analyze these data
• Verify or refute their theories
13. WHO IS BUSINESS ECONOMIST ?
Business Economist is the practitioner of the science of
managerial economics.
Companies employ business economists to guide them in
making appropriate economic decisions – present and future
(forecasting – short & long run)
They astutely scan the competitive environment in which a firm
functions and suggest suitable policies for solution of problems.
14. TYPES OF ECONOMISTS
• Business Economic Advisers:
They do research, collect information and evaluate the business
economic aspects that influence the growth and development of
the organization. directly answerable to the top management and
act in an advisory capacity
• Business economists as full-time professional managers:
Often appointed as financial managers, marketing managers,
production managers and general managers.
15. Academic economists:
Business economists at universities - involved in the activities
such as applied business economic research, continuous literary
study, advise / liaison with business economists in practice,
attending seminars and conferences, presenting short courses
and lectures and training students in Business Management.
Techno-economists:
They are particularly research-orientated. Apart from formal
training in Business Management, they also have a qualification
in a technical or scientific field
16. RESPONSIBILITIES OF BUSINESS
ECONOMISTS
To bring reasonable profit to the company.
To study external and internal factors influencing the business
To make accurate forecast.
To establish and maintain contact with individual and data sources.
To keep the management informed of all the possible economic
trends.
To participate in public debates
To earn full status in the business team.
Assisting the management towards facilitating effective decision
making and forward planning.
17.
18. IMPORTANT AREAS OF DECISION
MAKING - INTERNAL
• Selection of product.
• Selection of suitable
product mix.
• Selection of method of
production.
• Product line decision.
• Determination of price and
quantity.
• Decision on promotional
strategy.
• Optimum input combination.
• Allocation of resources
19. INTERNAL
Replacement decision.
Make or buy decision.
Shut down decision.
Decision on export and import.
Location decision.
Capital budgeting.
20. IMPORTANT AREAS OF DECISION
MAKING - External
The
Organisation
Technology
Economic
Legal Media
Demographic
Climatic
Market
Political
21. DECISION MAKING PROCESS:
ESTABLISHING OBJECTIVES
DEFINING THE PROBLEM
IDENTIFYING POSSIBLE ALTERNATIVE SOLUTIONS
EVALUATING ALTERNATIVE COURSES OF ACTION
SELECTION OF THE BEST ALTERNATIVE
IMPLEMENTING AND MONITORING THE DECISION
22. ESTABLISHING OBJECTIVES:
• First step in decision making process
• The objective of the Decision Making must be in sync with the
overall objective of the company
• The most important objective of a business is to maximise
profits
23. DECISION MAKING PROCESS:
ESTABLISHING OBJECTIVES
DEFINING THE PROBLEM
IDENTIFYING POSSIBLE ALTERNATIVE SOLUTIONS
EVALUATING ALTERNATIVE COURSES OF ACTION
SELECTION OF THE BEST ALTERNATIVE
IMPLEMENTING AND MONITORING THE DECISION
24. DEFINING A PROBLEM
In this step, the problem is thoroughly analysed. There are a couple
of questions one should ask when it comes to identifying the
purpose of the decision
• What exactly is the problem? For e.g. decreasing profits
• Why the problem should be solved?
• Who are the affected parties of the problem?
• Does the problem have a deadline or a specific time-line?
25. DECISION MAKING PROCESS:
ESTABLISHING OBJECTIVES
DEFINING THE PROBLEM
IDENTIFYING POSSIBLE ALTERNATIVE SOLUTIONS
EVALUATING ALTERNATIVE COURSES OF ACTION
SELECTION OF THE BEST ALTERNATIVE
IMPLEMENTING AND MONITORING THE DECISION
26. IDENTIFYING THE POSSSIBLE
ALTERNATIVE SOLUTIONS
• Requires considering of variables that have impact on the
problem
• Alternative courses of actions are identified to solve the problem
• For e.g.
Problem: Declining profits
Updating and replacing Building entirely new
old machinery plant
27. DECISION MAKING PROCESS:
ESTABLISHING OBJECTIVES
DEFINING THE PROBLEM
IDENTIFYING POSSIBLE ALTERNATIVE SOLUTIONS
EVALUATING ALTERNATIVE COURSES OF ACTION
SELECTION OF THE BEST ALTERNATIVE
IMPLEMENTING AND MONITORING THE DECISION
28. EVALUATING THE ALTERNATIVE
COURSES OF ACTION
• It requires collection and analysis of data
• The collected data can be analysed using
basic principles of economics and
quantitative techniques
• Methods of data collection
29. METHODS OF DATA COLLECTION
Census:
A census is a study that obtains data from every member of a
population. In most studies, a census is not practical, because of
the cost and/or time required.
Sample survey:
A sample survey is a study that obtains data from a subset of a
population, in order to estimate population attributes.
30. Experiment:
An experiment is a controlled study in which the researcher attempts
to understand cause-and-effect relationships. The study is "controlled"
in the sense that the researcher controls
(1) How subjects are assigned to groups and
(2) Which treatments each group receives?
Observational study:
Like experiments, observational studies attempt to understand cause-
and-effect relationships. However, unlike experiments, the researcher
is not able to control
(1) how subjects are assigned to groups and/or
(2) which treatments each group receives.
31. BASIC PRINCIPLES OF
MANEGERIAL ECONOMICS
Marginalism Principle
Incremental Principle
Equi-Marginalism Principle
Time Perspective Principle
Discounting Principle
Opportunity Cost Principle
32. INCREMENTAL PRINCIPLE
The two major concepts in this principle are incremental cost and incremental revenue.
Incremental cost denotes change in total cost, whereas incremental revenue means change
in total revenue resulting from a decision of the firm.
The incremental principle may be stated as follows:
A decision is clearly a profitable one if
(i) It increases revenue more than costs.
(ii) It decreases some cost to a greater extent than it increases others.
(iii) It increases some revenues more than it decreases others.
(iv) It reduces costs more than revenues.
33. TIME PERSPECTIVE PRINCIPLE
• The time perspective concept states that the decision maker
must give due consideration both to the short run and long run
effects of his decisions. He must give due emphasis to the
various time periods.
• Managerial economists are also concerned with the short run
and long run effects of decisions on revenues as well as costs.
The main problem in decision making is to establish the right
balance between long run and short run.
34. OPPORTUNITY COST PRINCIPLE
• Choice involves sacrifices
• Opportunity cost refers to the value forgone by pursuing one
course of action rather than another.
• For the production of one commodity, we have to forego the
production of another commodity in case of scarce resources.
• For e.g. Jill decides to drive to work instead of taking the bus. It
takes her 90 minutes to get there and the bus ride would have
been 40, so her opportunity cost is 50 minutes.
35. DISCOUNTING PRINCIPLE
• Since future is unknown and incalculable, there is lot of risk and
uncertainty in future. Everyone knows that a rupee today is
worth more than a rupee will be two years from now.
• The mathematical technique for adjusting for the time value of
money and computing present value is called ‘discounting’.
• 𝑃𝑉 =
𝐹𝑉
(1+𝑖) 𝑛
where PV = Present Value
FV = Future Value
𝑖 = Rate of interest
𝑛 = no. of years
The concept of discounting is found
most useful in managerial
economics in decision problems
pertaining to investment planning or
capital budgeting.
36. MARGINALISM PRINCIPLE
• Marginal Cost:
Cost incurred to produce an extra unit of output.
• Marginal Revenue:
Revenue generated by selling an extra unit of output.
MC = TCn – TC(n-1)
MR = TRn – TR(n-1)
Decision rule for profit maximisation: MR = MC
37. EQUI MARGINALISM PRINCIPLE
• One of the widest known principles of economics is the equi-
marginal principle. The principle states that an input should be
allocated so that value added by the last unit is the same in all
cases.
• MPA = MPB = MPC = MPD =MPE
39. DECISION MAKING PROCESS:
ESTABLISHING OBJECTIVES
DEFINING THE PROBLEM
IDENTIFYING POSSIBLE ALTERNATIVE SOLUTIONS
EVALUATING ALTERNATIVE COURSES OF ACTION
SELECTION OF THE BEST ALTERNATIVE
IMPLEMENTING AND MONITORING THE DECISION
40. SELECTING THE BEST
ALTERNATIVE
• After analysing the data and information using various
techniques the optimum solution will be selected
• The optimum solution will be one that helps to achieve the
established objectives
• Alternatives are evaluated using various quantitative techniques
and based on the principles of managerial economics
41. DECISION MAKING PROCESS:
ESTABLISHING OBJECTIVES
DEFINING THE PROBLEM
IDENTIFYING POSSIBLE ALTERNATIVE SOLUTIONS
EVALUATING ALTERNATIVE COURSES OF ACTION
SELECTION OF THE BEST ALTERNATIVE
IMPLEMENTING AND MONITORING THE DECISION
42. IMPLEMENTING THE DECISION
• Implementation of the decision requires constant monitoring so
that the expected results are obtained from the optimal course
of action
• If at all the expected results are not forth coming corrective
measures should be taken.
44. DEMAND FORECASTING
• Process of finding out likely demand for a firm’s
product at various prices over a stipulated time period
• Also known as Business Forecasting
45. TYPES OF FORECASTING
• Short term- period of 1 year
• Long term- production for a year or more
47. Conclusion
To sum up-
• Economics is the science of making decisions in the presence
of scarce resources
• Understood the basic distinction between Economics and
Managerial Economics
• We understood who is a Business Economist
• Roles of a Business Economist
• How a managerial economist helps in decision making and
future planning.