21 Oct 2021
School
Department
Course
Professor
Document Summary
The term economics has been derived from the ancient greek word oikonomia which means household". Definition of economics: wealth definition, welfare definition, scarcity definition and, growth definition. Managerial economics bridges the gap between traditional economic theory and real business practices in two ways. Spencer and siegleman defined managerial economics as the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning of management . Objectives and uses (importance) of managerial economics: it providestool and techniquesformanagerial decision making. It gives answersto the basic problems of business management: it supplies data for analysis and forecasting. It provides tools for demand forecasting and profitplanning. It guides the managerial economist: it helps in formulating business policies. It assiststhe management to know internal and external factorsinfluence the business. The scope covers two areas of decision making (a) operational or internal issues and (b) environmental or external issues. The important questions to be answered by the managerial economists include:
