...Distinguish between microeconomics and macroeconomics. Explain various types of economic choices and to appreciate the concept of opportunity cost. Understand the marginal concepts and how they relate to rational choices. Construct, interpret a production possibility curve and understand its significance within the micro and macro perspectives. Describe economic efficiency. Understand the importance of ceteris paribus assumption. Distinguish between positive and normative statements. TUTORIAL EXERCISES. Question 1 In a paper written by Bentley College economists Patricia M. Flynn and Michael A. Quinn, the authors state: We find evidence that Economics is a good choice of major for those aspiring to become a CEO. When adjusting for size of the pool of graduates, those with undergraduate degrees in Economics are shown to have had a greater likelihood of becoming an S&P 500 CEO than any other major. A list of famous economics majors published by Marietta College includes business leaders Warren Buffet, Donald Trump and Diane von Furstenberg. Why might studying economics be particularly good preparation for being the top manager of a corporation or a leader in government? Question 2 In a mixed economy, does the government decide what goods and services should be produced? Briefly discuss the reasons for your answer. 1|Page Question 3 Explain which of the following statements...
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...Unit 1 Concepts of Managerial Economics Learning Outcome After going through this unit, you will be able to: • • • • Explain succinctly the meaning and definition of managerial economics Elucidate on the characteristics and scope of managerial economics Describe the techniques of managerial economics Explain the application of managerial economics in various aspects of decision making • Explicate the application of managerial economics in marginal analysis and optimisation Time Required to Complete the unit 1. 2. 1st Reading: It will need 3 Hrs for reading a unit 2nd Reading with understanding: It will need 4 Hrs for reading and understanding a unit 3. 4. 5. Self Assessment: It will need 3 Hrs for reading and understanding a unit Assignment: It will need 2 Hrs for completing an assignment Revision and Further Reading: It is a continuous process Content Map 1.1 1.2 Introduction Concept of Managerial Economics 1.2.1 Meaning of Managerial Economics 1.2.2 Definitions of Managerial Economics Managerial Economics 1 1.2.3 Characteristics of Managerial Economics 1.2.4 Scope of Managerial Economics 1.2.5 Why Managers Need to Know Economics? 1.3 1.4 Techniques of Managerial Economics Managerial Economics - Its application in Marginal Analysis and Optimisation 1.4.1 1.4.2 1.5 1.6 1.7 Application of Managerial Economics Tools of Decision Science and Managerial Economics Summary Self Assessment Test Further Reading 2 Managerial Economics 1.1 Introduction ...
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...Question 1. How does the theory of the firm provide an integrated framework for the analysis of managerial decision making across the functional areas of business? Discuss. Answer. Contribution of theories of the firm to the concept of the business model The advantage of the Chesbrough and Rosenbloom approach to the business model concept is that its functions or components provide a comprehensive structure by which to analyse different sources of value in firms. Compared for instance with Amit and Zott’s (2001) approach its functions or components are generic, rather than specific sources of value for a particular type of business. However the Chesbrough and Rosenbloom business model is still more of a framework than a theory (Teece 2006). By itself is does not enable predictions to be made of the behaviour of firms, although it has attempted to identify the key factors that may make such predictions possible. At the same time there are theoretical underpinnings that could be incorporated into many of the components of the business model to increase its capacity to be used as a predictive model. As with Amit and Zott’s (2001) development of the business model, this analysis suggests that there is no single applicable theoretical framework, but that an integration of the various theoretical frameworks is useful in examining the value creation potential of the firm’s business model. The approach adopted here is to enrich the concept of the business model with the various...
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...benefits and costs of each action and choose an action only if the benefits outweigh the costs. Although people act from a variety of motives, ample evidence indicates that they respond to economic incentives. Economists use the word marginal to mean extra or additional. The optimal decision is to continue any activity up to the point where the marginal benefit equals the marginal cost. 1.2 The Economic Problem That Every Society Must Solve (pages 8–11) Discuss how an economy answers these questions: What goods and services will be produced? How will the goods and services be produced? Who will receive the goods and services produced? Society faces trade-offs: Producing more of one good or service means producing less of another good or service. The opportunity cost of any activity—such as producing a good or service—is the highest-valued alternative that must be given up to engage in that activity. The choices of consumers, firms, and governments determine what goods and services will be produced. Firms choose how to produce the goods and services they sell. In the United...
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...MIcroeconomics: Markets, Methods & Models Douglas Curtis and Ian Irvine | Version 2014/2015 $ ADAPTED OPEN TEXT FORMATIVE ONLINE ASSESSMENT COURSE SUPPLEMENTS COURSE LOGISTICS & SUPPORT a d v a n c i n g l e a r n i n g www.lyryx.com Copyright This work is licensed under a Creative Commons AttributionNonCommercial-NoDerivs 3.0 Unported License. http://creativecommons.org/licenses/by-nc-nd/3.0/deed.en_GB Douglas Curtis and Ian Irvine Edition 1.11 This edition is differentiated from the first edition solely by minor editorial adjustments. Content has not been altered. Microeconomics: Markets, Methods and Models About the Authors Doug Curtis is a specialist in macroeconomics. He is the author of twenty research papers on fiscal policy, monetary policy, and economic growth and structural change. He has also prepared research reports for Canadian industry and government agencies and authored numerous working papers. He completed his PhD at McGill University, and has held visiting appointments at the University of Cambridge and the University of York in the United Kingdom. His current research interests are monetary and fiscal policy rules, and the relationship between economic growth and structural change. He is Professor Emeritus of Economics at Trent University in Peterborough, Ontario, and Sessional Adjunct Professor at Queen’s University in Kingston, Ontario Ian Irvine is a specialist in microeconomics, public economics, economic inequality...
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...Untouchability is a sin· Untouchability is a crime Untouchability is inhuman ·TAMILNADU TEXTBOOK AND EDUCATIONAL SERVICES CORPORATION College Road, Chennai- 600 006. ii CONTENTS Page No 1 Nature and Scope ofEconomics 2 Basic Economic Problems 33 3 Theory of Consumer Behaviour 47 4 Demand and Supply 77 5 Equilibrium Price 103 6 Production 117 7 Cost and Revenue 143 8 Market Structure and Pricing 161 9 Marginal Productivity Theory of Distribution 183 10 Simple Theory oflncome Determination 205 11 229 Monetary Policy 12 Fiscal Policy 247 iii Chapter 1 Nature and Scope of Economics Introduction Economics is a social science which deals with human wants and their satisfaction. It is mainly concerned with the way in which a society chooses to employ its scarce resources which have alternative uses, for the production of goods for present and future consumption. Political economy is another name for economics. “Polis” in Greek means a State. The early writers used the term “Political Economy” for the management of the State. A person who runs a family is expected to make the best use of the income of the household. Similarly, the State is expected to get the maximum benefit for the society. Hence the term “Political Economy”. The existence of human wants is the starting point of all economic activity in the world. Unless we make efforts, we cannot satisfy wants...
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...mic AS ECONOMICS STUDY GUIDE UNIT ONE Markets: How They Work & Why They Fail For Edexcel Syllabus: updated 2010 CONTENTS Page Reading list 3 Syllabus 4 SECTION A – HOW THEY WORK 1. The Basic Economic Problem 8 2. Specialisation and the Division of Labour 10 3. Production Possibility Frontiers 12 4. Types of Economy 15 5. Positive & Normative Statements 18 6. Theory of Demand 19 7. Theory of Supply 21 8. Equilibrium/Market Clearing Price & Price Mechanism 23 9. Consumer and Producer Surplus 26 10. Price Elasticity of Demand 28 11. Price Elasticity of Demand and Revenue 30 12. Price Elasticity of Demand along Demand Curve 31 13. Cross Elasticity of Demand 32 14. Income Elasticity of Demand 33 15. Price Elasticity of Supply 34 16. Elasticity Summary 35 17. Indirect Taxes and Subsidies 38 18. Labour Markets 41 SECTION B – MARKET FAILURE 19. Market Failure 45 20. Externalities 46 21. Externalities Diagrams 47 22. Merit and Demerit Goods 49 23. Missing Market: Public Goods 51 24. Imperfect Market Information 53 25. Government Intervention to Correct Market Failure 55 26. Factor Immobility: Labour Market 60 27. Unstable Commodity...
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... for SCHOOL OF DISTANCE EDUCATION Bharathiar University Coimbatore-641046 CONTENTS Page No. UNIT-I Lesson 1 Lesson 2 Lesson 3 Lesson 4 Lesson 5 Lesson 6 Lesson 7 Managerial Economics: Definition, Nature, Scope Fundamental Concepts of Managerial Economics Demand Analysis Elasticity of Demand UNIT-II Supply Analysis Production Function Theory of Cost...
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...Contents 1. Introduction to Economics 1 What is Economics? 2 Studying of Choice in a World of Scarcity 4 The Cost-Benefit Principles 6 Absolute Advantage vs. Comparative Advantage 9 2. Law of Demand and Supply 13 Introduction to Demand and Supply 14 The Demand Curve 15 The Supply Curve 18 Market Equilibrium 21 Shift in Demand 25 Shift in Supply 26 3. Elasticity of Demand and Supply 29 Price Elasticity of Demand 30 Types of Elasticity of Demand 31 Determinants of Price Elasticity of Demand 34 Price Elasticity of Supply 38 Types of Elasticity of Supply 39 Determinants of Price Elasticity of Supply 41 4. International Trade 44 Introduction to International Trade 45 International Trade Restrictions 48 Arguments in Favour of Restricting Trade 53 Non-economic Arguments for Restricting Trade 56 Problems with Trade Protection 58 5. Market Structures 62 Introduction to Market Structure 63 Perfect Competition 65 Monopoly 68 Monopolistic Competition 72 6. Macroeconomics – GDP, Unemployment, Money and Central Bank 77 Introduction to Macroeconomics 78 GDP 81 Unemployment 84 Inflation 89 [pic] |Principles of Economics | |BM2 | A WORD OF WELCOME ...
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... Microeconomics Seventh Edition by Pindyck / Rubinfeld Pearson Education © 2009 8/12/2008 Contents Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Preliminaries ........................................................................................................................1 The Basics of Supply and Demand..................................................................................16 Consumer Behavior...........................................................................................................55 Individual and Market Demand...................................................................................125 Uncertainty and Consumer Behavior ...........................................................................179 Production ........................................................................................................................236 The Cost of Production ...................................................................................................273 Profit Maximization and Competitive Supply ............................................................327 The Analysis of Competitive Markets ..........................................................................375 Chapter 10 Market Power: Monopoly and Monopsony.................................................................438 Chapter 11 Pricing with Market Power .............................
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...things for their own consumption. For example, people could grow vegetables in their garden or allotment; they could do their own painting and decorating. Alternatively people could engage in barter: they could produce things and then swap them for goods that other people had produced. ( Before reading on, how would you define scarcity? Must goods be at least temporarily unattainable to be scarce? See page 2 of text for a definition of scarcity. Goods need not be unattainable to be scarce. Because people’s incomes are limited, they cannot have everything they want from shops, even though the shops are stocked full. If all items in shops were free, the shelves would soon be emptied! ( If we would all like more money, why does the government not print a lot more? Could it not thereby solve the problem of scarcity ‘at a stroke’? The problem of scarcity is one of a lack of production. Simply printing more money without producing more goods and services will merely lead to inflation. To the extent that firms cannot meet the extra demand (i.e. the extra consumer expenditure) by extra production, they will respond by putting up their prices. Without extra production, consumers will end up unable to buy any more than previously. 5 ( (Box 1.1) What is it that makes each one of the above news items an economics item? Each one of the items has something to do with production, consumption or exchange, and/or the money incomes and expenditures...
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...meaning of oppor tunity cost See how to use marginal reasoning when making decisions TEN OF PRINCIPLES ECONOMICS Discuss how incentives af fect people’s behavior The word economy comes from the Greek word for “one who manages a household.” At first, this origin might seem peculiar. But, in fact, households and economies have much in common. A household faces many decisions. It must decide which members of the household do which tasks and what each member gets in return: Who cooks dinner? Who does the laundry? Who gets the extra dessert at dinner? Who gets to choose what TV show to watch? In short, the household must allocate its scarce resources among its various members, taking into account each member’s abilities, efforts, and desires. Like a household, a society faces many decisions. A society must decide what jobs will be done and who will do them. It needs some people to grow food, other people to make clothing, and still others to design computer software. Once society has allocated people (as well as land, buildings, and machines) to various jobs, 3 Consider why trade among people or nations can be good for everyone Discuss why markets are a good, but not per fect, way to allocate resources Learn what determines some trends in the overall economy 1 TLFeBOOK 2 4 Ten Principles of Economics PA R T O N E INTRODUCTION scarcity the limited nature of society’s resources economics the study of how society manages its scarce resources ...
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...BACHELOR OF COMMERCE (B.COM.,) PAPER – 2.1 MANAGERIAL ECONOMICS UNIT – I CHAPTER - I SECTION - I Definition of Managerial Economics Managerial economics refers to those aspects of economics and its tools of analysis most relevant to the firm’s decision-making process. According to MeNair and Meriam, managerial economies consists of the use of economic models of thought to analyze business situations. Some writers consider managerial economics as the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management. The underlying idea of all these definitions is that managerial economics means economics applied in decision-making. So we may consider managerial economics as a special branch of economics bridging the gap between abstract theory and managerial practice. It may be pointed out here that effective decision-making at the firms’ level calls for a careful analysis of a choice between alternative courses of action. Economic theory offers a variety of concepts and analytical tools which can be of considerable assistance to the manager in his decision-making process. In fact actual problem-solving may require many skills and tools which are not available in the traditional economist’s. For example, knowledge of accounting and of statistical concepts and methods, which are not taught in economics, can help the analyses to apply more effectively the economic...
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..."application of the economic concepts and economic analysis to the problems of formulating rational managerial decisions".[1]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. As such, it bridges economic theory and economics in practice.[2] It draws heavily from quantitative techniques such as regression analysis, correlation and calculus.[3] If there is a unifying theme that runs through most of managerial economics, it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example through the use of operations research, mathematical programming, game theory for strategic decisions,[4] and other computational methods.[5] Managerial decision areas include: • assessment of investible funds • selecting business area • choice of product • determining optimum output • determining price of product • determining input-combination and...
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...Transactions and Strategies Economics for Management This page intentionally left blank Transactions and Strategies Economics for Management ROBERT J. MICHAELS Mihaylo College of Business and Economics California State University, Fullerton Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Transactions and Strategies: Economics for Management Robert J. Michaels Vice President of Editorial, Business: Jack W. Calhoun Publisher: Joe Sabatino Sr. Acquisitions Editor: Steve Scoble Supervising Developmental Editor: Jennifer Thomas Editorial Assistant: Lena Mortis Sr. Marketing Manager: John Carey Marketing Coordinator: Suellen Ruttkay Marketing Specialist: Betty Jung Content Project Manager: Cliff Kallemeyn Media Editor: Deepak Kumar Sr. Art Director: Michelle Kunkler Frontlist Buyer, Manufacturing: Sandee Milewski Internal Designer: Juli Cook/ Plan-It-Publishing, Inc. Cover Designer: Rose Alcorn Cover Image: © Justin Guariglia/Corbis © 2011 South-Western, Cengage Learning ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means— graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution, information storage and retrieval systems, or in any other manner—except as may be permitted by the license terms herein. For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support...
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