Managerial Economics

Output No. 1

With regard to a hospital, a state university, and a museum, define (a) a possible primary aim, or goal, of each, (b) some of the constraints under which they operate, and (c) the relationship of (a) and (b) to the study of managerial economics.
|Name of Firm |Primary Goals |Possible Constraints |
| | | |
|San Pedro Hospital |We, the San Pedro Hospital community of health workers commit|Financial constraints |
| |to: |Hospital building capacity |
| |Provide the best quality and compassionate health care |Availability of hospital devices to |
| |services in satisfying all individuals with respect and |perform various tests. |
| |reverence of their person; |Availability of medicine for diagnosed |
| |Deliver quality satisfying services expected of a training |illnesses |
| |health care institution; and |Availability of doctors and medical |
| |Witness as a community the mercy and compassion of a loving |specialist |
| |God in the performance of individual and communal | |
| |responsibility. | |
| | | |
|Davao del Norte State College |As a premiere Regional Center, the DNSC shall: |Limited budget allocation from the |
| |Vigorously pursue quality and relevant undergraduate programs|government. |
| |equitably accessible to its clientele; |Inadequate number of classroom and other |
| |Be an institution where workers/professionals in industry, |school facilities. |
| |teaching and other |Inadequate number of qualified teaching |
| |professions seek advanced studies to upgrade their |professionals (Masters and Doctorate). |
| |competencies; | |
| |Be an institution where appropriate technologies are | |
| |continuously generated, | |
| |modified/ improved and utilized by the industry and the | |
| |people; and | |
| |Promote entrepreneurial development | |
| | | |
|Museo Dabawenyo |As an educational institution, the Museum shall take the lead|Limited budget allocation from the |
| |in disseminating knowledge of Dabawenyo cultural and |government. |
| |historical heritage and developing a corps of |Limited display area for museum exhibits. |
| |professional personnel knowledgeable about the |Inadequate number of curator, tour guides |
| |preservation, enrichment and dynamic evaluation of the |and other museum personnel. |
| |Dabawenyo culture; and | |
| |As a cultural center, the Museum shall take the lead in the | |
| |study and preservation of the City's rich artistic, and | |
| |cultural heritage, in the reconstruction and rebuilding of | |
| |our past, and the development of the City's cultural wealth | |

Relationship of Goals and Resource Constraints

Introduction

Economics can be defined as

First, The study of the production, distribution and consumption of goods and services. This indicates that economics includes any business, nonprofit organization, or administrative unit

Second, The study of choice related to the allocation of scarce resources. This establishes that economics is at the core of what managers of these organizations do.

Managerial economics, which is a subfield of economics places special emphasis on the choice aspect in the second definition. The purpose of managerial economics is to provide economic terminology and reasoning for the improvement of managerial decisions.

Resources (physical capital, labor etc.) are very vital in the existence of every organization. It helps the organization accomplish its objectives. But in reality, resources are considered scarce and managers are faced with the challenge on how to allocate them on various activities of the firm to achieve its goals and objectives. Managerial economics helps managers decide on the allocation of scarce resources to achieve the firm’s objectives and goals.

There are two conceptual approaches in the study of economics: microeconomics and macroeconomics. Microeconomics studies phenomena related to goods and services from the perspective of individual decision-making entities—that is, households and businesses. Macroeconomics approaches the same phenomena at an aggregate level, for example, the total consumption and production of a region. Microeconomics and macroeconomics each have their merits. Since the purpose of managerial economics is to apply economics for the improvement of managerial decisions in an organization, most of the subject material in managerial economics has a microeconomic focus. However, since managers must consider the state of their environment in making decisions and the environment includes the overall economy, an understanding of how to interpret and forecast macroeconomic measures is useful in making managerial decisions.

San Pedro Hospital

In order for the hospital to provide the best quality and compassionate health care services it must wisely allocate their resources which are primarily subject to financial constraints. The demand and supply for healthcare services has to be studied to determine whether the hospital’s facilities are enough to accommodate the needs of its clientele. The choice to expand hospital building, acquire hospital equipment and hire medical specialist needs managerial economics to ensure that decisions made increases the hospital’s potential to achieve its objectives.

Davao del Norte State College

As a government-owned institution, the school’s constraint is the limited budget allocation from the government. The school has to consider the demand and supply of educational services in deciding what undergraduate programs must be offered. Furthermore, there should be a study on the environment where the school operates and consider factors which may affect the outcome of its decisions (i.e. the implementation of K to 12 learning system). The effective deployment of school’s resources into different activities undertaken must be aligned with the achievement of its objectives.

Museo Dabawenyo

A major resource constraint of the museum is the limited budget allocation from the government. Factors which may influence the demand for museum services (including price) and number of museums in the locality must be considered in deciding on matters like expanding the museum display area, frequency of exhibits, hiring tour guides and curators. These managerial decisions must be consistent with the achievement of the museum’s objectives.