MANAGERIAL ECONOMICS IS CONCERNED WITH THE APPLICATION OF ECONOMIC CONCEPTS AND ECONOMICS TO THE PROBLEM S OF FORMULATING RATIONAL DECISION MAKING

MANAGERIAL ECONOMICS

Use of basic economic theories in the business decision making

MANAGERIAL ECONOMICS

MANAGERIAL ECONOMICS IS THE INTEGRATION OF ECONOMIC THEORY WITH BUSINESS PRACTICE FOR THE PURPOSE OF FACILITATING DECISIONS AND FORWARD PLANING

ECONOMICS

IS A SOCIAL SCIENCE WHICH STUDIES HUMAN BEHAVIOUR IN RELATION TO OPTIMIZING

ALLOCATION OF AVAILABLE RESOURCES

TO ACHIEVE THE GIVEN ENDS

ECONOMICS

IS A STUDY OF THE CHOICE MAKING BEHAVIOUR OF THE PEOPLE

ECONOMICS CONTRIBUTE

A GREAT DEAL TOWARDS THE PERFORMANCE OF MANAGERIAL DUTIES JUST AS BIOLOGY CONTRIBUTE TO THE MEDICAL PROFESSION

MANAGERIAL ECONOMICS

IS THE STUDY OF ECONOMIC THEORIES,LOGIC AND TOOLS OF ECONOMICS ANALYSIS THAT ARE USED IN THE PROCESS OF BUSINESS DECISION MAKING

SCOPE OF MANAGERIAL ECONOMICS MANAGERAIL ECONOMICS

COMPRISES OF MICRO AND MACRO ECONOMICS

MICRO ECONOMICS

MICRO MEANS SMALL MICRO ECONOMIC ISE STUDY OF

PARTICULAR FIRMS,PARTICULAR HOUSEHOLDS,INDIVIDUAL PRICES,WAGES,INCOMES,INDIVIDUAL INDUSTRIES,PARTICULAR COMMODITIES

MICRO ECONOMICS IS THE MICRO SCOPIC STUDY OF THE ECONOMY

MANAGERIAL ECONOMICS

IS THE APPLIED ECONOMICS

MICRO ECONOMICS THEORY

THEORY OF DEMAND THEORY OF PRODUCTION AND COST FACTOR PRICING (THEORY OF

DISTRIBUTION THEORY OF ECONOMIC WELFARE THEORY OF INTERNATIONAL TRADE

MACRO ECONOMICS

MACRO MEANS LARGE MACRO ECONOMICS IS CONCERNED

WITH THE ANALYSIS OF THE ECONOMY AS A WHOLE

MACRO ECONOMICS STUDIES THE ENTIRE ECONOMIC SYSTEM

MACRO ECONOMICS IS NOT CONCERNED WITH A PARTICULAR DECISION MAKING UNIT BUT WITH ALL SUCH UNITS COMBINED TOGETHER

THEORIES OF PROFITS

HAWLEYS RISK THEORY OF PROFITS KNIGHTS THEORY OF PROFITS SCHUMPETER INNOVATION THEORY

OF PROFITS CLARKE DYNAMIC THEORY

OBJECTIVES OF THE BUSINESS FIRMS CONVENTIONAL THEORY OF FIRMS

ASSUME THAT PROFIT MAXIMIZATION AS THE SAME OBJECTIVE OF THE FIRMS

RECENT RESEARCHERS ON THIS ISSUE REVEALS THAT THE OBJECTIVE OF THE FIRMS PURSUE ARE MORE THAN ONE

SOME OTHER OBJECTIVES OF THE FIRMS MAXIMIZATION OF SALES REVENUE MAXIMIZATION OF FIRM GROWTH

RATE MAKING SATISFACTORY RATE OF

PROFIT LONG RUN SURVIVAL OF THE FIRMS ENTRY PREVENTION

DEFINATION ECONOMICS

ECONOMICS IS THAT BRANCH OF KNOWLEDGE THAT STUDIES PRODUCTION CONSUMPTION INVESTMENTS EXCHANGE DISTRIBUTION

PRODUCTION

PRODUCTION IS THAT ACTIVITY WHICH IS CONCERNED WITH INCREASING THE UTILITY OR VALUE OF GOODS AND SERVICES

MANUFACTURNG SHIRT WITH HELP OF CLOTH IS THE ACT OF PRODUCTION

CONSUMTION

CONSUMPTION IS THAT ECONOMIC ACTIVITY WHICH IS CONCERNED WITH THE USE OF GOODS AND SERVICES FOR THE DIRECT SATIFACTION OF INDIVIDUAL AND COLLECTIVE WANTS

EATING BREAD IS THE CONSUMPTION ACTIVITY

SERVICES OF DOCTORS IS THE CONSUMPTION ACTIVITY

ECONOMICS

ECONOMICS IS THE SCIENCE YHAT STUDIES HUMAN BEHAVIOUR AS A RELATIONSHIP BETWEEN ENDS AND SCARCE MEANS WHICH HAVE ALTERNATIVE USES

ECONOMICS IS A SCIENCE OF CHOICE IT DEALS WIH HOW THE RESOURCES OF

SOCIETY SHOULD BE ALLOCATED TO THE SATISFACTION OF DIFFERENT WANTS

ENDS MEANS WANTS

ECONOMICS

HAS ITS ORIGIN FROM TWO GREEK WORDS

OIKOS(HOUSEHOLD) NOMOS(TO MANAGE) ECONOMICS WAS USED TO MEAN

HOME MANAGEMENT WITH LIMITED FUNDS AVAILABLE IN THE MOST POSSIBLE ECONOMICAL MANNER

DIFFERENCE BETWEEN ECONOMICS AND MANAGERIAL ECONOMICS ECONOMICS TELLS US ABOUT BODY

OF PRINCIPLE WHILE THE MANAGERIAL ECONOMICS TELLS DEALS WITH THE APPLICATION OF ECONOMIC PRINCIPLES TO THE PROBLEM OF THE FIRM

DIFFERENCE BETWEEN ECONOMICS AND MANAGERIAL ECONOMICS ECONOMICS HAS BOTH

CHARACTERSTICS OF MICRO AND MACRO

MANAGERIAL ECONOMICS HAS MAJOR CHARACTERSTICS OF MICRO

DIFFERNCE BETWEEN ECONOMICS AND MANAGERIAL ECONOMICS MICRO ECONOMICS AS A PART OF

ECONOMICS DEALS WITH INDIVIDUALS AND FIRMS

WHILE MANAGERIAL ECONOMICS DEALS ONLY WITH FIRMS AND NOT WITH INDIVIDUALS

DIFFERENCE BETWEEN ECONOMICS AND MANAGERIAL ECONOMICSMICRO ECONOMICS BEING PART OF

ECONOMICS DEALS WITH DISRIBUTION THEORY OF RENT,INTEREST,PROFIT.WAGES

WHILE MANAGERIAL ECONOMICS DEALS ONLY IN PROFITS.

CHARACTERTICS OF MANAGERIAL ECONOMICS MANAGERIAL ECONOMICS IS A

MICRO ECONOMICS THE STUDY UNIT OF MANAGERIAL

ECONOMICS IS THE FIRM IT DOES NOT STUDY THE ENTIRE ECONOMY

MANGERIAL ECONOMICS DEALS WITH THEORY OF FIRM IN OTHER WORDS IT IS ECONOMIES OF FIRM

ROLE OF MANAGERIAL ECONOMIST MANAGERIAL ECONOMIST CAN PLAY

A VERY IMPORTANT ROLE BY ASSISTING MANAGEMENT IN USING THE SPECIALIZED TECHNIQUES , SKILLS WHICH ARE REQUIRED TO SOLVE THE DFFICULT PROBLEM OF SUCCESSFUL DECISION MAKING AND FORWARD PLANNING

ROLE OF MANAGERIAL ECONOMISTWHILE MAKING A SPECIFIC DECISION

MANAGERIAL ECONOMIST HAS TO STUDY BOTH INTERNAL AND EXTERNAL FACTORS

ROLE OF MANAGERIAL ECONOMIST EXTERNAL FACTORS : ARE THOSE

FACTORS IN WHICH MANAGEMENT DOES NOT HAVE ANY CONTROL LIKE GOVT POLICIES, FOREIGN TRADE POLICIES ,EXTERNAL COMPETITION ETC

INTERNAL FACTORS

ARE THOSE FACTORS WHICH ARE CONTROLLABLE BY THE MANAGEMENT EXAMPLES FIXING THE SALES AND PRODUCTION OF THE BUSINESS S, DETERMINING THE TARGET PROFITS OF THE BUSINESS,PRODUCTION SCHEDULE ,WAGES POLICIES ETC

DEFINATIONS ECONOMICS

ECONOMICS IS RELATED TO ONE ASPECT OF HUMAN BEHAVIOR OF MAXIMIZING SATIFACTION FROM SCARCE RESOURCES

MICRO ECONOMICS

IS THE STUDY OF ECONOMIIC ACTIONS OF INDIVIDUALS AND SMALL GROUP OF INDIVIDUALS,THIS INCLUDES THE STUDY OF PARTICULAR F FIRMS,PARTICULAR HOUSEHOLDS,INDIVIDUAL PRICES ,WAGES,INCOME,INDIVIDUAL INDUSTRIES,INDIVIDUAL COMMODITIES

EXAMPLES OF MICRO ECONOMICS THE DETERMINATION OF

EQUILIBRIUM OUTPUT OF THE FIRM THE WAGES OF PARTICULAR TYPE OF

LABOUR PRICE OF PARTICULAR COMMODITY

LIKE RICE,TEA, OR CAR

MACRO ECONOMICS

IS THE STUDY OF AGGREGATES OR AVERAGES COVERING THE ENTIRE ECONOMY SUCH AS TOTAL EMPLOYMENT,UNEMPLOTMENT,NATIONAL INCOME,NATIONAL OUTPUT,TOTAL INVESTMENT,TOTAL CONSUMPTION,TOTAL SAVINGS,AGGREGATE SUPPLY,AGGREGATE DEMAND AND GENERAL PRICE LEVEL,INTEREST RATES

MACRO ECONOMICS

IT IS THE AGGREGATIVE ECONOMICS IT DEALS WITH ECONOMIC AFFAIRS

IN THE LARGE

MACRO ECONOMICS

IS ALSO KNOWN AS THE THEORY OF INCOME AND EMPLOYMENT

IT IS CONCERNED WITH THE PROBLEM OF UNEMPLOYMENT ,ECONOMIC FLUCTUATIONS ,INFLATION, DEFLATION,STAGNATION,INTERNATIONAL TRADE AND ECONOMIC GROWTH

CONSUMER DEMAND

CONSUMER DEMAND IS THE BASIS OF ALL THE PRODUCTIVE ACTIVITY

DEMAND IS THE MOTHER OF PRODUCTION

INCREASING DEMAND FOR THE PRODUCT OFFER HIGH BUSINESS PROSPECTS

DEMAND DEFINATION

DESIRE FOR A COMMODITY BACKED BY THE ABILITY AND WILLINGNESS TO PAY FOR IT

BASIS OF CONSUMER DEMAND

CONSUMER DEMAND A COMMODITY BECAUSE THEY DERIVE UTILITY FROM THE CONSUMPTION OF THE COMMODITY

UTILIY

IS THE WANT SATISFYING PROPERTY OF THE COMMODITY

MARGINAL UTILITY

IT IS DEFINED AS THE UTILITY DERIVED FROM THE ADDITIONAL UNIT CONSUMED

IN OTHER WORDS IT IS DEFINED AS THE ADDITION TO THE TOTAL UTILITY FROM THE CONSUMPTION OF ONE ADDITIONAL UNIT

LAW OF DIMINISHING MARGINAL UTILITY THE LAW OF DIMINISHING MARGINAL

UTILITY IS ONE OF THE FUNDAMENTAL LAWS OF ECONOMICS

IN SIMPLE WORDS WHEN A PERSON CONSUMES MORE UNITOF A COMMODITY UTILITY DERIVED FROM SUCCESSIVE UNITS GOES ON DIMINISHING

LAW OF DIMINISHING MARGINAL UTILITY THIS LAW IS APPLICABLE OF ALL

KINDS OF CONSUMER GOODS DURABLE AND NONDURABLE

LAW OF DEMAND

WHENEVER THERE IS RISE IN PRICES DEMAND FALLS

WHENEVER THERE IS FALL IN PRICES DEMAND INCREASE

SHAPE OF DEMAND CURVE

DEMAND CURVE IS DOWN WARD SLOPING

SLOPING DOWN WARD TOWARD RIGHTS

FACTORS AFFECTING DEMAND

PRICE OF THE COMMODITY PRICE OF COMPLEMENTORY GOODS PRICE OF SUBTITUTE GOODS INCOME OF THE CONSUMER TASTE AND PREFERENCE OTHERS FACTORS

ROLE OF MANAGERIAL ECONOMICS IN DECISION MAKING UNDER RISK AND UNCERTAINITY

ROLE OF MANAGERIAL ECO

ECONOMICS PROVIDES TOOLS AND TECHNIQUES THAT MANAGERS NEED TO ACHIEVE THE GOALS OF THE ORGANIZATION THEY MANAGE

WORKING KNOWLEDGE OF ECONOMICS IS ESSENTIAL FOR MANAGERS

MANAGERS ARE PRACTICING ECONOMIST

ROLE OF MANAGERIAL ECO

IN PERFORMING THE FUNCTIONS MANAGER HAS TO TAKE MANY DECISIONS UNDER THE CONDITION OF RISK AND UNCERTAINITY

ROLE OF MANAGERIAL ECO

RISK AND UNCERTAINITY ARISE MAINLY DUE TO UNCERTAIN BEHAVIOUR OF THE MARKET FORCES ,CHANGING ENVIRONMENT,EMERGENCE OF COMPETITORS,GOVT POLICIES ,SOCIAL AND POLITICAL CHANGES,EXTERNAL INFLUENCE ON THE DOMESTIC MARKETS

ROLE OF MANAGERIAL ECO

COMPLEXITY OF THE MODERN BUSINESS ADD TO THE COMPLEXITY OFTO THE BUSINESS DECISION MAKING

ROLE OF MANAGERIAL ECO

DEGREE OF UNCERTAINTY AND RISK CAN BE GREATLY REDUCED IF MARKETS COONDITIONS ARE PREDICTED WITH SOME RELIABILITY

ECONOMICS OFFER TOOLS, TECHNIQUES,VARIOUS LAWS TO PREDICT THE FUTURE COURSE OF MARKETS CONDITIONS AND BUSINESS PROSPECTS

ROLE OF MANAGERIAL ECO

APPLICATION OF ECONONICS THEORIES CONTRIBUTE A GREAT DEAL IN RATIONAL DECISION MAKING

ROLE OF MANAGERIAL ECO

ECONOMICS THEORIES STATE THE FUNCTIONAL RELATIONSHIP BETWEEN TWO OR MORE ECONOMIC VARIABLES

ECONOMIC THEORIES GIVES A CLEAR UNDERSTANDING OF VARIOUS ECONOMIC CONCEPT LIKE

DEMAND SUPPLY COST PRODUCT MARKETS EXCHANGE RATES INFLATION ETC

CONCLUSION

APPLICATION OF ECONOMIC THEORIES TO THE PROBLEM OF BUSINESS NOT ONLY GUIDES ASSIST IN THE PROCESS OF DECISION MAKING BUT ALSO CONTRIBUTE A GOOD DEAL TO THE VALIDITY OF THE DECISIONS

Complimentary goods

The goods which are used jointly to satisfy particular want

Tea and sugar Petrol and car Bulb and electricity IF THE PRICE FOR COMLIMENTARY

GOOD RISES THAN DEMAND FOR OTHER GOOD WILL FALL

Exceptions to law of demand INFERIOR GOODS IGNORANCE GOODS OF OSTENTATION STATUS

SYMBOL) EMERGENCY FUTURE EXPECTATION OF RISE IN

PRICE GOOD TO BE BECOME SCARCE IN

FUTURE

PAY BACK PERIOD

DISADVANTAGES TIME VALUE OF MONEY IS IGNORED FORECASTING OF CASH INFLOWS IS

NOT EASY PROFITS AFTER PAY BACK PERIOD IS

IGNORED ADVANTAGES SIMPLE NO CALCULATIONS

DEFINATION PAY BACK PERIOD TIME REQUIRE TO RECOVER THE

INVESTMENT SHORTEST THE PAY BACK PERIOD

BETTER THE PROPOSAL

INVESTMENT DECISION CAPITAL BUDGETING TECHNIQUES PAY BACK PERIOD NPV ACCOUNTING RATE OF RETURN IRR PROFITABILITY INDEX

CHANGES IN DEMAND

WHAT HAPPEN TO THE DEMAND IF THERE IS ANY CHANGE IN THE FACTORS OTHER THAN PRICE

THERE IS SHIFT IN DEMAND CURVE THAT IS RIGHT OR LEFT IF THERE IS RIGHT WARD SHIFT THAN IT IS

INCREASE IF THERE IS LEFTWARD SHIFT THAN IT IS

DECREASE THE FACTORS WHICH CHANGES ARE

INCOME,TASTE,FASHION,PRICE OF RELATED GOODS ETC

CHANGE IN DEMAND(CHANGE IN QUANTITY DEMANDED) WHEN THERE IS CHANGE IN DEMAND

DUE TO PRICE OF THE COMMODITY ITSELF

THE PROCESS IS CALLED EXTENSION AND CONTACTION

THERE IS THE MOVEMENT ALONG SAME DD CURVE

UPWARD MOVEMENT IS CALLED CONTACTION AND DOWN WARD MOVEMENT IS EXTENSION

ELASTICITY OF DEMAND

RESPONSIVENESS OF DEMAND TO CHANGE IN PRICE

TYPES OF ELASTICITY

PRICE ELASTICITY INCOME ELASTICITY CROSS ELASTICITY

FACTORS AFFECTING ELASTICITY OF DEMAND NATURE OF THE COMMODITY SUBTITUTES VARIETY OF USES DEFERRED CONSUMPTIONS HABITS INCOME GROUP PROPOTION OF INCOME SPENT LEVEL OF PRICES

NATIONAL INCOME

NATIONAL INCOME IS THE MONEY VALUE OF ALL FINAL GOODS AND SERVICES PRODUCED IN COUNTRY DURING A PERIOD OF ONE YEAR

MARKETS

REFERS TO PARTICULAR PLACE WHERE GOODS ARE PURCHASED AND SOLD

NPV

PV INFLOWS – PV CASH OUTFLOWS

MARKETS

BUT IN ECONOMICS MARKETS IS USED IN A WIDE SPREAD PERSPECTIVE

IN ECONOMICS MARKET DOES NOT REFER TO PARTICULAR PLACE BUT THE WHOLE AREA WHERE THE BUYERS AND SELLERS OF THE PRODUCT ARE SPREAD

ACCORDING TO PROF COURNAT ECONOMIST UNDERSTAND MARKETS

NOT ANY PLACE IN WHICH GOODS ARE BOUGHT AND SOLD BUT WHOLE OF THE REGION IN WHICH BUYERS AND SELLERS ARE IN SUCH FREE INTERCOURSE WITH ONE ANOTHER

MONOPOLY

ONE SELLER LARGE NO OF BUYERS NO CLOSE SUBSTITUTE OF THE

PRODUCT STRONG BARRIERS TO ENTRY FIRM IS THE PRICE MAKER PRICE ELASTICITY IS VERY LOW PRICE DISCRIMINATION NO SELLINF COST

CHARACTERSTICS OF MARKETS AN AREA PRODUCT BUYERS AND SELLERS FREE COMPETITION ONE PRICE

FORMS OF MARKET STRUCTURE PERFECT COMPETITION MONOPOLY DUOPOLY OLIGOPOLY MONOPOLISTIC COMPETITION

CHARACTERSTICS OF PERFECT COMPETITION LARGE NO OF BUYERS AND SELLERS FREE ENTRY FREE EXIT HOMOGENEOUS PRODUCT PROFIT MAXIMIZATION GOAL PERFECT MOBILITY OF GOODS AND

FACTORS PERFECT KNOWLEDGE OF MARKET

CONDITION ABSENCE OF TRANSPORT COST ABSENCE OF SELLING COST

PURE COMPETITION AND PERFECT COMPETITION FIRST FOUR CONDITIONS PURE

COMPETITION ADDITIONAL FOUR CONDITION PURE

COMPETITION

CHARACTERSTICS OF MONOPOLISTIC COMPETITION MANY NO OF SELLERSLARGE NO OF BUYERSFREE ENTRY FREE EXITPRODUCT DIFFERENTITIONFIRM HAS SOME CONTROL OVER THE

PRICEHIGH SELLING COSTPRICE LASTICITY IS VERY HIGHREAL MARKET

INDIFFERENCE CURVE

THE INDIFFERENCE CURVE ANALYSIS MEASURES UTILITY ORDINALLY

IT EXPLAINS CONSUMER BEHAVIOUR IN TERMS OF HIS PREFERENCE

IT IS A LOCUS OF POINTS REPRESENTING PAIRS OF QUANTITIES BETWEEN WHICH THE INDIVIDUAL IS INDIFFERENT

INDIFFERENCE CURVE

A SINGLE INDIFFERENCE CURVE CONCERNS ONLY ONE LEVEL OF SATISFACTION

IT IS A LIST OF COMBINATION OF TWO COMMODITIES EACH COMBINATION PROVIDE SAME LEVEL OF SATISFACTION

SO THE CUSTOMER IS INDIFFERENT WHILE MAKING ANY CHOICE

INDIFFERENCE SCHEDULE

COMBINATIONS X Y 1 1 18 2 2 13 3 3 9 4 4 6 5 5

4 6 6 3

PROPERTIES OF INDIFFERNCE CURVE 1 A HIGHER INDIFFERENCE CURVE TO

THE RIGHT OF ANOTHER REPRESENTS A HIGHER LEVEL OF SATISFACTION

THE SLOPE OF INDIFFERNCE CURVE IS NEGATIVE

INDIFFERENCE CURVES CAN NEITHER TOUCH NOR INTERSECT EACH OTHER

AN INDIFFERECE CURVE IS CONVEX TO THE ORIGIN

Price qty demand 2 20 10 19

Demand is highly in elastic