assignment of managerial economics

Managerial Economics

Managerial Economics - Fundamental and Advanced Concepts

Managerial Economics can be defined as amalgamation of economic theory with business practices so as to ease decision-making and future planning by management .

Managerial Economics assists the managers of a firm in a rational solution of obstacles faced in the firm’s activities. It makes use of economic theory and concepts. It helps in formulating logical managerial decisions.

The key of Managerial Economics is the micro-economic theory of the firm. It lessens the gap between economics in theory and economics in practice.

Managerial Economics is a science dealing with effective use of scarce resources . It guides the managers in taking decisions relating to the firm’s customers, competitors, suppliers as well as relating to the internal functioning of a firm.

It makes use of statistical and analytical tools to assess economic theories in solving practical business problems.

Study of Managerial Economics helps in enhancement of analytical skills, assists in rational configuration as well as solution of problems.

While microeconomics is the study of decisions made regarding the allocation of resources and prices of goods and services, macroeconomics is the field of economics that studies the behavior of the economy as a whole (i.e. entire industries and economies).

Managerial Economics applies micro-economic tools to make business decisions. It deals with a firm.

The use of Managerial Economics is not limited to profit-making firms and organizations. But it can also be used to help in decision-making process of non-profit organizations (hospitals, educational institutions, etc). It enables optimum utilization of scarce resources in such organizations as well as helps in achieving the goals in most efficient manner.

Managerial Economics is of great help in price analysis, production analysis, capital budgeting, risk analysis and determination of demand.

Managerial economics uses both Economic theory as well as Econometrics for rational managerial decision making. Econometrics is defined as use of statistical tools for assessing economic theories by empirically measuring relationship between economic variables. It uses factual data for solution of economic problems.

Managerial Economics is associated with the economic theory which constitutes “Theory of Firm” . Theory of firm states that the primary aim of the firm is to maximize wealth.

Decision making in managerial economics generally involves establishment of firm’s objectives, identification of problems involved in achievement of those objectives, development of various alternative solutions, selection of best alternative and finally implementation of the decision.

The following figure tells the primary ways in which Managerial Economics correlates to managerial decision-making.

Scope of Managerial Economics
Nature of Managerial Economics
Managerial and Micro Economics
Principles of Managerial Economics
Role of a Managerial Economist

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ECON 41900: Managerial Economics

Instructor: Dr. Amlan Mitra Online Meeting: Blackboard (August 22, 2016 – December 17, 2016) Office: Classroom Office Building, CLO 248 Office Hours: Mon/Wed: Noon-1:50 P.M.; and by appointment Telephone: (219)989-2313 E-mail: [email protected]

University Catalog Description

A comprehensive treatment of economic theory and analysis applied to business decisions. Both qualitative techniques are applied to managerial decision making situations. Emphasis is placed on applications of economic concepts and processes to practical business situations.

Prerequisite: ECON 251, MGMT 225.

Course Description and Overall Goal

This is a distance learning course in Managerial Economics. It is designed to provide a solid foundation of economic understanding for use in managerial decision-making. The overall goal of this course is to guide students on the use of managerial economics tools and techniques in specific business settings. The course will offer a comprehensive treatment of economic theory and analysis, using both qualitative and quantitative tools and techniques (e.g. forecasting and estimation techniques) associated with the theory. Examples and problems discussed in the class will illustrate the application of economic thinking to a wide variety of practical situations. Students are recommended to actively participate in all assignments.

Expected Background

You are expected to be familiar with the basic concepts of microeconomics, basic algebra, differential calculus, and business statistics. While we will review almost all basic concepts in class, you may want to jump on any background topics that you may have found difficult to understand in the past. From differential calculus, you must be able to do simple derivatives. Look for review materials and exercises in the “Lecture Materials” of the Course Homepage.

Required Textbook

Loose-Leaf Managerial Economics and Business Strategy With CONNECT (The Mcgraw-Hill Series Economics) 8th Edition. By Michael Baye (Author), Jeff Prince (Author)

Publisher: McGraw-Hill Education; 8 th Edition, 2014

ISBN: 9780077413859

Connect and LearnSmart

Use the access code to register for CONNECT by visiting the following link:

http://connect.mheducation.com/class/a – mitra – smartstart – course_2

You should have full access to the following materials.

LearnSmart (SmartBook w/ Learning Resources: Mobile access to study tools like key terms, math review, self quizzes, and chapter summaries. Mobile access to chapter resources such as web buttons, student PowerPoint slides, and worked problems).

Learning Objectives

ASSESSMENT OF LEARNING OBJECTIVES:

Completing assigned readings, quizzes, lab exercises, case studies, group presentations, term project, and a comprehensive final exam are the basic requirements to meet the five learning objectives. Each of these five learning objectives will be assessed in the following way:

Learning Modules

Student Evaluation :

Completing assigned readings, scheduled quizzes, lab exercises, case studies, and a term paper are the basic requirements to meet our course objectives. Grading procedure: Plus minus grading system will be used for the course based on your overall points.

Course Participation Grade up to 50 points is possible for completing all online assignments (including homework and discussion board assignments) according to the following criteria:

All satisfactory (S) assignments: 50 points. For each unsatisfactory (U) assignment 5 points will be deducted. So, if you receive 2 U’s you will get 40 points. If you receive 10 U’s you will receive a “zero” in course participation.

EXCEL SPREADSHEET ASSIGNMENTS

There will be five Excel Spreadsheet Assignments from the five learning modules. These assignments will be on solving managerial problems using the managerial economics concepts and quantitative business tools. The purpose of these assignments is to prepare you for the quizzes.

There will be five quizzes from the five learning modules. Each Excel Spreadsheet Assignment will be followed by a quiz.

Case Studies

There will be five case studies of involving managerial decision making in business firms and industries. You will be asked to examine each case study to identify and analyze the major managerial decision problems.

A Note on Academic Honesty

Honesty and integrity in academic and personal pursuits are hallmarks of higher education. By acting honestly and with integrity, students maintain and uphold their own reputations, and the reputation of both the School of Management and the University. The Students Handbook states that “the commitment of the acts of cheating, lying, stealing and deceit in any of their diverse forms (such as the use of ghost-written papers, use of substitutes for taking examinations, the use of illegal cribs, plagiarism, and copying during exams) is dishonest.” Also, aiding and abetting in committing dishonest acts is in itself dishonest. The penalty for any student(s) involved in any of such acts will range from an outright zero in the specific assignment the act was committed to a grade of “F” in the course.

Students with Disabilities

In compliance with the Americans with Disabilities Act (ADA), all qualified students enrolled in this course are entitled to reasonable accommodations. It is the student’s responsibility to inform the instructor of any special needs before the end of the second week of class.

EMERGENCY PROCEDURE GUIDE : Please read the university emergency procedure guide.

CLASS MEETING SCHEDULE (SUBJECT TO CHANGE):

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ECON 3041: Managerial Economics

Students focus on the application of economic models and rationale choice to business decision making. Topics include an overview of managerial economics; demand and supply; costs of production and the organization of the firm; market structure and pricing and output decisions; game theory and pricing strategies; and the economics of information and the role of government in the marketplace.

Online, self-paced

Learning outcomes

List the different goals and constraints that firms face
Apply the economic way of thinking to individual decisions and business decisions
Use first and second order derivatives of calculus to solve for an optimum solution
Understand how prices get determined in markets, how market participants benefit in the form of consumer surplus and producer surplus, and what are the consequences of government intervention
Measure the responsiveness of consumers' demand to changes in the price of a good or service, the price of other goods and services, and income
Understand the different costs of production and how they affect short and long run decisions
Derive the equilibrium conditions for cost minimization and profit maximization
Understand economies of scale, diseconomies of scale, economies of scope, and cost complementarities, and how each affects the cost of production
Explain the principal-agent problem and why different forms of compensation exist
Understand the four basic market models of perfect competition, monopoly, monopolistic competition, oligopoly, and how price and quantity are determined in each model
Understand how game theory can be used to explain a number of business decisions
Explain four different pricing practices such as discrimination, two-part pricing, block pricing, commodity bundling, transfer pricing, and peak load pricing
Understand why there is a role for the government to play in market economies

Course topics

Module 1: Fundamentals of Managerial Economics

Module 2: Demand and Supply

Module 3: Costs of Production and the Organization of the Firm

Module 4: Market Structures: Pricing and Output Decisions

Module 5: Game Theory and Pricing Strategies

Module 6: The Economics of Information and the Role of Government in the Marketplace

Required text and materials

The following materials are required for this course:

Baye, M., & Prince, J. (2022). Managerial economics and business strategy (10th ed.). McGraw-Hill. Type: Textbook. ISBN: 9781266071010

Additional requirements

A math calculator, preferably with several memories, square root functionality, logarithms, correlation/regression analysis, and financial analysis (e.g., present values and the internal rate of return).

Assessments

Please be aware that should your course have a final exam, you are responsible for the fee to the online proctoring service, ProctorU, or to the in-person approved Testing Centre. Please contact [email protected] with any questions about this.

To successfully complete this course, students must achieve a passing of 50% or higher on the overall course, and 50% or higher on the final mandatory exam.

Open Learning Faculty Member Information

An Open Learning Faculty Member is available to assist students. Students will receive the necessary contact information at the start of the course.

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ECON 3041 Estimated Costs

Tuition and course fees: Includes tuition, administration, technology and other related fees.

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84 Managerial Economics Essay Topic Ideas & Examples

🏆 best managerial economics topic ideas & essay examples, 🔎 good research topics about managerial economics, 👍 simple & easy managerial economics essay titles, ❓ managerial economics essay questions.

Louis Vuitton Company’ Managerial Economic As the analysis of the company’s current position in the retail market and the strategies adopted by its leader show, LV will have to alter some of its marketing and leadership-related principles as well as […]
The Epix Firm’s Managerial Economics and Business Strategy Currently, the subscribers in the movie channels are price sensitive and less likely to see the value of the new program tiers or media channels. We will write a custom essay specifically for you by our professional experts 808 writers online Learn More
Managerial Economics: Unilever Corporation Market demand, which refers to the demand for a group of products that represent industry, is distinguishable from company demand and the demand of a control unit.
Managerial Economics: Tesla, Inc. It reflects on Tesla’s position in the market of electric vehicles and presents the analysis of the company’s decision to reduce its workforce.
Etihad Airways Company Managerial Economics The ruler of Abu Dhabi appoints the chief executive of the airline who in turn runs the affairs of the airline. The second competitive advantage of Etihad Airways is the preferential treatment the airline receives […]
Bank of America: Managerial Economics and Analysis The article also integrates how the economic situation of today affects the strategic decisions made by the company and the managerial economics exhibited in the company.
Managerial Economics and Demand Effective demand refers to the desire to buy, the willingness to pay, and the ability to pay for goods and services.
Strategic Bargaining in Managerial Economics The bargaining party with the most leverage stands to gain a 75% advantage from the negotiations if they choose to commit to a strategy in a “game of chicken”.
Marginal Analysis: Managerial Economics It is based on the study of the causal relationship between sales, costs, and profit and the division of costs into fixed and variable.
Managerial Economics: Pepsi Cola Company Whether the conflict between the three divisions hinder the company to compete in the market; Whether the present structure is cost-competitive; and Whether the present organizational structure will be able to meet the challenge posed […]
Global Managerial Economics in Different Nations Nations more open to the world economy score above the less globalized countries in respect for the rule of law and protection of property rights.
Managerial Economics: Solving the Principal Agent Problem The five forces framework is aimed to analyze the level of competition within a particular industry in order to draw conclusions about the profitability of this industry and, consequently, the profitability of organizations that operate […]
Managerial Economics Conceptions Therefore, it will appear that the total amount of the fee is $20,000 and that the student pays less than half of the fees.
Value Creation & Conflict Resolution in Management Value could be created by lowering the cost of production and changing the prices of substitutes to increase demand. The first step is to diagnose the cause of the conflict by listening to the involved […]
Managerial Economics and Its Principles It is the cost assigned to one unit of the product produced by the company. In such a market, the MR curve is horizontal, and it is equal to the price.
Private Aviation in Managerial Economic Analysis In 2008, the demand for the jets that are usually used in private aviation was extremely high. The price of the jets that are often used in private aviation tends to change.
Managerial Economics and Organizational Architecture Leadership is essential not only in the proactive transformational change within the organization but also in the achievement of the organizational goals and objectives.
Managerial Economic Opportunity Cost The first part covers the definition of opportunity cost and an example of a situation that gives rise to opportunity cost.
Managerial Economics – A Pharmaceutical Company There are also other factors to take into consideration, such as the market value of a future product and the costs of the research.
Applied Managerial Economics: SWOT Analysis
Who Are the Biggest People Involved With Managerial Economics?
Managerial Economics: Summary and Perspectives
Can Managerial Economics Aid the Chief Executive Officer?
What Are the Top Managerial Economics Theories That Are Used?
Managerial Economics: Use, Advantages, and Disadvantages
Difference Between Economics and Managerial Economics
How Managerial Economics Affect a Publicly Traded Firm
Managerial Economics: Analyzing Strategic Behavior in Business
The Relationships Between Managerial Economics and Business Strategy
Correlations of Managerial Economics and Capital Budgeting
Managerial Economics and Corporate Governance in Heineken
The Link Between Managerial Economics and Global Competition
How Understanding Managerial Economics Can Help Managers in Global Environments
Self-Education of Entrepreneurs in Managerial Economics Concepts to Run Successful Enterprises
Difference Between Theoretical Managerial Economics Strategies and Real-World Solutions
Teaching Managerial Economics in Higher Education – Practices and Challenges
Link Between Managerial Economics and Business Strategies and Formulating Implications
Firm Strategic Management Through the Resource-Based Lens
Managerial Economics and Implications for Agricultural Decision Making
Managerial Economics and Its Application in Banking Sector
The Relations Between Managerial Economics and Organizational Architecture
Managerial Economics: Perfect Competition and Monopoly
Mezzo Economics Analitycal Approach as the Propulsive Part of Managerial Economics
The Nature and Scope of Managerial Economics
Applying Managerial Economics in Practice
The Biggest Technological Breakthroughs With Regards to Managerial Economics
Type of Professionals Work in the Managerial Economics Space
How Can Managerial Economics Be Improved in the Future?
Analyzing the Importance of Managerial Economics
Managerial Economic Perspective of the Maker of Tutor’s Frozen Feasts
The Place of Managerial Economics in the 21st Century
Comparing and Analyzing Different Tools of Managerial Economics
Overview of the Global Managerial Economics in the Current World
Analyzing the Most Effective Solutions for Managerial Economics
The Interplay of Intuition, Luck, and Knowledge in Factor Markets in Emerging Economies
Gender Impact on Execution of Business Strategy for Effective Economics Performance
The Compatibility Between Organizational Theory and Managerial Economics Frameworks
Using Managerial Economics Models for Decision Support Systems in Service Industries
Managerial Economics and Implications for Facilities Management in Community Environments
What Is the Difference Between Economics and Managerial Economics?
Is Managerial Economics a Branch of Economics?
What Is the Nature and Scope of Managerial Economics?
How Many Types of Managerial Economics Are There?
What Is Managerial Economics Related With?
Who Is the Father of Managerial Economics?
What Are the Limitations of Managerial Economics?
Is There a Relationship Between Managerial Economics and Statistics?
What Are the Different Areas of Managerial Economics?
How Is Managerial Economics Used in Decision-Making?
What Are the Central Problems of an Economy in Managerial Economics?
What Is the Role and Responsibility of Managerial Economics?
Can Novice Entrepreneurs Self-Educate Themselves in Managerial Economics Concepts Run Successful Enterprises?
What Is the Application of Managerial Economics?
How Many Basic Concepts Are There in Managerial Economics?
What Is the Law of Demand in Managerial Economics?
What Is the Difference Between Managerial Economics and Economic Theory?
Is Managerial Economics Applied in Decision-Making?
What Are the Basic Concepts of Managerial Economics?
How Can Self-Help Books on Managerial Economics Help Businessmen to Diagnose Issues and Arrive at Practical Solutions?
What Are the Uses and Importance of Managerial Economics?
What Are the Tools of Managerial Economics?
Are There Similarities Between Managerial Economics and Managerial Accounting?
What Is the Nature of Managerial Economics?
What Is the Role of Managerial Economics in Business?
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Managerial Economics: Importance, Significance, Nature, Scope, and Role

Meaning of Managerial Economics

Managerial economics refers to the management of business using economic theories, tools, and concepts. It is simply the amalgamation of management principles and economic theories for better problem solving and decision making. It is a branch of economics that applies economic theories for analysis, assumption, and prediction of business conditions.

Managerial economics bridges the gap between economics in theory and economics in practice. It assists the managers in logically solving business problems and rational decision making. The key function of managerial economics is efficient decision making and chooses the most suitable action out of two or more alternatives. It monitors and ensures that all scarce resources like labor, capital, land, etc. are properly utilized to derive better results.

Managerial economics performs three important roles for business organizations : Demand analysis and forecasting, capital management and profit management. Firms with the application of managerial economics optimally decide what to produce, how to produce and for whom to produce.

Role of Managerial Economics

Studies Business Environment: Managerial economics properly analyze the external environment within which the business operates. These factors influence the working of the business and therefore should be considered while taking any decisions and framing policies. Managerial economic studies all factors like economic scenario, government policies, price trends, national income growth, etc.
Production Scheduling: Managerial economics manages and prepare schedules for all production activities of business. It estimates all future demands using various quantitative tools which helps in making production plans.
Control Cost: Controlling the cost is vital for achieving the desired profitability and growth. Managerial economics estimates the cost of all business activities and identify all those factors that cause variations in cost from time to time. It aims at minimizing the cost through optimum utilization of all resources.
Set Prices: Setting the right price is a very challenging task for every business organization. Managerial economics helps management in fixing the correct price by supplying all information regarding competitors pricing methods.
Bring Coordination: Managerial economics brings coordination and flexibility in all operations of the business. It supports effective decision making by providing all relevant data using economic theories and tools.
Investment Analysis: Managerial economics ensures that all business funds are allocated to profitable means. It properly analyzes the profitability of all investment avenues before investing any amount into it.

Importance of Managerial Economics

Business Planning and Forecasting: Managerial economics plays an efficient role in formulating business policies by forecasting future demands and uncertainties. It assists in the effective decision making of an organization by supplying all information using economic tools and techniques.
Analyze Cost and Production level: Managerial economics focuses on minimizing the cost of business. It determines the cost associated with different business processes and finds out the cost-minimizing level of output. Managerial economics enables business managers in ensuring that there is no resource wastage which reduces the overall cost.
Formulate pricing policies: It helps in determining the right pricing policies for organizations. Pricing method affects the profitability and revenue of the business organization and therefore fixing the right price is essential. Managerial economics analyses the market pricing structure and strategies for deciding the firm prices.
Manages profit: Managerial economics monitor and control the profitability of the business organization. Profit is the ultimate goal of every business and determines its success or growth. It ensures that the desired profit is earned by making an estimate of the revenue and expenses of an organization at different levels of outputs.
Capital Management : Capital management is one of the important functions played by managerial economics. It manages and analyses all capital expenditures of business which involves huge expenditures. Before investing any amount anywhere it measures the profitability of such a source for allocating funds.

Significance of Managerial Economics

Business Planning : Managerial economics assists business organizations in formulating plans and better decision making. It helps in analyzing the demand and forecasting future business activities.
Cost Control : Controlling the cost is another important role played by managerial economics. It properly analyses and decides production activities and the cost associated with them. Managerial economics ensure that all resources are efficiently utilized which reduces the overall cost.
Price Determination : Setting the right price is one of the key decisions to be taken by every business organization. Managerial economics supplies all relevant data to managers for deciding the right prices for products.
Business Prediction : Managerial economics through the application of various economic tools and theories helps managers in predicting various future uncertainties. Timely detection of uncertainties helps in taking all possible steps to avoid them.
Profit Planning And Control : Managerial economics enables in planning and managing the profit of the business. It makes an accurate estimate of all cost and revenue which helps in earning the desired profit.
Inventory Management : Proper management of inventory is a must for ensuring the continuity of business activities. It helps in analyzing the demand and accordingly, production activities are performed. Managers can arrange and ensure that the proper quantity of inventory is always available within the business organization.
Manages Capital : Managerial economics helps in taking all decisions relating to the firm’s capital. It properly analyses investment avenues before investing any amount into it to ensure the profitability of an investment.

Nature of Managerial Economics

Art and Science: Managerial economics is termed as both art and science. The application of managerial economics in decision making requires creativity and lots of analytical thinking. It is regarded as science as it uses various economic theories and concepts for managing business and solving problems.
Management oriented: Managerial economics is a management-oriented concept. It helps the management in rational decision making and solving all business problems logically by supplying all relevant information.
Multi-disciplinary: Managerial economics is multidisciplinary in nature. It uses principles and theories from various subjects like economics, finance, statistics, marketing, accounting, mathematics, human resource, etc.
Close to Micro Economics : Managerial economics analyses and solves problems of a particular firm or organization only but not of the whole economy. It focuses on individual units of the economy and provides optimum solutions for facing problems.
Uses Macro Economics: Managerial economics properly studies macro or external environment within which business operates for better management of the business. It analyses different external factors that affect the business organization like economy state, government policies, market conditions, etc.
Prescriptive discipline: Managerial economics defines course of action for business for attaining goals and objectives. It chooses the best option among all alternatives available for solving the problems.
Conceptual: Managerial economics is conceptual in nature as it is based on economic theories and concepts. It does not work on an arbitrary collection of prescriptions but analyze all business problems on the basis of well-established economic concepts.

Scope of Managerial Economics

Decision making: Managerial economics helps business organizations in taking effective decisions. It tells how management can use various quantitative tools and economic theories for formulating policies and various managerial decisions.
Production and cost analysis: It helps in estimating the cost of production and determines factors causing variations in cost estimates. Managerial economics properly analyses and decides production activities and costs associated with them. It ensures that all resources are efficiently utilized which reduces the overall cost.
Demand Analysis and Forecasting: Managerial economics enables the business in analyzing demand and forecasting future uncertainties. An accurate estimate of demand will help in preparing the right production schedules and employing resources accordingly.
Pricing policies: Pricing is one of the key decisions to be taken by every business organization for earning the desired profits and attaining desired growth. Managerial economics supplies all relevant data to managers for deciding the right prices for products. Key aspects covered under this area are Pricing methods, product-line pricing, differential pricing, and price determination in various market forms.
Profit management: Managerial economics helps in managing the profit of business organizations. Profit is the main measure for the success or growth of firm in the long run. It helps in making correct estimates of all cost and revenue at different levels of outputs which helps in earning the desired profit.
Capital management: Capital investment decisions is one of the most challenging and complex tasks before every manager. Managerial economics helps in planning and managing all capital expenditures of business which requires huge investment. It properly analyses investment avenues before investing any amount into it to ensure the profitability of an investment.

Managerial Economics: Importance, Significance, Nature, Scope, and Role PDF

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MANAGERIAL ECONOMICS ASSIGNMENT 1

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Judging from every economic parameter, Nigeria will suggest being a failed nation. Not so long ago international investors identified Nigeria as one of the world’s most promising investment opportunities, but things have changed drastically in the meantime. The slump in the price of crude oil has hit Nigerian economy hard, the twin curses of insecurity and corruption have not gone away either. The Nigerian currency - naira has also lost its value by 170% from its value in 2015. The question most analysts and citizens are now asking is if Nigeria will ever fulfil its potential. This study empirically analyses the current economic situation of Nigeria, and gives recommendations on what government should do in getting the country out of recession.

graeme chamberlin

Journal of International Money and Finance

Daniel Riera-crichton

Leonardo Vera

Sonja Avlijaš

Ebele Stella Nwokoye

Given its consumptionist nature, economic activities in Nigeria are mainly driven by household aggregate consumption expenditure with greater percentage of the spending on consumer-goods-importation. A statistical performance-illustration of the sectoral components of Nigeria's gross domestic product (GDP) provided pointers to a recession and further provided insights towards facilitating functional dimensions for moving the economy from recession to renaissance. Evidences from the sectoral scrutiny showed asymmetric growth in GDP and its major components. While growth in agriculture, construction, trade, and service sectors boosted GDP growth in 2015, only the agricultural and service sectors recorded positive growths in the making of 2016 GDP leaving the abysmal performance of the other sectors accountable for the current recession. This study also documented a positive strength of relationship between the growth rates of Nigeria's real GDP and service sector contributions-a cursor to the role played by human capital development, administrative and professional services. Based on findings, this study recommends import-substitution strategies aimed at encouraging growth in the non-oil trade balance and the provision of basic infrastructure aimed at boosting real sector activities in the industrial, trade and construction sectors so as to actualize the country's desire for economic diversification.

prince C emeh

Nigeria, one of the emerging economies in the world, had her GDP rebased in 2013, making her the largest economy in Africa. As this new ranking was being celebrated, Nigeria slipped into recession. This paper, entitled, 'Nigeria's Economic Recession Exit: a Multi –Dimensional Approach' aims at unraveling the mysteries behind Nigeria's plunge into economic recession and government's intervention that quickly resulted in the recession exit. Being an exploratory research, the paper relies so much on authentic secondary data. The paper blames the economic recession on gross neglect of agriculture, over dependence on crude oil, poor coordination of fiscal and monetary policies, poor economic planning, corruption and mismanagement of borrowed funds. Acknowledging government's efforts in exiting recession, the paper recommends that the economy be diversified by further reengineering other strategic sectors of the economy, like agriculture, mining, communication, manufacturing, among others, which have shown great improvements in the recent assessment. Fighting corruption with all sincerity, developing and implementing workable economic policies, fighting insurgency and coordinating fiscal and monetary policies, among others, are various approaches to reviving Nigeria's economy, which is still recuperating. Undoubtedly, Nigeria has exited recession, but the impact of this exit on the citizens is not generally felt now as factors that culminated into this crisis took some ages to take place. The paper, therefore, concludes by enjoining the government, as well as all stakeholders, both within and in the diaspora to work collaboratively to ensure that a robust and viable Nigerian economy is built.

Francesco Aiello , Graziella Bonanno , Alessia Via , Aiello Francesco

This paper focuses on trade elasticities by analysing the case of China, France, Germany, Italy, Japan, UK, and the USA over the period 1990-2012. While the empirical setting mainly refers to panel data techniques for non-stationary data, the VECM model complements the analysis at single-country level. After having shown that long-run relationships are stable to any structural break, it is found that exports and imports are price inelastic for most of the countries in the sample. Furthermore, exports and imports are determined by domestic and foreign income, with asymmetric income elasticities. This helps to explain why global trade imbalances are persistent

SSRN Electronic Journal

Luis Molina

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Managerial economics

Managerial economics: strategies for business optimization.

What is managerial economics?

Managerial economics refers to the way the economic tools and concepts, theories and methodologies are applied to provide solutions to business in solving its practical problems. To put it simply, managerial economics means the amalgamation of the theories of economy and management. A manager with a good knowledge of managerial economics has a strong decision-making skill. Managerial economics is also called as business economics sometimes. It is that branch of economics, which makes use of microeconomic analysis to the methods of a decision in business and other units of management. Managerial economics takes a cue from the quantitative techniques that include calculus, correlation, and regression analysis. The only unifying aspect that goes through managerial economics is the effort to enhance decision-making in business especially if the business has some scarcity or constraints.

This effort is put through using mathematical programming, game theory, operations research and computational methods of other types. Managerial economics as a subject has materialized into a fully-fledged subject only in recent years. The rising unpredictability and variability in business have compelled the business managers to worry about uncovering the more practical ways of regulating an abusive environmental change. These problems caught the attention of the academicians across the globe who then came up with the idea of managerial economics. The subject became popular during the 1950s in the United States after Joel Dean published his immensely popular book titled Managerial Economics in the year 1951. Different economists have provided different definitions of managerial economics. As Brigham and Pappar define, managerial economics involves the function of the theories and methodology of economic into the practice of business administration.

What are the concepts of managerial economics?

Managerial economics has several concepts that make it a unique subject and an essential subject as well for business managers.

The concept of increment –

Although incremental reasoning is easy to explain, the concept is difficult to apply. In the views of T.J. Coyne, incremental concept of managerial economics includes approximating the influence of the alternatives to decisions on the total revenue and cost yielding from differences in price procedures, products, and investments. Incremental analysis has two fundamental concepts at its heart including incremental cost and revenue. While the incremental cost means the change in the cost due to a decision taken, incremental revenue refers to the change seen in the total revenue owing to the decision taken.

Time perspective concept –

In the field of economics, people often distinguish between the long-run and the short-run. Managerial economics states that this distinguishing factor is based on the rate at which the decisions are made or could be made and the variations in the production factors rather than on a fixed period. Short-run is referred to as the time during which, the managers are able to bring variations to certain factors barring others. In contrast to this, the long-run is the period during which all the factors could be varied. To provide an instance, with the help of increased raw materials and labor, the increased output could be achieved in the short-run.

Discounting principle concept –

The discounting principle states that managers discount the future profit because of the uncertainty associated with it. however, this concern is wrong because even when there is no uncertainty, it is essential to discount the future profit in order to turn them into equal as the present-day profit. A strong example of the discounting principle could be given as a person is offered 1000 dollars as a gift in the present day or a year after. It is obvious that the person would choose the first option although there is the absence of uncertainty that she or he will not receive the gift after a year. The reason for the individual choosing the first option is that in the present era where the interest rate is anything but zero, there is a possibility to invest 1000 dollars at the interest rate of the market and collect interest from the principle.

How is managerial economics useful to an engineer?

Apart from benefitting the business managers, managerial economics has advanced to benefit the engineers as well. it is evident that each engineer has to evolve and at some point in life, the chances of evolving cease. Economics is a beneficial subject for every decision-maker and engineers too have to make crucial decisions in their careers. Business economics or managerial economics should be easy for an engineer because it involves many subjects that are taught in engineering as well. In fact, concepts such as linear programming, operations research and statistics and probability are taught more elaborately in engineering. However, it is important to note that engineers at the testing, developing and designing levels do not have anything to do with managerial economics. For other engineers, having a good knowledge of managerial economics would greatly help in valuing the subject. Engineering yielding too much cost in building something is not good engineering. In order to be able to become a good engineer who has good knowledge about the ways to manage cost and prices while providing engineering solutions, one must have a stronghold in managerial economics.

What is differential cost in managerial economics?

In managerial economics, the differential cost is the incremental cost, which finds out the total relevant cost amongst two alternatives. In general, these alternatives include two distinct levels of activity, make or buy amongst others. Differential cost is the additional cost that seems to incur when one alternative is opted over the other. In simpler terms, managers compare two options to find out the total costs of the two and to know the difference between the total costs of the two options. The change that comes up after finding the difference between the total costs of the two options in the revenues is known as incremental or differential revenue. Differential cost analysis takes place in order to make crucial decisions related to making or buying, making changes in the activity level, adding any new product, making changes in the product mix exporting orders and so on. In the differential cost analysis, the users take into consideration only the relevant costs.

Costs, which have been acquired in the past already are considered not relevant. This is also known as a fixed cost. Future costs are considered relevant because these costs are variable. Joel Dean explains that managerial economists always look for future costs because important management decisions are made using forecasts of the future costs. Forecasting of cost is significant especially to control expenditure. It is further important to learn about the income statements in the future, decisions related to capital investment, pricing, dropping and developing old and new products respectively. It is also important to note that the differential cost analysis is taken into consideration only to make management decisions and bears no relevance to bookkeeping or accounting.

Role And Importance Of Managerial Economics (Step-by-Step )

Role of managerial economics –.

The first important role of managerial economics is to enhance the decision-making efficiency in business in order to increase profit.

The second role of managerial economics is to study the economic patter at the macro-level to analyze the significance of the subject in an organization and the functioning of an organization.

Third, managerial economics examines the way the changing environment brings in profit for the organization in the perfect way.

Fourth, managerial economics helps in making good decisions when it comes to choosing an alternative that could reduce cost.

Fifth, managerial economics plays a crucial role of to help in making investment decisions for the individual investors as well as for the corporations.

Sixth, it helps the business companies in deciding the strategies of pricing as well as deciding the correct pricing levels to be given to their services and products.

Sixth, managerial economics helps in the decision-making related to internal working of a company like price changes, plans of investment, and types of services to be given, inputs utilized and so on.

Seventh, managerial economics plays the role of analyzing the changes that take place in indicators showing macroeconomics including population, business cycles, national income and their probable influence on the company’s working.

Importance of managerial economics –

Managerial economics is vital in analyzing the managerial policies. Organizations have certain policies especially operational policies that tend to produce no return and are of no use to the organization as well. These policies also play no role in altering the market conditions as well. Managerial economics helps in making crucial evaluations and that too in crucial time in order to solve upcoming obstacles before those harm the organization.

Managerial economics is important also because it helps the business recognize its strengths and weaknesses. it helps the business identify where it excels as well as where it lags behind. With the help of managerial economics, managers could ensure certain activities, which could influence the development of business.

What is the advantage and disadvantage of managerial economics?

Advantages of managerial economics –.

Managerial economics helps in evaluating the past policies to decide whether these policies are suitable for the business or do this need to be improved. It happens sometimes that the policies introduced and executed by the business are outdated and hold no relevance in the market that keep on changing. Hence, policy evaluation becomes vital to find better solution to the problem.

As an advantage, managerial economics assists the managers to identify the economic strengths and weaknesses, which could impact the company.

One of the other advantages if managerial economics is that is helps in establishing a policy of decision, which aligns with the operational standards of the company. Every company comprises distinct operational standards along with different regulations and policies made to suit the type of company.

Managerial economics is advantageous because it helps to identify the costs to be as competent as it could be.

Disadvantages of managerial economics –

Managerial economics concentrates on analysis of the management based on the cost accounting and financial data. Hence, the dependability of this data bases on the information accuracy of financial accounting.

Analysis of the data depends on the past information and thus, if the company plans to bring in new schemes and the situations change, relying on past information would be disadvantageous.

Managerial economics encourages individual manager’s personal preferences that could affect the final decision largely.

Managerial economics has the disadvantage of being very expensive as a process for any business. A company would commonly need to employ more than just one manager to make sure the functioning is smooth.

One of the most visible disadvantages of managerial economics is its newness. Therefore, many experts believe that it might be ambiguous in some situations.

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Mco-021 india’s foreign trade and investment solved assignment 2024.

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