Friday, July 19, 2019

NATURE AND SCOPE OF MANAGERIAL ECONOMICS FOR UGC NET COMMERCE AND MANAGEMENT


  • NTA-UGC NET
    MANAGERIAL ECONOMICS 1
    NATURE AND SCOPE WITH IMPORTANT MCQ
    MEANING OF BUSINESS ECONOMICS/MANAGERIAL ECONOMICS
  1. BUSINESS ECONOMICS IS ALSO CALLED MANAGERIAL ECONOMICS IS THE APPLICATION OF ECONOMIC THEORY AND METHODOLOGY TO BUSINESS. DECISION MAKING MEANS THE PROCESS OF SELECTING ONE OUT OF ALTERNATIVE AS THE RESOURCES ARE LIMITED.
  2. ALSO CALLED APPLIED ECONOMICS
  3. A SCIENTIFIC FORMULATION OF THE BUSINESS PROBLEM AND FINDING ITS OPTIMAL SOLUTIONS REQUIRE THAT THE BUSINESS FIRM IS EQUIPPED WITH A RATIONAL METHODOLOGY AND APPROPRIATE TOOLS.
  4. REFERS TO THE INTEGRATION OF ECONOMIC THEORY WITH BUSINESS PRACTICES. THAT BRANCH OF ECONOMICS  WHICH SERVE AS LINK BETWEEN ABSTRACT THEORY AND MANAGERIAL PRACTICES.
  •  ECONOMICS AS A SCIENCE IS CONCERNED WITH THE PROBLEM OF ALLOCATING RESOURCES AMONG COMPETING ENDS. ECONOMICS PROVIDE THE TOOLS AND CONCEPTS WHICH EXPLAIN THE BEHAVIOR PATTERN OF ECONOMIC VARIABLES SUCH AS DEMAND,SUPPLY,PRICE AND COMPETITION.
  •  MEANING OF MANAGERIAL: THE TERM MGMT REFERS TO THE FUNCTIONS OF PLANNING. MAIN FUNCTION OF MGMT ARE DECISION MAKING AND FORWARD PLANNING
  • MANAGERIAL ECONOMICS IS THE APPLICATION OF ECONOMIC THEORY AND QUANTITATIVE METHODS TO MANAGERIAL MGMT DECISION MAKING

  • MEANING OF BUSINESS(MANAGERIAL )
    ECONOMICS
  • BUSINESS ECONOMICS IS THAT PART OF ECONOMIC THEORY WHICH DEALS WITH THE APPLICATION OF ECONOMIC TOOLS AND CONCEPTS TO THE SOLUTION OF BUSINESS PROBLEMS OR THE PROBLEMS OF RESOURCE ALLOCATION AMONG THE COMPETING ENDS.
  • IMPORTANT POINTS:
  1. CONCERNED WITH DECISION MAKING OF ECONOMICS NATURE. IDENTIFICATION OF CHOICES AND ALLOCATION OF SCARCE RESOURCES
  2. GOAL ORIENTED AND PRESCRIPTIVE: DEALS WITH THE DECISIONS SHOULD BE MADE BY MANAGERS TO ACHIEVE THE ORGANIZATIONAL GOALS
  3. IT IS PRAGMATIC. CONCERNED WITH ANALYTICAL TOOLS WHICH ARE USEFUL FOR IMPROVING DECISION MAKING
  • MATCH THE FOLLOWING
  1. MALCON E MC NAIR AND RICHARD
  2. JOEL DEAN
  3. SPENCER AND SIEGELMAN
  4. EDWIN
·         STATEMENTS
  1. MANAGERIAL ECONOMICS CONSISTS OF THE USE OF ECONOMIC MODEL OF THOUGH TO ANALYSE BUSINESS SITUATIONS.
  2. MANAGEMENT ECONOMICS ATTEMPTS TO BRIDGE THE GAP BETWEEN PURELY ANALYTICAL PROBLEMS THAT INTRIGUE MANY ECONOMIC THEORIST AND THE PROBLEM OF POLICIES THAT MANAGEMENT MUST FACE.
  3. THE PURPOSE OF MANAGERIAL ECONOMICS IS TO SHOW HOW ECONOMIC ANALYSIS CAN BE USED IN THE FORMULATING BUSINESS POLICIES
  4. MANAGERIAL ECONOMICS IS THE INTEGRATION OF ECONOMIC THEORY WITH BUSINESS PRACTICE FOR THE PURPOSE OF FACILITATING DECISION MAKING AND FORWARD PLANNING BY MANAGEMENT

  • DEFINITION
  1. EDWIN MANSFIELD,” MANAGERIAL ECONOMICS IS CONCERNED WITH THE WAYS IN WHICH MANAGER SHOULD MAKE DECISIONS IN ORDER TO MAXIMIZE THE EFFECTIVENESS OR PERFORMANCE OF THE ORGANISATIONS THEY MANAGE.
  2. JOEL DEAN,” THE PURPOSE OF MANAGERIAL ECONOMICS IS TO SHOW HOW ECONOMIC ANALYSIS CAN BE USED IN FORMULATING MANAGERIAL POLICIES.
  3. MC NAIR AND MERIAM SAYS THAT MANAGERIAL ( MANAGEMENT) ECONOMICS IS THE USE OF ECONOMIC MODES OF THOUGHT TO ANALYSE MANAGERIAL SITUATIONS
  4. SPENCER AND SIEGELMAN,” MANAGERIAL ECONOMICS IS THE INTEGRATION OF ECONOMIC THEORY WITH MANAGERIAL PRACTICES FOR THE PURPOSE OF FACILITATING DECISION MAKING AND FORWARD PLANNING BY MGMT


  1. BRIGHAM AND PAPPAS,” MANAGERIAL ECONOMICS IS THE APPLICATION OF ECONOMIC THEORY  AND METHODOLOGY TO MANAGERIAL ADMINISTRATIVE PRACTICES.
  2. PROF EVEN DOUGLAS,” MANAGERIAL ECONOMICS IS CONCERNED WITH THE APPLICATION OF ECONOMIC PRINCIPLES AND METHODOLOGIES TO THE DECISION MAKING AND FORWARD PLANNING BY THE MANAGEMENT.
  3. MANAGERIAL ECONOMICS IS THE DISCIPLINE WHICH DEALS WITH THE APPLICATION OF ECONOMIC THEORY.
  4. MANAGERIAL ECONOMICS REFERS TO THE APPLICATION OF ECONOMIC THEORY AND DECISION SCIENCE TOOLS TO FIND THE OPTIMAL SOLUTION TO MANAGERIAL DECISION MAKING
  • NATURE OF MANAGERIAL ECONOMICS
  •  
  • NATURE OF BUSINESS
    ( MANAGERIAL ECONOMICS    )
  • BUSINESS ECONOMICS
  1. CONCERNED WITH DECISION MAKING OF ECONOMIC NATURE
  2. GOAL ORIENTED AND PERSPECTIVE
  3. PRAGMATIC:CONCERNED WITH APPLICATION
  4. BOTH CONCEPTUAL AND METRICAL
  • FUNDAMENTAL NATURE OF BUSINESS ECONOMICS
  • ECONOMIC THEORY
  • MACRO ECONMICS : DEALS WITH AGGREGATE ECONOMIC CONCEPTS RELATING TO THE ENTIRE ECONOMY. PROVIDE THE FRAMEWORK IN WHICH THE FIRM OPERATES.
  1. FREE ENTERPRISE ECONOMY
  2. A RAPID TECHNOLOGICAL AND ECONOMIC CHANGES
  3. CYCLICAL FLUCTUATIONS
  4. MONETARY AND FISCAL POLICY

  • MICRO ECONOMICS:-
  1. DEALS WITH THE PROBLEMS OF INDIVIDUAL,FIRMS,INDUSTRY AND CONSUMER
  2. HELPS IN STUDYING WHAT IS GOING ON WITH IN THE FIRM
  3. HOW BEST TO USE THE LIMITED RESOURCES
  4. HOW TO BE TECHNICALLY AS WELL AS ECONOMICALLY EFFICIENT
  • IMPORTANT POINT
  1. THE CHIEF SOURCE OF CONCEPTS AND ANALYTICAL TOOLS IS MICRO ECONOMICS
  2. SOME OF THE POPULAR CONCEPTS :ELASTICITY OF DEMAND,MARGINAL COST,LONG TERM ECONOMIES AND DIS ECONOMIES,OPPORTUNITY COST,PRESENT VALUE AND MARKET STRUCTURES
  3. SOME OF THE WELL ACCEPTED MODEL : MONOPOLY PRICE,KINKY DEMAND MODEL,THE MODEL OF PRICE DISCRIMINATION AAND BEHAVIORAL AND MANAGERIAL MODEL
  4. SOME OF THE MICRO ECONOMICS SUCH AS INDIFFERENCE CURVE HAS NOT BEEN VERY POPULAR DUE TO LACK OF QUANTIFICATION


  • EXAMPLE
  1. MANAGEMENT DECISION PROBLEMS CAN BE SOLVED WITH THE APPLICATION OF ECONOMIC THEORY AND TOOLS OF DECISION SCIENCE
  2. ECONOMIC THEORY REFERS TO MICRO AND MACRO ECONOMICS AND DECISION SCIENCES INCLUDE THE TOOLS OF MATHEMATICAL ECONOMICS AND ECONOMETRIC WHICH ARE USED FOR DETERMINING THE OPTIMAL BEHAVIOR
3.     FOR EXAMPLE ECONOMIC THEORY POSTULATES THAT QUANTITY DEMANDED DEPENDS UPON THE PRICE OF X,INCOME AND PRICE OF RELATED GOODS. ASSUMING CONSTANT TASE WE CAN BUILD THIS MODEL
  1. QX=f(Px,Y,PC,PS)
  2. Px,Y,PC,PS      BY ESTIMATING THE VALUE AND USING REGRESSION ANALYSIS WE WILL KNOW WHAT IS THE IMPACT OF CHANGE WILL BE ON THE OUTPUT. 

  • POSITIVE VS NORMATIVE APPROACH
  • POSITIVE APPROACH:-WHAT IS,WAS WILL BE. POSITIVE ECONOMICS IS OF TWO TYPES DESCRIPTION AND THEORY, IT EXPLAINS THE SATE OF THE OPERATION OF THE FIRM
  • NORMATIVE APPROACH WHAT OUGHT TO
  • FUNDAMENTAL NATURE OF MANAGERIAL ECONOMICS
  • INTEGRATION OF ECONMIC THEORY AND BUSINESS PRACTICE
  1. UNDERSTAND THE ACTUAL BEHAVIOR OF THE BUSINESS
  2. ESTIMATE AND PREDICT THE ECONOMIC QUANTITIES AND RELATIONSHIP
  3. DECISION MAKING AND FORWARD PLANNING
  4. SIGNIFICANCE OF THE ENVIRONMENT
  • FEATURES OF MANAGERIAL ECONOMICS
  1. MANAGERIAL ECONOMICS IS MICRO ECONOMICS IN CHARACTER
  2. HELP OF MACRO ECONOMICS
  3. PRAGMATIC
  4. NORMATIVE
  5. CONCEPTUAL AND METRICAL
  • THEORY OF FIRM
  1. WISE CHOICES
  2. MULTIDISCIPLINARY
  • SCOPE OF BUSINESS ECONOMICS
  •  SCOPE IS VERY WIDE AS IT INVOLVES APPLICATION OF ECONOMIC CONCEPTS TO PROBLEMS WE FACE IN REALITY IN BUSINESS.
  •  DEALS WITH FOUR PROBLEMS IN BOTH DECISION MAKING AND FORWARD PLANNING:
  1. RESOURCE ALLOCATION FOR OPTIMAL RESULTS
  2. INVENTORY QUEUING PROBLEM
  3. PRICING PROBLEMS
  4. INVESTMENT PROBLEMS
  • SCOPE
    THEORY OF DEMAND ANALYSIS AND FORECASTING


  1. DEMAND DETERMINANTS
  2. DEMAND FORECASTING
  • DEMAND THEORY EXPLAINS THE CONSUMER BEHAVIOR
  1. HOW DO THE CONSUMER DECIDE TO BUY OR NOT
  2. QUANTITY
  3. BEHAVIOR OF CONSUMER WHEN THERE IS CHANGE IN THE PRICE,TASTES ETC
  4. THE KNOWLEDGE OF DEMAND THEORY CAN THEREFROM HELPFUL IN MAKING CHOICE FOR COMMODITY OF PRODUCTION
  5. DEMAND FORECASTING IS ESSENTIAL FOR MANAGERIAL PLANNING

  • THEORY OF PRODUCTIONS AND PRODUCTION DECISIONS

  • ALSO KNOWN AS THEORY OF FIRMS
  1. RELATIONSHIP BETWEEN INPUTS AND OUTPUTS
  2. RETURNS TO FACTOR IN SHORT PERIOD
  3. OPTIMUM SIZE OF THE PLANT,SIZE OF THE TOTAL OUTPUT AMOUNT OF CAPITAL AND LABOUR

  • ANALYSIS OF MARKET STRUCTURE AND PRICING THEORY
  1. PRICES ARE DETERMINED UNDER DIFFERENT MARKET CONDITIONS
  2. ROLE OF ADVERTISING
  3. HELPFUL IN DETERMINING THE PRICE POLICY OF THE FIRM AND PRICE THEORY AND PRODUCTION THEORY OPTIMUM SIZE OF THE FIRM
  • COST ANALYSIS
  1. DETERMINATION OF COST,METHODS OF ESTIMATING THE COST
  2. COST VOLUME PROFIT ANALYSIS
  3. COVERS COST CONCEPTS,CLASSIFICATION,COST OUTPUT RELATIONSHIPS,ECONOMIES AND DIS ECONOMIES AND PRODUCTION FUNCTION AND COST CONTROL
  • PROFIT ANALYSIS AND PROFIT MGMT
  1. CONDITIONS OF UNCERTAINTY
  2. DEMAND FOR THE PRODUCT AND INPUT PRICES ETC
  3. GUIDES THE MEASUREMENT AND MGMT OF PROFITS AND MAKING ALLOWANCES FOR THE RISK AND CALCULATING RETURN ON CAPITAL EMPLOYED
  • THEORY OF CAPITAL AND INVESTMENT DECISIONS
  1. CAPITAL IS THE FOUNDATION OF THE BUSINESS
  2. CHOICE OF INVESTMENT PROJECTS
  3. ASSESSING THE EFFICIENCY OF CAPITAL
  4. ALLOCATION OF CAPITAL
  5. CAPITAL BUDGETING ETC
  • CONTRIBUTE A GREAT DEAL IN INVESTMENT DECISION MAKING,CHOICE OF PROJECTS,MAINTAINING CAPITAL INTACT,CAPITAL BUDGETING
  • INVENTORY MGMT
  1. MGMT OF INVENTORY
  2. OPTIMUM INVESTMENT IN INVENTORY
  3. HELP IN USING SUCH METHODS WHICH ARE HELPFUL IN MINIMIZING THE INVENTORY COST
  • BUSINESS CYCLES
  • IMPORTANT MCQ
  • WHICH IS NOT THE  SUBJECT MATTER OF MANAGERIAL ECONOMICS
  1. ACCOUNTING THEORY
  2. PRICING DECISIONS,POLICIES AND PRACTICES
  3. CAPITAL MANAGEMENT
  4. PROFIT MANAGEMENT

  • WHICH ONE OF THE FOLLOWING STATEMENT IS TRUE
  1. BUSINESS DECISIONS CAN NOT BE TAKEN WITHOUT A SOUND KNOWLEDGE OF MACRO ECONOMIC THEORIES
  2. KNOWLEDGE OF ECONOMIC THEORY IS MISLEADING IN MAKING BUSINESS DECISIONS
  3. WITH THE HELP OF ECONOMIC THEORIES IT IS ALWAYS POSSIBLE TO PREDICT THE FUTURE ACCURATELY
  4. EVERY ECONOMIC THEORY IS BASED ON REALISTIC FACTS WHICH ARE COMMON TO ALL SOCIETIES

  • THE TERM MANAGERIAL ECONOMICS ALSO REFERS TO
  1. MANAGEMENT ACCOUNTING
  2. APPLIED ECONOMICS
  3. PRINCIPLE OF MANAGEMENT
  4. CONSUMER BEHAVIOR
  • WHICH OF THE FOLLOWING IS THE BEST DEFINITION OF MANAGERIAL ECONOMICS. MANAGERIAL ECONOMICS IS :
  1. DISTINCT FIELD OF ECONOMIC THEORY
  2. A FIELD THAT APPLIES ECONOMIC THEORY AND TOOLS OF DECISION SCIENCE
  3. A FIELD THAT COMBINES ECONOMIC THEORY AND MATHEMATICS
  4. NONE OF THE ABOVE
  • THE VALUE OF AN ECONOMIC THEORY IN PRACTICE IS DETERMINED BY :
  1. HOW ACCURATE THE ASSUMPTIONS ARE
  2. HOW WELL THE THEORY CAN BE REPRESENTED BY GRAPH
  3. HOW WELL THEORY CAN PREDICT OR EXPLAIN
  4. HOW PARSIMONIOUS THE MODEL IS
  • MANAGEMENT DECISION PROBLEMS ARE COMPRISED OF THREE ELEMENTS. WHICH OF THE FOLLOWING IS NOT ONE OF THEM
  1. PROFITABILITY
  2. ALTERNATIVES
  3. CONSTRAINS
  4. OBJECTIVES
  • WHICH OF THE FOLLOWING AREAS OF ECONOMIC THEORY IS THE SINGLE MOS IMPORTANT ELEMENT OF THE MANAGERIAL ECONOMICS
  1. MATHEMATICAL ECONOMIC
  2. ECONOMETRIC
  3. MACRO ECONOMICS
  4. MICRO ECONOMICS





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