1. INTRODUCTION TO
MANAGERIAL ECONOMICS
UNIT I
REFERENCE:
MANAGERIAL ECONOMICS -DR. D.M MITHANI,

2. WHAT IS ECONOMICS?
 Root of the word ‘economics comes from Greek word
‘Oikonomia’ (management of household or
household rules).
 Economist’s dictionary of economics defines it as
“The study of production, distribution and
consumption of wealth in society’

3. WHAT IS ECONOMICS?
 Its basic function is to study how people- individuals,
households, firms and nations – maximize their
gains from their limited resources and opportunities.

4. Managerial Economics
 Definition:
 “Managerial Economics is concerned with the
application of economic concepts and economics to
the problems of formulation rational decision
making” – Mansfield
 “Managerial Economics … is the integration of
economic theory with business practice for the
purpose of facilitating decision making and
forward planning by management”

5. Nature of Managerial Economics
 Micro Economic
 Normative Micro Economics (what should do)
 Pragmatic
 Managerial Economics takes the help of macro
economics

6. Scope of Managerial Economics
I. What to produce?
II. How to produce?
III. For whom to produce?

7. Relationship to….
1. Production management (strategic decisions,
operating decisions and control decisions).
2. Marketing management(marketing strategy
decisions, pricing decisions, value chain analysis,
cost analysis.)
3. Finance management(financial decisions)

8. Relationship to….
4. Personnel management(strategic human
resource, planning models, HR-performance
management )
5. Operation research (advanced analytical
methods to make better economic and business
decisions).

9. Role & Responsibilities Of Managerial
Economist