MANAGERIAL

ECONOMICS:
Nature | Scope | Practice

by John C. Peralta | MBA

1 | BA 212
Nature
& Scope
 Definition
It is a consolidation of economic studies
and theories and the use of abstracts with
business practices to ease decision-making
and future planning by the management.
It basically assist the managers of the firm
in attaining a rational solution to obstacles
faced by the firm’s current portfolio
standing.

Its Core Concept:

Microeconomic Theory
Study

Managerial Economics is of great

help in price analysis, production
analysis, capital budgeting, risk
analysis, and determination of demand.

Managerial economics uses both

economic theories as well as
Econometrics for rational managerial
decision-making.
 In Dept

It makes use of economic theory and

concepts and helps establish logical
managerial decisions. It makes use of
statistical and analytical tools to assess
economic theories in solving practical
business problems.
 Core
Concepts
Choices & Decisions :
DEMANDs?!!
Demand Estimates
Demand Forecasts
Demand Analysis
Market Demand
All Things Demand…
 PURPOSEFUL
BEHAVIOR
Human Actions

Managing = Human
Intervention
Q1: What can we
do out of this
limited resources
onhand?

Scarcity
Means: Land

Natural
Resources
Limited
Supply Capital
(Resources) .

Money
Potentially

Scarce! Time
Utility
FEEDBACK

USAGE =
CONSUMPTION
Trade - offs:

…the opportunity cost of

a particular choice ,
which is the loss of the
most preferred
alternative given up...
 Marginal Analysis

Last minute
recourse or
choice of
action
Efficiency & Productivity:
 Branches:
MICROECONOMICS MACROECONOMICS

• Households • GDP • Unemployment

• Individuals / • Stock Market • Rate

• Consumers
• Value • Currencies
• Firms/
• Businesses • Trade Deficits

• Inflation
 Markets:
Categories:
• Capital
Market
Order of Priority:
• Goods and 1. Products Market = Most
Services | 2. Labor Market = Next
Products 3. Capital Market = Least ~ Why???
Market = it is a subject of
another field of study
• Labor *(Finance | Financial Mgt)
Market
 Model
Business Models = Theoretical Construct = Abstract Representatio

INPUT • Wages
• Inflation
• Salaries • Profits
• GDP • Profitability
• Wages • Unemployment
• Product Price
• Inflation
OUTPUT
Model

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the lastest tools and

statistics
Relevant
Usage
Practical
Applications
Economy

PRINCIPLES

SCIENCE YOU

Mgrl. ART
Economics

ORGs.
Economic
Forecasts
The Future of
Managerial
Economics

Automation vs
Human
Intervention
 As we all note, the “traditional approach” basically
applied neoclassical microeconomics, production theory
in particular — has been augmented by new
developments: Artificial Intelligence (AI Features) of
computing machines, Apps that gauge different
behavioral patterns through constant, unconscious
choices, and 24/7 endless, tireless, and low-maintenance
robotic entities able to replace the jobs of humans.
Have a Nice Day, Everyone!