1. Karthik-(04)
Swetha-(06)
Sandeep-(12)

2. Economics:- The term economics is derived from the Greek
word oikon and nomos,which mean ‘law of house holds’
It is also a study of choice- making behaviour of the
People.
For eg-Firm,Industry,Nation….
Managerial economics:- It is concerned with the application of
economic principles and methodologies to the decision making process
with the firm or organization.
-Douglas
It is the use of economic modes of thought to analyze business
situation
-Mc .Nair & Meriam

3. CHARACTERISTICS:-
Application of principles of Economics to solve managerial
problems.
Utilization of resources in a goal oriented manner.
Analysis of problems of decisions making.
Facilitating forward planning.
Analysis and decisions upon the economic issues underlying
the choice and allocation of resources.
Bridge between traditional economics and Business
Management .

4. Art or Science – Both: In regard to science economics deals with practical
aspects where as in arts specific solution to specific problem.
Micro Economics-It looks at smaller picture of the economy and it is the
study and behaviour of smaller economic units. It’s a non statistical
measurement
Operates against the backdrop of Macro economics-The word macro
indicates large which deals with the study of aggregates and it is statistically
measured.
Normative –Its reflects to people moral’s attitudes and based on valued
judgments.
Prescriptive actions –It shows a clear directions and instructions and they are
generally goal oriented.

5. Offers scope to evaluate each alternative : It evaluates each alternative in
the firm to get maximum profit.
Applied in nature/pragmatic: Models are built to reflect the real life in
complex business situation and these models are immense help for decision
making.
Interdisciplinary :Its nothing but the tools and techniques drawn from
different subjects.
Assumptions and limitations: Every concept is based on assumption and
as such their validity is not valid.

6. Demand Analysis –It helps to identify the various factors influencing the
demand for a firm’s product and thus provide guidelines to manipulating
demand.
Cost Analysis-Discovering economics costs and being able to measure
them for more effective profit planning, cost control and often for sound
pricing practices.
Production analysis-It mainly deals with different production functions
and their managerial uses.

7. Pricing Practices and Policies –It mainly deals with the price determination
in various firms and their strategies in pricing.
Profit Management –The important aspects covered under this area are
Nature and measurement of profit, profit planning and techniques…..
Capital Management-It relates to their capital investments its expenditure
and the main topics dealt are Cost of Capital, Rate of Return and selection of
projects.

8.  To make reasonable profits on capital
employed.
 Successful forecasts
 Knowledge of sources of Economic Information
 His status in the firm Assisting the business
planning process of the firm.
 Discovering new possible fields of business
endeavor and its cost-benefit analysis.
 Advising on prices, investment and capital
budgeting policies .
 Evaluation of capital budgeting etc.

9. Decision
making areas
Production Economic Study of Pricing and
Demand Investment Forecasting Economic
planning and related
Decision decision and Forward Environment
cost, revenue decisions
decision Planning