MANAGERIAL ECONOMICS

& RELATION WITH MACRO

ECONOMICS &MICRO
ECONOMICS
MANAGERIAL ECONOMICS.
The origin of the term economics lies in the Greek
words OIKON and NOMOS means “law of
households".
DEFINATION
D.C.HAYUE---- “Fundamental academic subjects
which seeks to understand and to analysis the problem
of business decision taking”.
SAVAGES AND SMALL---- “To make a productive
enterprise out of human and material resources”.
BRIGHAM AND PAPPAS---- “The application of
theory and methodology to business administration
practices”.
 Managerial economics

Macro-economics Microeconomics
MACRO-ECONOMICS.

 The analysis of economic system as a whole is a

macro economics .It concerns aggregates an average
of entire economy.
EXAMPLE-
 National income.
 Output employment.
 Investment.
 Saving.
IMPORTANCE OF MACRO-ECONOMICS.
The study of macro economics pointed out the
fallacies involved in applying the micro economics
conclusion to macro economics problem.
Macro economic analysis gives a complete picture of
the economy as a whole.
The macro economics has increased the utility of
economics.
Macro economics can be used for the development for
the micro economics.
LIMITATION.
Macro economic conclusions are always expressed in
terms of averages.
It is always necessary to add and find out the
aggregates of individual units.
All macro economic trends do not have a similar
influence on all economic fields.
Macro economic variables are important from the
point of policy, but at a times their analysis is more
important.
MICRO-ECONOMICS
 Micro economics studys the behaviour of small
indivisual factor. prof. lerner puts it micro economics
look at the economy through a microscope.
EXAMPLE-
Price of a tea.
Rent.
Interest and profits.
IMPORTANCE OF MICRO-ECONOMIST.
Allocation of resources.
The distrubation on national income.
Consideration of welfare.
Importance in the applied field of economics.
The terminology and tools of economics analysis.
Limitations.
Micro-economics analysis always thinks of individual
factors of production.
Micro-economics result are always based on certain
assumption.
Some of the problems faced by an economy are just
beyond the scope of micro economics.