NAGA VIEW ADVENTIST COLLEGE,

INC.,
Panicuason, Naga City

C.Y 2020-2021
FIRST SEMESTER

MODULE

INTRODUCTION TO MANAGERIAL
ECONOMICS

NOVA JOY N. VALENZUELA MBA

DESIGNER
 COURSE DESCRIPTION
Managerial Economics (also called business economics) is essentially concerned with the
economic decisions of business managers. it is a branch of economics that applies microeconomic
analysis to specific business decisions, hence also considered as applied economics for it applies
solving problem of the firm which relates to choices and allocation of resources. this a branch of
which serves as a link between abstract theory and managerial practice which is based on economic
analysis for identifying problems, organizing information and evaluating alternative that involves
analysis of allocation of the resources available to a firm or a unit of management among the
activities. They shall integrate the Adventist perspective of stewardship. The design of the module
is aligned to the outcome of the course. Module 1. Will help the student understand the nature of
managerial economics. Module 2 will help the student identify types of managerial economics.
Module 3 will help student focus on the principle of managerial economics. Finally, Module 4 will
immerse students to the scope of managerial economics.

MODULE 1 : NATURE OF MANAGERIAL ECONOMICS

Learning Outcome and Module Introduction

Module 1. Will help you focus your understanding on how managers use the nature of managerial
economics principles and stewardship in the nature of managerial economics relevant to decision-
making as managers. The module will cover the meaning and nature of managerial economics. Art and
Science, Micro Economics, Uses Macro Economics, Multi-disciplinary, Prescriptive / Normative
Discipline, Pragmatic, and Management oriented are all the characteristics of managerial economics
that module 1 will take consideration. Finally, the general goal of the module is an exciting
learning for you!

Essential
understanding.
STEWARDSHIP IS important
Essential question:
nature of managerial What is stewardship in
economics managerial economics?
WARM UP DRILL : MY EMOJI TODAY
INSTRUCTION: check the dialogue box of the emoji that correspond your answer in the question:
HOW DO YOU FIND INTRO TO MANAGERIAL ECONOMICS AS A COURSE?

EXCITED HAPPY ANGRY SAD

Before digging deep to the understanding of the module, please fill the Map of conceptual change
below : the STATUS-LIKE-SHARE chart. The chart will assess your understanding before
you engage in the module, and after you have engaged in the process of knowledge
acquisition, practice activities for understanding, and performance task of the module.

STATUS-LIKE-SHARE
INSTRUCTION: Answer the question in green ribbon below by filling-up the STATUS column on
what you know, and LIKE column on what you want to know. Leave the SHARE column blank unless
you are told to do so.

LIKE SHARE
STATUS
(What I want to know ) (What i Learned )
(What I know)

_________________ _______________ _______________

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What is the meaning and nature_______
of managerial
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economics?
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 Lesson 1. Meaning of Managerial Economics

Introduction
What is managerial economics? how is it different form micro economics?
Let us explore lesson 1 the meaning of managerial economics according to the different perspective
to help us decide which meaning is practical in our own managerial perspective. Do the close reading
activity to help you explore and acquire understanding of managerial economics

CLOSE READING
INSTRUCTION: the reading materials below can help you process information about meaning of
managerial economics, answer the question in the dialogue box to strengthen your comprehension
in the lesson.

READING MATERIAL NO. 1 what is managerial economics to you?

Managerial economics is a discipline which Managerial economics is a stream of management
deals with the application of economic theory to studies which emphasizes solving business problems
business management. It deals with the use of and decision-making by applying the theories and
economic concepts and principles of business principles of microeconomics and macroeconomics. It is
decision making. Formerly it was known a specialized stream dealing with the organization’s
as “Business Economics” but the term has internal issues by using various economic theories.
now been discarded in favour of Managerial Source : https://theinvestorsbook.com
Economics.
Source : https://theintactone.com
Brigham and
Poppas believe that
Therefore for me Managerial managerial
In the words of Hirschey economics is economics is "the
and Pappas, "Managerial ….____________________________________ application of
economics applies _______________________________________ economic theory and
economic theory and _______________________________________ methodology to
_______________________________________
methods to business and business
_______________________________________
administrative decision _______________________________________ administration
making" _______________________________________ practice."
_______________________________________
_

In the words of TJ. Webster, "Managerial According to Mansfield, "Managerial

economics is the synthesis of microeconomic economics provides a link between
theory and quantitative methods to find optimal
economic theory and decision sciences
solutions to managerial decision-making
in the analysis of managerial decision
problems?
making?
 PERFORMACE TASK NO. 1. My Picture Definition

INSTRUCTION: paste 2 pictures with their captions that shows meaning of

managerial economics

ACTIVITY WORKSHEET NO. 1 My Picture Definition

INSTRUCTION: take at least 5 pictures in your community that shows meaning of managerial
economics. write a short description of each picture , and explain your work below

________________________ ________________________ ________________________

_______________________ _______________________ _______________________

________________________ ________________________
_______________________ _______________________

Explanation:
_____________________________________________
_____________________________________________
_____________________________________________
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Lesson 2. NATURE OF MANAGERIAL ECONOMICS

Introduction
lesson 1 helped you set forth the practical meaning of managerial economics as guided by the
different perspectives, lesson 2 will lead your understanding of the nature and important concepts
of managerial economics. do the close reading activity to broaden your understanding of the
lesson and answer the questions in the dialogue box to firm up your comprehension.

CLOSE READING
INSTRUCTION: the reading materials below can help you process information about the nature of
managerial economics, answer the question in the dialogue box to strengthen your comprehension
in the lesson.
Reading material no. 2: Nature of Managerial Economics –
Source : https://theintactone.com

Nature of Managerial Economics:

The primary function of management executive in a business organization is decision making and
forward planning.
Decision making and forward planning go hand in hand with each other. Decision making means the
process of selecting one action from two or more alternative courses of action. Forward planning means
establishing plans for the future to carry out the decision so taken.
The problem of choice arises because resources at the disposal of a business unit (land, labour, capital,
and managerial capacity) are limited and the firm has to make the most profitable use of these
resources.
The decision-making function is that of the business executive, he takes the decision which will ensure
the most efficient means of attaining a desired objective, say profit maximisation. After taking the
decision about the particular output, pricing, capital, raw-materials and power etc., are prepared.
Forward planning and decision-making thus go on at the same time.
A business manager’s task is made difficult by the uncertainty which surrounds business decision-
making. Nobody can predict the future course of business conditions. He prepares the best possible
plans for the future depending on past experience and future outlook and yet he has to go on revising
his plans in the light of new experience to minimise the failure. Managers are thus engaged in a
continuous process of decision-making through an uncertain future and the overall problem confronting
them is one of adjusting to uncertainty.
In fulfilling the function of decision-making in an uncertainty framework, economic theory can be,
pressed into service with considerable advantage as it deals with a number of concepts and principles
which can be used to solve or at least throw some light upon the problems of business management.
E.g are profit, demand, cost, pricing, production, competition, business cycles, national income etc. The
way economic analysis can be used towards solving business problems, constitutes the subject-matter
of Managerial Economics.
Thus in brief we can say that Managerial Economics is both a science and an art.
 So what is the nature of managerial economics according to the article accessed at
https://theintactone.com?
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________________________________________________________________________________
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Reading material no. 3: Nature of Managerial Economics –

Source : https://theinvestorsbook.com

Nature of Managerial Economics:

So what is the nature of managerial economics according to the diagram

above
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CONTINUATION… nature of managerial economics accessed at
https://theinvestorsbook.com
.
To know more about managerial economics, we must know about its various
characteristics. Let us read about the nature of this concept in the following points:

Art and Science: Managerial economics requires a lot of logical thinking and creative skills for decision
making or problem-solving. It is also considered to be a stream of science by some economist claiming
that it involves the application of different economic principles, techniques and methods, to solve
business problems.
Micro Economics: In managerial economics, managers generally deal with the problems related to a
particular organization instead of the whole economy. Therefore it is considered to be a part of
microeconomics.
Uses Macro Economics: A business functions in an external environment, i.e. it serves the market,
which is a part of the economy as a whole.
Therefore, it is essential for managers to analyses the different factors of macroeconomics such as
market conditions, economic reforms, government policies, etc. and their impact on the organization.
Multi-disciplinary: It uses many tools and principles belonging to various disciplines such as
accounting, finance, statistics, mathematics, production, operation research, human
resource, marketing, etc.
Prescriptive / Normative Discipline: It aims at goal achievement and deals with practical situations
or problems by implementing corrective measures.
Management Oriented: It acts as a tool in the hands of managers to deal with business-related
problems and uncertainties appropriately. It also provides for goal establishment, policy formulation
and effective decision making.
Pragmatic: It is a practical and logical approach towards the day to day business problems.

Why is managerial economics

considered an art?
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________________________________
________________________________
________________________________
________________________________
________________________________
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What particular instance can you relate the
Management Orientedness of
managerial economics in your
experience?
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READING MATERIAL NO. 4 : WHAT IS ECONOMIC VALUE MANAGEMENT?
Source https://www.thevaluealliance.com

Economic Value Management is a governance approach that is based on stewardship,

and that yields economic, value creating results.
"Economic Value Management is an integrated approach to managing any organization, one
that is based on the principle of stewardship (and the inexorable consequences of failed
stewardship)."
All three words, economic, value and management speak to the concept of stewardship and
to its consequences. (Definitions come from Webster’s Collegiate and the Oxford English
Dictionary.)
Stewardship is defined as the “conducting, supervising or managing of something, especially
the careful and responsible management of something entrusted to one’s care." "The
responsible use of resources, especially money, time, and talents.”
Economic implies not accounting or record keeping, but rather means a process “marked by
careful, prudent use of resources”, “yielding advantageous returns or results”.
Value is defined as something “held in high esteem or appreciation”, “having worth”,
something that is “valid, sound”. It is a “measurement of relative worth”, “the estimate in
which something is held related to principles or standards of what is valuable in life”, and “the
quality of a thing considered in respect of its power and validity for a specified purpose or
effect”.
Management is defined as “judicious use of means to accomplish an end”, “the application of
skill or care in the conduct of an enterprise”, “the exercise of executive, administrative and
supervisory direction”, and “the taking of control of the course of affairs by one’s direction.”
It is “the fulfillment of duties,” “handled or directed with a degree of skill”, “treated with care”,
“carried on successfully” “to achieve one’s purpose”.

What is stewardship in managerial

economics
perspective?_________________________
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What does the bible says about
stewardship
?_________________________________
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 PERFORMACE TASK NO. 2. Imaginary Manager
INSTRUCTION: imagine yourself as manager of a company or firm who
understand the meaning and nature of managerial economics. Make a collage
picturing how you are as a manager of a company or firm

ACTIVITY WORKSHEET NO. 2 : MY IMAGINARY MANAGER

PASTE COLLAGE

DESCRIPTION:
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COLLAGE RUBRIC
Criteria Raw Student Teacher Final
score score score score
1.creativity 5
2. content (see instruction) 10
3. presentation appearance 5
4. overall 5
TOTAL 25
MODULE ENDER

What is the meaning and nature of managerial

economics ?

To answer this question , go back to STATUS-

LIKE-SHARE corner of the module to fill
the SHARE box

2 THINGS I HAVE LEARNED ABOUT the meaning and nature of managerial

economics
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________
Lets review how far you have learned from the module. Fill in the dialogue box with your
answer .

stewardship in managerial economics is

________________________________________
Essential question: ________________________________________
What is stewardship in ________________________________________
managerial economics ? ________________________________________
________________________________________
________________________________________
________________________________________
________________

MY EMOJI NOW
INSTRUCTION: check the dialogue box of the emoji that correspond your answer in the question :
HOW DO YOU FIND OPERATION MANAGEMENT AS A COURSE ?

EXCITED ANGRY SAD

HAPPY