Chapter 1 Review Questions

1 Define managerial economics. What role does the managerial economists play in
the resource allocation problems of an organization.

2 Differentiate managerial economics from:

a. microeconomics
b. macroeconomics
c. economics for managers
d. economics for consumers
e. industrial economics

3 Try to make a review of the present economic environment. As a managerial

economists, relate your findings to the operations of :
a. Service organization
b. manufacturing
c. an agriculture -based company

4 There are various "stakeholders " in the business organization, e. g., consumers,
stockholders, creditors, distributors, and suppliers, the general public, etc. What are
their respective stakes in the company? How does the managerial economists strike
a happy balance between the multifarious and complex interests of these groups?

5 What is the difference between maximizing and satisficing behaviors? Cite

examples of how Filipino managers satisfice.

Answers
1.
Managerial economics is a flood of the executives contemplates that
underscores tackling business issues and dynamic by applying the
speculations and standards of microeconomics and macroeconomics. An
administrative market analyst's primary job is to improve the nature of
policymaking as it influences momentary activity and long reach arranging.
2.
a. Microeconomics is the study of what is likely to happen (tendencies) when
individuals make choices in response to changes in incentives, prices,
resources, and/or methods of production.
b. Macroeconomics is a branch of economics that studies how an overall
economy—the market systems that operate on a large scale—behaves.
c. Economics for managers is to present the fundamental ideas of
microeconomics and macroeconomics and then integrate them from a
managerial decision-making perspective in a framework.
d. Economics for consumers involves the study of choices and influences that
affect consumer activities.
e. Industrial Economics is the study of firms, industries, and markets. It looks at
firms of all sizes – from local corner shops to multinational giants such as SM.
3.
a. Service organizations took a heavy hit because of the pandemic. A lot of
businesses were forced to close because the government had to implement a
lockdown to lessen the spread of the virus.
b. Manufacturing also took a heavy hit because of the pandemic. Workers were
lessen to enforce social distancing and this could help lessen the spread of
the virus.
c. Agriculture also took a heavy tool especially the palay farmers. The
government’s implementations of importing rice are giving our farmers a
hard time to cope this pandemic. They are earning roughly P20 per hour and
it is not a sustainable way of living.

4.
Buyers are the ones who buy products and enterprises for individual use.
Investors are an individual, organization, or establishment that claims in any
event one portion of an organization's stock. an individual or organization to
whom cash is owed. Merchants are an operator who supplies products to
stores and different organizations that offer to shoppers. Providers are an
individual or association that gives something required, for example, an item
or administration. An employment of administrative financial specialist is to
purchase supplies at a sensible rate that the wholesalers are content with.
They pay the loan bosses at an early time. They ensure they have most
extreme benefits so the Stockholders would get an offer on the benefits. They
likewise ensure the items are modest and sensible for the purchasers.

5.
Maximizing behaviour picking some objective and then seeking to maximize
its value. Satisficing behaviour is an alternative business objective to
maximising profits. It means a business is making enough profit to keep
shareholders happy or it's sufficient for investors to maintain confidence in
the management they appoint. Filipino managers satisfice by making sure the
company gets enough profit. They make sure the company stays afloat and
continue a long time.