Managerial Economics Notes for Bharathiar university

Index


Unit – I ........................................................................................................................................................1
Managerial Economics: Nature and Scope ..................................................................................................3
Fundamental Economic Concepts................................................................................................................9
Consumer Behaviour .................................................................................................................................12
Cardinal Utility Analysis ...........................................................................................................................13
Ordinal Utility Analysis (Indifference Curve) ...........................................................................................21
Demand Estimation and Forecasting .........................................................................................................27
Unit – II .....................................................................................................................................................34
Theory of Production .......................................................................................................................................... 36
Isoquants ....................................................................................................................................................45
Theory of Costs ..........................................................................................................................................50
Behaviour of Firm under various market situations ..................................................................................63
Unit – III ...................................................................................................................................................79
Macro-Economics ......................................................................................................................................81
Circular Flow of Income ............................................................................................................................84
Multiplier ...................................................................................................................................................88
Accelerator .................................................................................................................................................93
Marginal Efficiency of Capital ..................................................................................................................95
Inflation ......................................................................................................................................................97
Economic Growth: Measurement and Determinants .................................................................................99
Unit – IV..................................................................................................................................................107
Budgets and Budgetary Deficits ..............................................................................................................109
Deficit Financing ....................................................................................................................................115
Public Debt Operations and Its Management ..........................................................................................118
Balance of Payment Management ...........................................................................................................120
Foreign Exchange Reserves .....................................................................................................................124
Business Cycles .......................................................................................................................................135

,
,Unit - I
Index
 Managerial Economics: Nature and Scope
1. Introduction
2. Nature of Managerial Economics
3. Scope of Managerial Economics
4. Significance of Managerial Economics
5. Relationship of Managerial Economics with other Disciplines
6. Role of Managerial Economics in Decision Making
 Fundamental Economic Concepts
1. The Incremental Concept
2. Time Perspective Concept
3. The Opportunity Cost Concept
4. The Equi-marginal Concept
5. The Discounting Concept
6. Risk and Uncertainty Concept
 Consumer Behaviour:
 Cardinal Utility Analysis
1. Meaning
2. Characteristic of Utility
3. Assumptions of Cardinal Utility Analysis
4. Concept of Utility
5. Laws of Utility analysis:
5.1. Law of Diminishing Marginal Utility
5.2. Law of Equi-Marginal Utility
 Ordinal Utility Analysis (Indifference Curve)
1. Meaning and Assumptions of the law
2. Marginal Rate of Substitution
3. Properties of Indifference Curve
4. Significance of Indifference Curve

, 2 Unit – I
 Demand Estimation and Forecasting
1. Meaning and Features of Demand Forecasting
2. Objectives/ Uses/ Purpose of Demand Forecasting
3. Methods of Demand Forecasting
4. Fundamentals of a Good Demand Forecasting Method

Objectives of the Unit
After going through this unit the students will be able to:
 Understand the meaning, definition, nature, scope and significance of Managerial Economics
 Explain the relationship of economics with other disciplines and as well as the role of economics
in managerial/business decision making
 Understand the fundamental concepts of economics
 Elucidate the theory of consumer behavior i.e. Cardinal Utility Analysis and Ordinal Utility
Analysis
 Understand the meaning, features, and objectives of demand forecasting
 Explicate the various methods of demand forecasting and carry out demand forecasting