CRONASIA FOUNDATION COLLEGE, INC.

Andres-Dizon Building, Pioneer Avenue,

General Santos City, 9500
Tel. no. 083-554-6323 or 552-4051

Name: Billie B. Matchoca

Course/Year: BSAIS/3rd Yr

MANAGERIAL ECONOMICS
ASSIGNMENT #1
1. Define Economics.
Economics is an inevitable part of any business. All the business assumptions,
forecasting and investments are based on this one single concept.
2. What are the branches of economics?
Microeconomics – concerned with individual markets and small aspects of the
economy.
Macroeconomics – concerned with the whole aggregate economy. Issues such as
inflation, economic growth and trade.

3. What are the two types of scarcity?

Relative scarcity is where a good is naturally limited in supply. So, there is only a
finite number available. However, we define relative scarcity as being naturally
limited, but is also scarce relative to demand.
Absolute scarcity is where the supply of a good is naturally limited. In other words,
there is nothing humanly possible for us to increase supply. However, absolute
scarcity is where the number of goods cannot diminish. For example, we have an
absolute scarcity of 24 hours each day. This cannot be extended nor reduced.
4. Define managerial economics. What role those managerial economists play in the
resource allocation problems of an organization?
Managerial economics is a stream of management studies which emphasizes
solving business problems and decision-making by applying the theories and
principles of microeconomics and macroeconomics. It is a specialized stream
dealing with the organization’s internal issues by using various economic theories.
Managerial economist helps the management by using her analytical skills and
highly developed techniques in solving complex issues of successful decision-
making and future advanced planning, the field of operation ranging from resource
allocation to product pricing; from project planning to performance budgeting.
5. Differentiate managerial economics from:
a. microeconomics
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. Individual actors are often grouped
into microeconomic subgroups, such as buyers, sellers, and business owners.
 b. macroeconomics
Macroeconomics is the branch of economics that studies the behavior and
performance of an economy as a whole. It focuses on the aggregate changes
in the economy such as unemployment, growth rate, gross domestic product and
inflation.
c. economics for consumers
Consumer economics program focuses on the purchasing choices made in a
given economy. Students are taught to observe and
understand consumer buying patterns. Opportunities are available to learn
various research methods in order to predict price changes and buying
behaviors.
d. economics for managers
will enable you to drive critical business decisions. Explore how businesses
approach pricing strategy, evaluate market demand, and differentiate their
offerings, and how you can apply those learnings to compete in the marketplace
successfully.
e. industrial economics
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
WalMart or Tesco. And it considers a whole range of industries, such as
electricity generation, car production, and restaurants.
6. Try to make a review of the present economic environment. As a managerial
economist, relate your findings to the operation of:
a. service organization
A third-party organization (or segment of a third-party organization) that
provides services to user entities that are part of those entities' information
systems relevant to financial reporting.
b. a manufacturing
The processing of raw materials or parts into finished goods through the use of
tools, human labor, machinery, and chemical processing. ...
Efficient manufacturing techniques enable manufacturers to take advantage of
economies of scale, producing more units at a lower cost.
c. agriculture-based company
An enterprise engaged in the production, processing, marketing, distribution, or
exporting of agricultural products. The term includes any related business the
primary function of which is providing goods or services to
an agricultural enterprise.
7. How does the knowledge of industrial economics help government policy makers and
executives in the private sector in the formulation? Give a concrete example.
When analyzing decision making at the levels of the individual firm
and industry, Industrial Economics helps us understand such issues as: the
levels at which capacity, output, and prices are set; the extent that
products are differentiated from each other; how much firms invest in research
and development 
8. Differentiate positive from normative economics.
Normative economics focuses on the value of economic fairness, or what the
economy "should be" or "ought to be." While positive economics is based on fact
and cannot be approved or disapproved, normative economics is based on value
judgments
9. What is the difference between maximizing and satisfying behaviors? Cite an
example about how Filipino managers satisfice.
“Maximizing” means expending time and effort to ensure you've solved something as
best as possible. “Satisficing” means picking the first option that satisfies the
requirements. Prefer a faster decision to the best decision.
10. What is the difference between a “STAKEHOLDER” and a “STOCKHOLDER”?
The shareholder, again, is a person who owns shares of the company.
A stakeholder has a stake in the company. Therefore, shareholders are owners and
stakeholders are interested parties. ... The biggest difference between the two is that
shareholders focus on a return of their investment.