MANAGERIAL ECONOMICS – ESSENTIAL ACTIONS AND CONNECTIONS
A common definition of economics is that it is the study of the processes of production, distribution and consumption of goods and services. Another definition refers to the analysis of choices related to the use of limited resources. The first definition suggests that the economy encompasses an...
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| Format: | Article |
| Language: | English |
| Published: |
Academica Brâncuşi
2025-02-01
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| Series: | Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie |
| Subjects: | |
| Online Access: | https://www.utgjiu.ro/revista/ec/pdf/2025-01/28_Vaduva_C.pdf |
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| Summary: | A common definition of economics is that it is the study of the processes of production, distribution and
consumption of goods and services. Another definition refers to the analysis of choices related to the use of limited
resources. The first definition suggests that the economy encompasses any type of business, non-profit organization or
administrative entity. The second definition emphasizes that economics is central to the activities of managers in these
organizations. The objective of managerial economics is to provide an economic vocabulary and reasoning to support
improved management decision-making. Most readers are probably familiar with two distinct perspectives on the study
of economics: microeconomics and macroeconomics. Microeconomics focuses on the analysis of phenomena related to
goods and services from the point of view of individual decision-making entities such as households and companies. On
the other hand, macroeconomics examines the same phenomena at an aggregate level, for example, total consumption
and production in a given region.
Microeconomics and macroeconomics both have their importance. Microeconomic analysis is crucial to
understanding the behavior of individual entities in an economy. However, to understand the complex interactions
between numerous households and firms, it would be too complicated to rely only on descriptions of individual units.
The macroeconomic perspective provides tools and theories that make it easier to understand the overall behavior of
an economy. The purpose of managerial economics is to use economic principles to optimize managerial decisions in
an organization, which makes most of the content of this discipline oriented towards microeconomic aspects. However,
given that managers must take into account the context in which they operate, which also includes the general
economy, knowing how to interpret and forecast macroeconomic indicators becomes essential for an informed
managerial decision. |
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| ISSN: | 1844-7007 2344-3685 |