Dairy Essay

1785 WordsFeb 26, 20148 Pages
Managerial Economics Defined • The application of economic theory and the tools of decision science to examine how an organization can achieve its aims or objectives most efficiently – applications of economic theory – quantitative methods – statistical methods – computational methods PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright © 2007 by Oxford University Press, Inc. Slide 1 PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright © 2007 by Oxford University Press, Inc. Slide 2 Economic Theories for Managers • Microeconomics – Study of the economic behavior individual decision-making units – Relevance to Managerial Economics of • Macroeconomics – Study of the total or aggregate level of output, income, employment, consumption, investment, and prices for the economy viewed as a whole PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright © 2007 by Oxford University Press, Inc. Slide 3 Decision Science Theories • Mathematical Economics – Expresses and analyzes economic models (i.e., economic theories) using the tools of mathematics • Econometrics – Uses statistical methods to estimate and test economic models using empirical data PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright © 2007 by Oxford University Press, Inc. Slide 4 Economic Methodology • Economic Models – Abstract from details (e.g., demand function from demand theory) – Focus on most important determinants of economic behavior – cause and effect • Evaluating Economic Models – A model is accepted if it predicts accurately and if the predictions follow logically from the assumptions PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright © 2007 by Oxford University Press, Inc. Slide 5 Decision-Making Process PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.

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