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Micro Economics

Notes 9. “ Decision-making by management is truly economic in nature”. Justify

10. ‘Resources are limited whereas the human wants are unlimited’. Substantiate
11. “Managers have to study, both the micro and macro economic variables in order to take
optimal decisions”. Discuss
12. Following are the examples of typical economic decisions made by managers of a fi rm.
Determine whether each is an example of what, how, or for whom to produce.
(a) Should the company make its own spare parts or buy them from an outside
vendor?

(b) Should the company continue to service the equipment it sells or ask the customers
to use independent repair companies?
(c) Should a company expand its business to international markets or concentric in
domestic markets?
(d) Should the company replace its telephone operators with a computerised voice
messaging system?

(e) Should the company buy or lease the fleet of trucks that it uses to translate its
products to markets?
Answers: Self Assessment

1. social 2. Adam Smith

3. mankind 4. limited, unlimited
5. effi ciency 6. Queuing
7. price 8. Statistics
9. True 10. True
11. False 12. False

13. False 14. False
15. True 16. True

1.8 Further Readings

Books Atmanand, Managerial Economics, Excel Books

G.S. Maddala, Microeconomics: Theory and Application, Tata McGraw-Hill
Samuel Bowles, Microeconomics: Behavior, Institutions, and Evolution, Oxford
Jeffrey M. Perloff, Microeconomics, Pearson Education

Online links http://www.swlearning.com/economics/hirschey/managerial_econ/chap01.
pdf
http://www.referenceforbusiness.com/encyclopedia/Man-Mix/Managerial-
Economics.html
http://bilder.buecher.de/zusatz/14/14727/14727814_vorw_1.pdf

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