Scope Of Managerial Economics Essay

Nature Scope of Managerial Economics

The economists says Economics is a study of production ,distribution and consumption of wealth in society, Its basic function is to study how human activity at individuals, households, firms and national level to maximize their gains from their limited resources and opportunities. People have limited number of needs and wants which must be satisfied such as food, clothing, shelter and other stated needs. Some of them are material needs, psychological needs, and emotional needs. However, no one would choose to live at the level of basic human needs if they want to enjoy a better standard of living. This is because human wants (desire for the consumption of goods and services) are unlimited. Every individual has their own tastes and preferences, it doesn’t matter whether a person belongs to which social class, and he or she wants always something more. Therefore the basic economic problem is that the resources are limited but wants are unlimited which forces us to make choices. Economics is the study of this allocation of resources, the choices that are made by economic brokers. According to Adam Smith, the Father of Economics, defined economics as the study of nature and uses of national wealth

There are different types of economies as follows it may be household economy, local

Every one need to know how economics can help us to understand what goes on in the world and how it can be used as a practical tool for decision making. Managers and Board of Directors of large corporate bodies, small companies, nonprofit organizations etc., cannot succeed in business without a clear understanding of how market forces create both opportunities and constraints for business enterprises. It is the key aspects for both human behavior and analysis of environment in which a business firm