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Nature, scope and
methods of managerial
economics
Outline
Objectives page 3
1.1 Introduction 4
Case study 1.1: Global Warming 4
1.2 Definition and relationships with other disciplines 7
Definition 7
Relationship with economic theory 8
Relationship with decision sciences 10
Relationship with business functions 10
1.3 Elements of managerial economics 11
Subject areas and relationships 11
Presentation of topics 11
1.4 Methods 12
Scientific theories 12
Learning economics 14
Case study 1.2: Import quotas on Japanese cars 15
Tools of analysis: demand and supply 16
Case study 1.3: Equal prize money in tennis 17
Summary 18
Review questions 19
Notes 19
Objectives
1 To introduce and define managerial economics.
2 To outline the types of issue which are addressed by managerial economics.
3 To explain the difference between positive and normative economics.
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