me session 1
TRANSCRIPT
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RobbinsDefinition
Lionel Robbins defined economics as
the science which studies human
behaviour as a relationshipbetween
endsand scarce meanswhich have
alternative uses
(Robbins,1935)
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Meaning of Economics
Economics is the social science that
studies the
behavior of individuals, households and
organizations (agents) when they
manage or use the scarce resources, to
achieve desired results (which have
alternative uses)
agents are assumed to act rationally.
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Rationality
To act rationally is to act objectively, keepingin view the ends and the means, theobjectives and constraints.
In the decision-making context, arational behaviour implies thefollowing:
First, all possible courses of action areknown.
SecondIy, you are able to separate these
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Rationality continues
Third- Divide all such options into two
categories - feasible and infeasible.
Finally assess the consequences.
Thus economic rationality is a preconditionfor attaining optimality in a given decision
environment.
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Why ME for PGDM students
Almost all business decisions, in one way or
the Other, relate to economic variables 'like
demand, price, supply, stock, input, output,
production, utility.
Managerial Economics, provides a tool
box to analyse economic problems and
helps managers to take optimumdecisions.
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A finance manager chooses the sources
and uses of funds. A production manager chooses the
product and input-output.
A personnel manager chooses the humanresource.
A sales manager chooses the market
segments.A purchase manager chooses the quality
of materials.
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Needs Eat, Dress, Move
Wants Cheeseburger, Branded, Car
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This Is Demand
Demand
Need/Want Buying Power Willing to pay
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Economic Activities
Actions that involve the production, distribution andconsumption of goods and services at all levels withina society.
"Human activities which are performed in exchangefor money or money's worth are called economicactivities."
In other words, economic activities are those efforts
which are undertaken by human beings to earnIncome, Money, Wealth for life and to securemaximum satisfaction of wants with limited andscarce means.
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Thanks
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