Economics is the social science that analyzes the production, distribution, and consumption of goods and services. A focus of the subject is how economic agents behave or interact and how economies work. A given economy is the result of a process that involves its technological evolution, history and social organization, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions.
The world economic events and how they affect the domestic economy
.The economic activity, and of the interactions …show more content…
United Soviet Socialists Republic) and China. This system could be known as socialist or communist.
2. Market Economy
A market economy involves all major business decisions being made by only individuals and private firms. This system is designed so that the consumer demands certain products, therefore attempting to solve the economic problem. The major factor in a market economy is supply and demand.
3. Mixed Economy
A mixed economy is a mixture of both market economies and centrally planned economies. There are two extremes within this system; they are the American system and the communist system. In the American system the economy is still dominated by supply and demand. Whereas in the communist system, such as China, private firms have enter the economy but the government still controls much of trade and have control of answering the economic problem.
“Managerial economics is concerned with application of economic concepts and economic analysis to the problems of formulating rational managerial decision.” - Edwin Mansfield
Managerial economics refers to the use of economic theory (microeconomics and macroeconomics) and the tools of analysis of decision science (mathematical economics and econometrics) to examine how an organization can achieve its aims and objectives most efficiently.
The most frequent applications of managerial economics techniques are as follows:
• Risk analysis: Various models are used to quantify