IGCSE Economics Paper-2: Specimen Questions with Answers 24 - 24 of 100

Passage

Managerial Economics deals with practical business-problems relating to production, pricing, and sales.

Question 24 (3 of 5 Based on Passage)

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Show the relationship between economic problem and decision making.

Explanation

Managerial Economics Deals with Practical Business

  • problems relating to production, pricing, and sale. These problems are theoretically, analyzed by traditional economics.
  • Decision making is an art as well as science. Many managerial decisions are addressed in a routine manner. Rules of thumb or the tried and true decisions rules are, however invalidated by the changes in routine situations. Dynamic changes in business situations need that decision is to be addressed in proactive manner. In proactive decision making many alternatives must be explored; conditions and assumptions must review and structured in a perspective manner. Managerial economics helps in understanding of business and various economic aspects, economic jargons, tools, techniques, and tactics that will help the manager in the overall development as a great decision maker. He addresses the different dynamic situations in business that is critical and comprehensive.

  • In modern business it is the management which is crucial in determining the success of the business. Business prospers only when management is sound and pragmatic. Modern business involves huge investment and undertakes big risk.

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