Managerial Economics Essay

There are quite a few differences between Economics and Managerial Economics. Managerial Economics is micro in character while Economics is both micro and macro in character. Economics is both positive and normative science but the Managerial Economics is essentially normative in nature. Under Economics we study only the economic aspect of the problems but under Managerial Economics we have to study both the economic and non-economic aspects of the problems. Those are just a few distinct differences amongst many others. Economics is defined as the study of goods and services; the study of the production, distribution, and consumption of goods and services while Managerial Economics is a study of application of managerial skills in economics. The field of economics is broken down into two distinct areas of study: microeconomics and macroeconomics. Microeconomics looks at the smaller picture and focuses more on basic theories of supply and demand and how individual businesses decide how much of something to produce and how much to charge for it. Macroeconomics, on the other hand, looks at the big picture (hence â€Å"macro†). It focuses on the national economy as a whole and provides a basic knowledge of how things work in the business world. Microeconomics/ Macroeconomics and Managerial Economics have plenty in common. They all overlap in some form or fashion. Managerial economics is applied theory. Much of managerial economics applies the theories set forth in microeconomic theory. The relationship between the Microeconomics and the Macroeconomics are based on the result of choices made by each household and firms and some models of macroeconomics especially while originating the collective of production and consumption levels among both the branches of economics.