Managerial Economics and Fundamental Concepts Flashcards

Vocabulary flashcards covering core management functions, fundamental economic definitions and concepts, resource categories, and managerial economics.

Management

The process of working with people and resources to accomplish organizational goals (Bateman and Snell, 2007).

Effectiveness

Achieving results, making the right decision, and successfully carrying it out to achieve organizational goals; doing the right things.

Efficiency

The use of minimal resources to produce a desired volume of output; doing things right.

Planning

Identifying goals for future organizational performance and deciding the tasks and use of resources needed to attain them.

Organizing

The process of delegating and coordinating tasks and allocating resources to achieve objectives.

Leading

The process of influencing employees to work toward achieving objectives, creating a shared culture and values, communicating goals, and infusing employees with the desire to perform at a high level.

Controlling

The process of establishing and implementing mechanisms to ensure that objectives are achieved.

Oikonomia

The Greek word meaning 'management of a household', from which the word economics is derived.

Adam Smith

The Father of Modern Economics and author of 'An Inquiry into the Nature and Causes of The Wealth of Nations'.

Economics (Mankiw, 2015)

The study of how society manages its scarce resources.

Economics (General Definition)

A social science that deals with the effective and efficient allocation and utilization of scarce resources to bring maximum satisfaction to the unlimited wants and needs of man.

Economics as a Science

The field of study in which laws and principles are products of a long series of observations and experimentations.

Economics as a Social Science

The study of human behavior in dealing with societal problems, such as scarcity.

Allocation

How a resource is assigned or distributed.

Utilization

How resources are used after allocation.

Scarcity

The limited nature of society's resources; the fundamental economic problem of infinite (unlimited) human needs and wants in a world of finite (limited) resources.

Trade-off

Sacrificing one thing to obtain another.

Opportunity Cost

The value of what is foregone in order to obtain something else.

Needs

Basic requirements for survival.

Wants

Desires that are not absolutely or necessarily essential for survival.

Natural Resources

Raw materials supplied by nature.

Human Resources

People who work to produce goods and services.

Man-made Resources

Tools, equipment, and buildings used to produce goods and services.

Personal Resources

Time and skills used to satisfy our wants.

Managerial Economics

The discipline that applies economic concepts and decision science methodology to solve managerial decision problems in both profit and non-profit sectors.