Managerial Economics and Business Cycles Flashcards

Vocabulary flashcards covering the definitions of managerial economics, microeconomics, macroeconomics, PESTEL analysis components, and business cycle phases.

Managerial economics

The application of economic principles and methods to business decision-making, bridging the gap between the theory of economics and managerial practice.

Microeconomics

The social science that studies the implications of incentives and decisions, specifically how those affect the utilization and distribution of resources.

Macroeconomics

A branch of economics that focuses on the behavior and performance of an economy as a whole, examining large-scale factors such as output, income, growth, inflation, unemployment, and GDP.

Marketing for finance

The process of using data-driven marketing tactics to reach and influence consumers of financial services.

Production Theory

A microeconomic theory that studies the impact of production-related decisions, such as capital and labor requirements, to ensure high productivity with limited resources.

Investment Theory

A theory used by companies to diligently plan capital investment to ensure resource utilization and generate higher returns.

Demand Theory

A theory where managers analyze consumer needs, requirements, attitudes, and responses toward products or services to ensure consumer satisfaction.

Market Structure Pricing Theory

A theory involving competitive price determination based on production cost, market demand, and marketing cost.

Profit Management

An approach focused on cost and revenue with the ultimate aim of profit maximization.

PESTEL analysis

A tool used to deal with external challenges by analyzing Political, Economic, Social, Technological, Environmental, and Legal components.

Political (P) factor

A PESTEL component that studies how governance style, political unrest, and foreign collaboration affect private sector companies.

Economic (E) factor

A PESTEL component where business profitability depends on government policies, tax reforms, GDP, and the nation's economic stability.

Social (S) factor

Factors including societal values, beliefs, attitudes, consumer awareness, employment conditions, literacy rate, and trade unions that mold businesses.

Technological (T) factor

A PESTEL component focusing on technology that enhances the production and distribution of goods or services.

Environmental (E) factor

A component involving sustainable practices, pollution curtailing, waste management, and the preservation of water and natural resources.

Legal (L) factor

National laws pertaining to consumer rights, labor laws, health and safety laws, product labeling regulations, and advertising guidelines.

Economics (Traditional)

The study of the need and availability of resources for enhancing the production, distribution, and consumption of commodities, focusing on the allocation of limited resources.

Business cycle

The rise and fall of business activities within an industry that occur irregularly but repetitively, including periods of profitability and loss.

Growth Trend Line

A representation of the constant growth an economy is expected to have, despite real-world periodic fluctuations in national output.

Expansion

A phase of the business cycle remarked as economic growth where a nation's GDP moves upward or recovers with time.

Peak

The point in the business cycle where the national output expands to its highest level before contracting.

Trough

The lowest point a national economy reaches during the contraction phase of a business cycle.