What is managerial economics?

Flashcards covering the key concepts from Lecture 1: Course Overview and Introduction.

What is economics?

The study of how agents allocate scarce resources and how those choices affect society.

What is managerial economics?

The application of economic principles to managerial decisions, focusing on microeconomic concepts to inform business strategy.

What is the goal of economics in this course?

To understand how prices and markets coordinate decisions under scarcity and to model behavior graphically and with simple math.

What are the preliminary concepts in this course?

Choices, scarcity, and trade-offs; resources such as money, time, capital, and labor are scarce.

What is a market in economics?

A collection of agents whose interactions determine the price p and quantity q of a product.

What market structures are covered?

Perfect competition, monopoly, monopolistic competition, and oligopoly.

Why do prices matter in economics?

Prices create incentives that influence behavior and outcomes in markets.

What is the COE price discovery mechanism?

Certificate of Entitlement used to allocate road space through price signals.

What is the difference between accounting costs and economic costs?

Accounting costs are explicit costs; economic costs include explicit costs plus implicit costs or opportunity costs.

What is an opportunity cost?

The value of the best alternative use of resources foregone by choosing another option.

What is a sunk cost?

A cost that has already been paid and cannot be recovered; not relevant for future decisions.

What is marginal thinking?

Assessing the effect of adding one more unit when making a decision.

What is an economic model?

A simplified representation of reality using graphs, logic, and basic math to analyze decisions.

What math is required for the course?

Basic algebra and calculus; no integration is required.

What is a function of multiple variables?

A function that maps several inputs to a single output; the function depends on more than one argument.

What does f'(x) denote?

The derivative of the function f with respect to x.

What are partial derivatives?

Derivatives of a multi-variable function with respect to one argument while holding others constant.