MANAGERIAL ECONOMICS

Carl Ceasar F. Talungon

Professor-In-Charge
TOPICS FOR THE DAY!
1. COURSE ORIENTATION
1.1. UM’s Vision, Mission & Values
1.2. Grading System
1.3. Do’s and Don’ts
(Policy Guidelines)
1.4. Reference Textbooks
1.5. Background of the Professor
 Program Educational
Objectives

The University of Mindanao BSBA graduates will:

1. Utilize problem solving and rational decision making
capacity in micro and macro environment.
2. Participate in the community involvement using knowledge
and aptitude.
3. Contribute to the realization of ethical business objectives
through research and feasibility study.
4. Communicate effectively in various context.
 Student Outcomes

Upon completion of the program, the University of Mindanao

BSBA students will:
1. Demonstrate the values and skills of rational decision
making, analytical thinking, quality of work, fairness,
transparency, accountability, hard work, honesty, patience,
diligence, innovativeness or risk taking
 Course Outcome

Upon completion of the program, the University of Mindanao

BSBA students will:
1. Apply the concepts of microeconomics to understand a
business and solve managerial problems.
2. Explain the basic forces governing the operation of business
and asses the consequences of decisions on
3. Analyze the implication of various elasticities of consumer
demand for pricing and location decision and develop
long-run strategies to increase firm value.
 Grading System
Assessment Method Weight
1. Examination
1.1. Exams (1st to 3rd) 30%
1.2. Final Compre Exam 30%
2. Class Participation
2.1. Quizzes 10%
2.2. Assignments 5%
2.3. Recitation 10%
2.4. Case Study/ Bus. Plan 15%
TOTAL 100%
Do’s and Don’ts
(Policy Guidelines)
 Every attendance/ presence is
counted and “appreciated”.
 Validated identification cards
(IDs) are a must to be wore.
 During exams, all forms of
cheating is strictly prohibited and
reprehensible. Any form of
dishonesty shall be dealt
accordingly.
 Do’s and Don’ts
(Policy Guidelines)

 Validated permits are required

during the exams. NO PERMIT, NO
EXAM.
 During the course of discussion and
the exam, cellular phones and
other gadgets are requested to be
in a silent mode and be placed
inside the bags.
 Proper dress code is to be
observed.
 Base 15 grading policy is observed.
REFERENCE
TEXTBOOKS:
Any related books related to
macroeconomics will do.
However, the following
references are prescribe:
1. Thomas, Christopher R. (2013)
Managerial economics:
foundations of business
analysis and strategy 11th
edition. New York, NY:
McGraw-Hill Irwin
2. Wilkinson, Nick. Managerial
Economics: A Problem Solving
Approach
 Background of the
Professor:
CARL CEASAR FERNANDEZ TALUNGON
1. BS IN ECONOMICS (USeP, 2014)
2. GD IN ECONOMICS (6 UNITS, USeP)
3. MS IN ECONOMICS ( CAR,UM)
4. Former College Instructor:
 University of Southern Mindanao
(June 2014- May 2016)
 University of Southeastern
Philippines (Aug 2016- May 2018)
Brief Review of a
Manager and
Economics:
Concepts, and
Definition
What is a Manager?
- a person who directs (physical or human)
resources to achieve set goals.
- The above definition includes all individuals
who:
- (1) direct the efforts of others, including those
who delegate tasks within an organization such
as firm, family, or an organization (POSDICON);
- (2) purchase inputs to be used in the
production of goods and services
- (3) are in charge of making other decisions
What is Economics?
Economics
- A field of social science that deals with efficient
and effective allocation of limited resources such
that human wants will be satisfied.
- The only social science that is quantitative in
nature
- A social science concerned with the generation,
distribution and consumption of goods and services
with the aim of maximizing the welfare of people

SOURCE: Case and Fair, 2015. Principles of Economics

Branches of Economics?
 Microeconomics examines the behavior of
individual decision-making units—business
firms and households.
 Macroeconomics deals with the economy as
a whole; it examines the behavior of
economic aggregates such as aggregate
income, consumption, investment, and the
overall level of prices.

SOURCE: Case and Fair, 2015. Principles of

Economics
Basic Questions of
Economics?
 What goods and services to produce?
 How will such goods and services be
produced?
 How much to produce?
 For whom to produce?
SOURCE: Case and Fair, 2015. Principles of
Economics
Basic Terms in Economics?
Opportunity Cost – the benefit of the next best
alternative which had been forgone or
sacrificed due to the decision made
Utility – refers to the level of satisfaction
obtained while consuming goods and services
Marginality – the additional output from
additional input used
Law of Diminishing Return – a law which states
that when one input is fixed and the other is
variable, then output or satisfaction at some
point will decline then becomes negative
CIRCULAR FLOW DIAGRAM
Components of Circular
Flow?
1. HOUSEHOLDS
2. FIRMS
3. GOVERNMENT
4. MARKET FOR GOODS AND SERVICES
5. MARKET FOR FACTORS OF PRODUCTION
6. FINANCIAL MARKETS
7. REST OF THE WORLD

SOURCE: Case and Fair, 2015. Principles of Economics

 a social unit consisting of a person living alone or a group
of persons who sleep in the same housing unit and have
a common arrangement in the preparation and

HOUSEHOLD consumption of food.

NB. Family and household are two different terms. Family is defined as a
group of persons usually living together and composed of the head and
other persons related to the head by blood, marriage or adoption.

SOURCE: Philippine Statistics Authority

 FIRM
 Entities that
employ factors of
production (land,
labor, capital
and technology)
to produce
goods or services
for consuming
units. Consuming
units can be the
households,
government, and
among others.
GOVERNMENT
 A group of people that
governs a community or unit.
It sets and administers public
policy and exercises
executive, political and
sovereign power through
customs, institutions, and
laws within a state. A
government can be
classified into many types--
democracy, republic,
monarchy, aristocracy, and
dictatorship are just a few.

Source: business dictionary

FINANCIAL
INTERMEDIARIES

Entities where
trading of
securities
including equities,
bonds, currencies
and derivatives
occurs.
Source: Investopedia
 REST OF THE
WORLD
 is used to
represent
collectively all of
the other countries
of the world (or all
other countries for
which data are
available)
Source: dictionarycentral
MARKET ARENAS IN THE ECONOMY
MARKET ARENAS
Households, firms, the government, and
the rest of the world all interact in three
different market arenas:
1. Goods-and-services market
2. Labor market
3. Money (financial) market

SOURCE: Case and Fair, 2015. Principles of

Economics
The Three Market Arenas
Households and the government
purchase goods and services
(demand) from firms in the
goods-and services market, and
firms supply to the goods and
services market.
In the labor market, firms and
government purchase
(demand) labor from households
(supply).
The Three Market Arenas

 In the money market—sometimes

called the financial market—
households purchase stocks and
bonds from firms.
 Households supply funds to this market
in the expectation of earning income,
and also demand (borrow) funds from
this market.
 Firms, government, and the rest of the
world also engage in borrowing and
lending, coordinated by financial
institutions.
Financial Instruments
Treasury bonds, notes, and
bills are promissory notes
issued by the government
when it borrows money.
Corporate bonds are
promissory notes issued by
corporations when they
borrow money.
 Financial Instruments
Shares of stock are financial
instruments that give to the holder
a share in the firm’s ownership
and therefore the right to share in
the firm’s profits.
Dividends are the portion of a
corporation’s profits that the firm
pays out each period to its
shareholders.
CIRCULAR FLOW DIAGRAM
WHAT IS MANAGERIAL
ECONOMICS???
MANAGERIAL ECONOMICS
MANAGERIAL ECONOMICS
MANAGERIAL ECONOMICS
 MANAGERIAL ECONOMICS: Its
Relationship to Other Disciplines
 MANAGERIAL ECONOMICS: Its
Relationship to Other Disciplines
 MANAGERIAL ECONOMICS: Its
Relationship to Other Disciplines
 MANAGERIAL ECONOMICS: Its
Relationship to Economic Theory

 Theory of Firm
 Theory of Consumer Behavior
 Production and Cost Theory
 Price Theory
 Market Structure
 MANAGERIAL ECONOMICS: Its
Relationship to Business Function

 Production and Operations

 Marketing
 Finance and Accounting
 Human Resources
THANK YOU
FOR
LISTENING!!!
Where the telescope ends, the
microscope begins. Which of the
two has the grander view?
~ VICTOR HUGO