Managerial Economics RAS-501
EHU-501 : Engineering & Managerial Economics LTP 310 Unit-I Introduction of Engineering Economics and Demand Analysis: Meaning and nature of Economics, Relation between science, engineering, technology and economics; Meaning of Demand, Determinants of Demand, Shifts in demand, Law of Demand, Price Elasticity of Demand &Types, Income Elasticity, Cross price Elasticity, Determinants of Elasticity, uses and importance of elasticity. Unit-II Concept of Supply: Law of Supply, Factors affecting Supply, Elasticity of supply. Demand Forecasting: Introduction, Meaning and Forecasting, Methods or Techniques of Demand Forecasting, Criteria for Good Demand Forecasting, Demand Forecasting for a New Product Unit-III Cost Analysis- Introduction, Types of Costs, Cost-Output Relationship: Cost Function, Cost-Output Relationships in the Short Run, and Cost-Output Relationships in the Long Run; Short run and long run, Break- Even Analysis; Production functions: laws of variable proportions, law of returns; Economies of scale: Internal and external Unit-IV Market Structure: Market Structure Perfect Competition, Imperfect competition – Monopolistic, Oligopoly, duopoly sorbent features of price determination and various market conditions Unit-V Nature and characteristics of Indian economy, concepts of LPG, elementary concepts of National Income, Inflation and Business Cycles ,Concept of N.I. and Measurement., Meaning of Inflation, Types and causes , Phases of business cycle .Investment decisions for boosting economy(National income and per capital income) Reference Books 1. Koutsoyiannis A : Modern Microeconomics, ELBS. 2. Managerial Economics for Engineering : Prof. D.N. Kakkar 3. Managerial Economics : D.N. Dwivedi 4. Managerial Economics : Maheshwari.
INTRODUCTION: What is Economics? It is a simple question to which no simple answer can be given. Modern economics originated in 1776 when Adam Smith published his classic, An enquiry in to the Nature and Causes of Wealth of Nations. So he is rightly called the founder- father – of modern Economics. L.M.Fraser has classified the definitions of economics into Type A and Type B. Type A definitions are related to wealth and material welfare and Type B to the scarcity of means. Wealth and Welfare Definitions Economics: A Science of Wealth Adam Smith defined economics as “the science of wealth”. Adam Smith defined it as the “nature and causes of wealth of nations,” whereby it “proposes to enrich both the people and the sovereign.” Among his followers, J.B.Say in France defined economics as “the study of the laws which governs wealth:” whereas to F.A.Walker in America, “Economics in that body of knowledge which relates to wealth.” By wealth means not only gold and silver but also all kinds of other goods- houses and public buildings, furniture, ships, workshops, tools and machines in use at time of production of goods. Economics, which is described as the “queen of social sciences”, can not be confined to wealth earning and wealth consuming activities only. Wealth has its importance, but it can not be the end of all human activities. Economics: Science of Material Welfare (Marshall’s Definition) It was, however, the neo classical school led by Alfred Marshall which gave economics a respectable place among social sciences. Marshall laid emphasis on man and his welfare. Wealth was regarded as the source of human welfare, not an end in itself but a means to an end. According to Marshall, “Political economy or Economics is the study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of material requisites of well being. Thus it is on the one side a study of wealth; and on the other, and more important side, a part of the study of man.” Its Criticisms Robbins in his Essay on the Nature and Significance of Economic Science finds fault with Cannan’s enunciation of the welfare conception of economics on the following grounds. 1. Distinction between Material and Non material Things Faulty. 2. Economics not concerned with material welfare. 3. Contradiction 4. Concept of Economic welfare Vague. 5. Economics not a Social Science but a Human Science. 6. Welfare Definition & Classificatory and Not Analytical.