DR. FILEMON C.

AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS

Golden Gate Subd., Talon III, Las Piñas City

Course Code and Title: ACED 4 – MANAGERIAL ECONOMICS

Lesson Number 1

Topic:

I. INTRODUCTION
 DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City

II. OBJECTIVES:
At the end of the lesson, the student should be able to:
1. Understand the management and economic concepts that interacts in the study of Managerial
Economics;
2. Explains the interaction of management and economic concepts in the study of Managerial
Economics; and
3. Defines management and economic concepts used in the study of Managerial Economics.

III. PRE-ASSESSMENT:
Modified TRUE or FALSE. Write TRUE if the statement is true. If the statement is false, write the correct
answer of the underlined word.
____________1. Managerial Economics is the study of decisions made by people and businesses
regarding the allocation of resources, and prices at which they trade goods and services
____________2. Microeconomics studies individuals and business decisions, while macroeconomics
analyzes the decisions made by countries and governments.
____________3. Macroeconomics focuses on supply and demand, and other forces that determine price
levels, making it a bottom-up approach.
____________4. Microeconomics takes a top-down approach and looks at the economy as a whole,
trying to determine its course and nature.
____________5. Investors can use microeconomics in their investment decisions.
 DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City

IV. PRESENTATION

Management

 the optimal way to accomplish tasks and achieve goals, using Planning, Organizing, Staffing,
Directing and Controlling functions or processes (dictionary.com)
 directing and controlling a group of people or an organization to reach a goal
 deployment and manipulation of human resources, financial resources, technological
resources, and natural resources. (Wikipedia.com)

Economics

 is a social science concerned with the production, distribution, and consumption of goods and
services.
 It studies how individuals, businesses, governments, and nations make choices about how to
allocate resources.
 Economics focuses on the actions of human beings, based on assumptions that humans act
with rational behavior, seeking the most optimal level of benefit or utility.
 The building blocks of economics are the studies of labor and trade.
 Since there are many possible applications of human labor and many different ways to acquire
resources, it is the task of economics to determine which methods yield the best results.
(Investopedia.com)
DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City
 DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City

ROLES

FUNCTIONS
 DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City

RESPONSIBILITIES

Responsibility # 1. To make a reasonable profit on

capital employed:

Responsibility # 2. He must make successful

forecasts by making in depth study of the internal
and external factors:

Responsibility # 3. He must inform the management

of all the economic trends:

Responsibility # 4. He must establish and maintain

 DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City

STEPS IN DECISION MAKING

 DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City

THE GOAL OF THE FIRM

PROFIT

V. SUMMARY
In this course students learn how to use microeconomic principles as tools for analyzing the
economic forces that shape the internal and external environment of the business firm and as
rules for managerial decision-making that enhances the economic performance of the firm.
(Managerial Economics Principles, 2012)

Microeconomics and macroeconomics each have their merits. The microeconomic approach is
essential for understanding the behavior of atomic entities in an economy. However,
 DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City

understanding the systematic interaction of the many households and businesses would be too
complex to derive from descriptions of the individual units. The macroeconomic approach
provides measures and theories to understand the overall systematic behavior of an economy.
(Wilkinson, 2005)

Since the purpose of managerial economics is to apply economics for the improvement of
managerial decisions in an organization, most of the subject material in managerial economics
has a microeconomic focus. However, since managers must consider the state of their
environment in making decisions and the environment includes the overall economy, an
understanding of how to interpret and forecast macroeconomic measures is useful in making
managerial decisions. (Wilkinson, 2005)

VI. APPLICATION

TAAL VOLCANO BULLETIN 17 February 2021 08:00 A.M.

In the past 24-hour period, the Taal Volcano Network recorded sixty-nine (69) tremor episodes having
durations of one (1) to five (5) minutes. Activity in the Main Crater consisted of weak emission of white
steam-laden plumes from fumaroles that rose 20 meters high. Temperature highs of 77.1°C and pH of
1.59 were last measured from the Main Crater Lake on 12 February 2021. Ground deformation
parameters from continuous electronic tilt on Volcano Island record a slight deflation around the Main
Crater since October 2020 but overall, very slow and steady inflation of the Taal region has been recorded
by continuous GPS data after the eruption.

Alert Level 1 (Abnormal) is maintained over Taal Volcano. DOST-PHIVOLCS reminds the public that at
Alert Level 1, sudden steam-driven or phreatic explosions, volcanic earthquakes, minor ashfall, and lethal
accumulations or expulsions of volcanic gas can occur and threaten areas within the Taal Volcano Island
(TVI). DOST-PHIVOLCS strongly recommends that entry into TVI, Taal’s Permanent Danger Zone or PDZ,
especially the vicinities of the Main Crater and the Daang Kastila fissure, must remain strictly prohibited.
Local government units are advised to continuously assess previously evacuated barangays around Taal
Lake for damages and road accessibilities and to strengthen preparedness, contingency, and
communication measures in case of renewed unrest. People are also advised to observe precautions due
 DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City

to ground displacement across fissures, possible ashfall, and minor earthquakes. Civil aviation
authorities must advise pilots to avoid flying close to the volcano as airborne ash and ballistic fragments
from sudden explosions and wind-remobilized ash may pose hazards to aircraft. DOST-PHIVOLCS is
closely monitoring Taal Volcano’s activity and any new significant development will be immediately
communicated to all stakeholders.

DOST-PHIVOLCS

Answer the questions briefly:

1. Is there a problem to be addressed?
2. Is there a solution or solutions to the problem, in terms of strategies or courses of action that can
be taken?
3. What objective or objectives can be defined for these strategies?
4. What constraints exist in terms of operating any strategies?
5. How can we evaluate these strategies in terms of costs and benefits, particularly when these
involve life and health?

VII. EVALUATION

Matching Column A with Column B. Write the letter and the answer.

Column A Column B

1. It studies how individuals, businesses, governments, and a. Microeconomics

nations make choices about how to allocate resources. b. Labor and Trade
2. The building blocks of Economics c. Macroeconomics
3. Directing and controlling a group of people or an organization d. Profit
to reach a goal e. Steps in Decision Making
4. Application of Economic Concepts, Theories and Analytical f. Responsibilities of
Tools to find solutions for managerial problems. Managerial Economist
5. Economic Analysis of the Industry g. Specific Decisions
6. To make reasonable profit on capital employed h. Managerial Economics
7. Forecast the consequences i. Functions of Managerial
8. Goal of the Firm Economist
9. Pricing and competitive strategies j. Management
10. Provides measures and theories to understand the overall k. Economics
systematic behavior of an economy.
 DR. FILEMON C. AGUILAR MEMORIAL COLLEGE OF LAS PIÑAS
Golden Gate Subd., Talon III, Las Piñas City

VIII. ASSIGNMENT

1. Explain the scope of Managerial Economics.

2. Explain the role of demand and supply in determining market equilibrium.
3. Differentiate Microeconomics vs. Macroeconomics.
4. How a government reacts to protect consumers when there is a shortage in supply of a staple
product which led to increase in prices?

IX. REFERENCES

Introduction to Microeconomics – AITS-TPT (2018). https://aits-tpt.edu.in/wp-

content/uploads/2018/08/Introduction-to-Managerial-Economics.pdf

Managerial Economics Principles (2012). Creative Commons by-nc-sa 3.0

http://creativecommons.org/licenses/by-nc-sa/ 3.0/

McGuigan, J. R., Moyer, R C., & Harris, F. H. deB. (2017). Managerial Economics Applications, Strategy
and Tactics, Cengage Learning

TAAL VOLCANO BULLETIN 17 February 2021 08:00 A.M.

Vmepd
https://www.phivolcs.dost.gov.ph/index.php/taal-volcano-bulletin-menu/11297-taal-volcano-
bulletin-17-february-2021-08-00-a-m

Wilkinson, N. (2005). Managerial Economics A Problem-Solving Approach, Cambridge University Press