Tools of Managerial Economics Essay Example | Topics and Well Written Essays - 1000 words

Tools of Managerial Economics - Essay Example Competitive markets, Market power and imperfect markets are the three main areas of interest in managerial economics. Managerial economics underlies the basic factors which monitor the process of a manager - the external and internal factors. As the implies the internal factors lie in the purview of a manager and correspondingly microeconomics define the basic tenets of managerial economics. Thus managerial economics has a more limited scope - it is more application of microeconomics to managerial issues. Thus when we try to analyze a basically macroeconomic phenomenon, the fall of the Socialistic regime in Eastern Europe, we will be basically analyzing the forces which defined the characteristics of different markets in this market under several external forces, the most important being government intervention. Individuals are found to share common motivations that lead them to behave rationally in making economic choices - this is the foundation of managerial economics. This implies that an individual who, when faced the same choices at two different times, will behave in the same way during both the times (Varian 2005). The entire conceptual base is economics is built on the theory of Demand and Supply - the main pillars on which the subject stands. Thinking of the buying process as a contest, demand and supply are the forces which monitor and shape the strategies that the two sides adopt in the market. The aspect of nations it is demand and supply again which determine the level and efficiency in the macro levels of economic activity. The political and economic systems built by the communists in eastern Europe started on its route to collapse by 1973. A prime economic problem of allocation occurred - the planners in this socialist economy stressed on the allocation of a large share of its GNP to in armaments production and heavy industries. This investment, done at the cost of living, led to the immobilization of a large number of resources. Thus the U.S.S.R. was at one time leading the world in the production of several primary goods like coal, oil, electricity, steel, and cement, which was not getting reflected in the final products or finished goods. When one tries to understand the reason for the collapse of the system in U.S.S.R, one should realize that this is a classic example of how the extreme government expenditure has caused a nation's economy to go bankrupt. This is a classic example of a situation where a perfect market has been suppressed - factors of production were being employed at abnormal prices and market demand was being met by a monopolist - the state here. Economists and managers alike, build models of economic behaviour by inductive reasoning. The model is tested with actual empirical data. If the tests support the model, it can be accepted; otherwise, it should be revised. The situation in eastern Europe has thrown across several important information – like the growth of an economy in the midst of severe administrative bottlenecks, the lack of meaningful foreign trade, and political dissonance.  Ã‚  

International Business of Botswana Country Essay

International Business of Botswana Country - Essay Example When Botswana appeared on the face of the map, there was no army for the defence and protection of the country. In 1977 Botswana Defence Force was formed and today almost 12000 armed men are an integral part of the system (Botswana, 2007). The government of Botswana has perfectly maintain the outflow of diamonds for the economic well being of the country and from last three decades Botswana is a leader in the production of quality diamonds. Thus, the revenue generated from diamond mining is very rightly used to carry out the essential expenditures of the country (Background Note: Botswana, 2007). The other chief sources of income in Botswana include tourism and cattle industry. Before 1971 the market was based on agriculture and farming, but then diamond mining started that heightened the economic growth and also increased the per capita income of the country as compared to many other African countries (The World Fact Book, 2007). Whenever we consider the economic structure of a place, we cannot deny the fact that there are some threatening issues related to that area which have an immense effect on the expansion and progression of the nation. Similarly, Botswana is dealing with the victims of HIV- AIDS as the country has the second highest infection rate and as a result huge amounts are needed to tackle the problem every year (Structure of the economy, 2007). In addition to it, the nation is also facing crisis in the employment sector. A large number of population is unemployed and the government is taking keen interest in facilitating the service sector. Cultural values of Botswana In the northern areas of Botswana trained and skilful women are working in their villages. They are famous for weaving and crafting. Moreover, few writers of that part of the world are famous for their work primarily Bessie Head, who wrote about Botswana until her death in 1986 (Binsbergen, 2002). In the same manner people from different fields have entered the global market in order to promote the culture of Botswana and to strengthen its economy in the world (Botswana, 2007). Botswana - International trade today and 25 years back After the independence of Botswana in 1966, agriculture had been its major economic sector. Its main emphasis had been on agricultural goods which shared about forty percent (40%) of the Gross Domestic Product of Botswana and forms the basic exports of the country. Even today the primary sector contributes highest to the country's GDP, which now, not only includes agricultural goods but also mining. Now Botswana is on the path of diversification. It is working hard to diverse its economy and emphasizing more on manufacturing goods and mining than on agricultural goods. Its main manufacturing products include meat products, dairy products, textiles, chemical and leather products, wooden products and many others. In 1983 the mining sector contributed 52.6 percent to the GDP (Kapunda, 2003, 3). The major exports of Botswana are focused to Common custom area, USA, UK, Zimbabwe and to other European countries. In the year 1985 the total exports of Botswa