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What is the relation between Economics, Business Management and Managerial Economics? Discuss with a global example.

Economics

Economics can be defined as the study of production and consumption of different goods or services and the exchange of wealth to obtain and produce these goods or services. The concept of economics explains how people actually interact with in the market place to get their needs and wants full filled. Since economics relies on the regular human interaction therefore it highlights the role of government and people in certain situation. Macroeconomics and Microeconomics are the two types of economics.

Business Management

Business management is the process of running and controlling a business by managing different associated activities such as leading, planning, controlling, monitoring and organizing. These activities are connected with each other to achieve business goals and work according to the plan (Torrey, 1952).

Managerial Economics

Managerial Economics is entirely based on the concept of social science which combines the multiple thoughts, economic theories and several business practices in order to help the managers in making the final decision (Lequiller, 2006). Specifically, in this competitive environment this concept has a major role to play for optimistic outcomes.

Global Example and Analysis

Malaysia possesses highly open economy and majority people belong the upper middle income segment. Time to time Malaysia has been able to succeed in reducing the poverty. According to the World Bank in the year 2013, Malaysia has a tremendous GDP of $312.5 billion and GDP per capita was $10,500/-. Moreover the unemployment rate is around 3% as per the statistics of the World Bank. The tourism industry of Malaysia is famous across the world (Sullivan, 2003). In the year the United Nations listed Malaysia as the 10^th most visited countries because in the sameyear Malaysia recorded the arrival of 25.03 million tourists. These arrivals generate anamount of MYR60.6 billion, which actually motivates managers to make certain decision like investing more and more in the tourism industry of Malaysia.

While making certain decisions managers need to look at certain stats like the contribution of certain industry in the growth of GDP of the country. Malaysian tourism industry in the year 2013 contributed the 12.5% in the total GDP. While managing a business related to the investment in Malaysia, a manger can easily analyze and recognize the potential opportunities and recommend its investor by highlighting the several factors like contribution in the growth of GDPby the tourism industry of Malaysia (Chris, 1985). Such elements help managers to make decisions very quickly because of tremendous growth and related outcomes.

Explain the concept of Demand and Supply equilibrium with the help of at least two real life examples from the region.

Demand and Supply Equilibrium

Equilibrium is a state in which the demand from the consumer and the market supply balance each other and as an outcome the prices get relatively stable. When the supply gets high the prices usually decreases, which straight away results in a higher level of demand. The balance of demand and supply simply result in equilibrium. It is fact that the models of demand and supply are presented separately. This concept is the mixture of these forces that actually regulate how much of the food is produced and consumed within overalleconomy and most importantly at what price. In the demand and supply concept, the equilibrium quantity and price in a marketplace is situated at the intersection point of the supply and demand curves. As the supply increases, the prices go down the demand rises, but if the supply decreases the impactis vice versa.

Explanation through the Examples

Like for example, at an equilibrium price of $0.75/- each, a person purchases 200 mars chocolate, but if the price increases up to $0.90 so there would be a certain shortfall in the quantity demanded and it would be less than actual supply, therefore now the market won’t be at equilibrium. If in case, the price is reduced to $0.60 in the season of Christmas so it is an immense possibility that demand would be more than the actual supply and in this condition market won’t be equilibrium at all.

Moreover, in the winter season the demand for coffee rises. At an equilibrium the price of coffee is $6.55 and the demand of coffee can be considered as stable. But as the winter season arrives and demand rises which might cross the level of quantity supplied so it will result in the increase in prices. For example, before winter coffee was sold at $6.55 but as the winter arrives the demand boosted and crosses the level of supply which would for sure result in the increase of prices. Similarly, if the prices increases, there is an immense possibility that the demand would go down and the marketwon’t be in equilibrium at all....................

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