Question

discuss the fundamental nature of management economics with respect to the three choice problems of the economy?

Answer 1

Management and economics are closely related. This has led to the development of managerial economics. Management involves guidance, leadership and control of the efforts of a group to achieve a common goal. Economics deals with analyzing and providing answers to the fundamental problem of scarcity of resources.

There are three choice problems of the economy which have to be handled. They are:

What to produce? How to produce? For whom to produce?

Managerial economics is used to provide an answer to these questions. It has evolved many analytical tools to handle the allocation of scarce resources.