Question

passage require analysis and breakdown

In Managerial Economics, the authors discuss two different types of games: sequential-move games and simultaneous-move games. Sequential-move games mean ”players take turns, and each player observes what his or her rival did before having to move” (p.186). You are essentially making moves and decisions based off the other player. Sometimes you are able to predict the outcome by looking ahead to possible moves the other player may make. This is very similar to the strategy used in chess or checkers. “In simultaneous-move games each player decides on her strategy before knowing the decisions of other players” (Froeb, McCann, Shor, & Ward, 2016). This strategy is a little more difficult than sequential-move game, but is still doable. The easiest analogy I can think of is the game of rock, paper, scissors. You have to decide what you are going to play without knowing what your opponent is going to play.

An instance in my life in which I use game theory would have to be when I am driving in traffic. Traffic is horrible in Houston and no matter what time of day you can guarantee that you will be sitting in traffic for a while. Of course, all the other drivers are players in this game with the objective being getting from point A to point B in a reasonable amount of time. I can see how driving in traffic could be either sequential-move game or simultaneous-move game. If drivers used their blinkers like they are supposed to then you can figure out which lane you want to stay in or move to. However, we all know that not all drivers use their blinkers, so sometimes you have to just be on the lookout for other players before making a lane change or staying in a lane and just going faster. Of course I drive a lifted 4x4 V8 truck so I use a lot of gas, especially driving in the city and sitting in traffic. I have to be able to get to where I am going in a fast time so that I am not stuck in too much traffic burning up all my fuel. The more fuel I use the more money that is going to have to come out of my pocket when it is time to refuel. Luckily I invested in an EZ tag which allows me to take an alternative route that is not as crowded and cuts my drive time in half and also saves me fuel. Overall, this saves me money not only on gas, but also on money I will have to spend on any future repairs I may have to make from normal wear and tear. I did not know that I was implementing game theory. Now when I drive anywhere I will know that I am play

Answer 1

Managerial Economics can be defined as amalgamation of economic theory with business practices so as to ease decision-making and future planning by management. Managerial Economics assists the managers of a firm in a rational solution of obstacles faced in the firm's activities.

The scope of managerial economics refers to its area of study. Managerial economics has its roots in economic theory. . Managerial economics refers to those aspects of economic theory and application which are directly relevant to the practice of management and the decision making process within the enterprise.

Fundamental Principles of Managerial Economics- Incremental Principle, Marginal Principle, Opportunity Cost Principle, Discounting Principle, Concept of Time Perspective Principle, Equi-Marginal Principle

Managerial economics helps to assess business goals and stratagem on a continuous basis--weekly, monthly and quarterly, for example. Using managerial economics helps to scrutinize the hazards of business choices and evaluate marketing techniques and procedures.

Managerial economics is used to analyze the risks of business decisions and as a method to identify and quantify the uncertainties in a situation. Managers use some form of economic principles in making day-to-day decisions

Through economic theory, managers are able to make managerial decisions based on the knowledge about economies of scale. In economies of scale, managers are able to make profits while minimizing cost of production and maintaining price level.