Datta Meghe Institute of Management StudiesManagerial Economics – Unit 1 & 2

MBA II SemesterFaculty – Archana Shrivastava

Unit1- Fundamental concepts of Managerial EconomicsQ. Discuss the utility of demand forecasting. What are the criteria of a good forecasting method? How is forecasting different from ‘prediction’?OrDiscuss briefly the various methods of forecasting demand and point out their limitations.Q.1 Define managerial economics and evaluate its role in managerial activities.OrExplain the various functions of managerial economist. How can she best serve the management?OrDiscuss the application of basic economic theory to the problem of business firm.“Managerial economics is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by management.” Explain. Or  “Managerial economics is the application of economics in analyzing business decision.” Discuss.Or Distinguish between macro economics and micro economics. Explain how is macro-economics useful in managerial decision making.Q. What is the significance of demand analysis to a sales manager of a business firm? Explain the important determinants of demand.Q. “If demand is elastic, it will pay a business man to charge relatively low prices; if the demand is inelastic, he would be better off with a higher price. Discuss and point out the role of price elasticity in business decision.Q. Discuss various types of elasticity of demand. Explain the methods to measure elasticity of demand. Q. Define elasticity of demand and distinguish between point elasticity and arc elasticity. Explain the method of measuring point elasticity.OrQ. Define factors affecting elasticity of demand and the various methods to calculate it.Q. What is elasticity of demand? Explain giving suitable illustrations, how elasticity of demand determine the price policy of a firm.

Q. “The concept of elasticity of demand and demand forecasting are versatile tools of economic analysis.” Discuss the validity of the statement with appropriate example.

Unit2- Production

Q.1 Explain the concept and managerial uses of production function. Q.2 Explain isoquant and law of variable proportions.Q.3 Discuss total product, average product and marginal product.Q.4 Explain with the help of imaginary figures - total fixed cost, total variable cost, total cost, average variable cost, and marginal cost, average cost.

Q.5 The long run average cost curve, though U shaped, will be flatter and less pronounced than the short run average cost curve. Explain with the help of diagram.Q.6 Discuss various economies of scale. Q.7 Discuss cost concepts relevant to managerial decision of planning and control.OrQ. What is meant by economies of scale? What are the different sources of internal and external economies of scale?Q. Explain the concept of cost output relationship in the short and long run.

Unit3- Market structureQ.1 What do you understand by monopolistic competition? How is price and output determined in short run in a monopolistically competitive market?Q.2 What is monopoly? Explain how price and output strategies are adopted under monopoly.Q.3 Explain the relationship between price and cost of production for a firm under perfect competition in a. Short runb. Long runQ.4 What are the essential conditions of a perfect competition? Distinguish it clearly from imperfect competition.Q.5 Explain product positioning and pricing in oligopoly.Q.6. What is the difference between perfect competition and monopolistic competition? Show how price is determined under monopolistic competition.Q.7 Discuss short run equilibrium of a competitive firm earning supernormal profit, suffering losses, long run equilibrium of competitive firm.Q.8 Discuss concept of oligopoly and its various models.

Unit4- Pricing in practiceQ.1 What is meant by price discrimination? Discuss various degrees of price discrimination.

Q.2 What do you mean by price discrimination? What is discriminating monopoly? Explain the conditions which make it possible, profitable and desirable?

Q.3 Explain transfer pricing with a perfectly competitive imperfectly competitive external market.

Q.4 Explain transfer pricing when there is no external market.Q5. Write short note on

Cost plus PricingIncremental Pricing

Unit 5- FailureQ.1 What is market failure? What are some of the causes of market failure.Q.2 Write short note on asymmetric information.

Unit 6 National Income AccountingQ.1. Define National income. What are the various methods of estimating national income?Q.2 Explain the concepts of Gross National Product, Gross Domestic product and net national product at market pricesQ.4 Write short notes on – concept of GDP and NNPQ.5 What do you understand by Multiplier? Explain leakages of multiplier.Q.6 Discuss Inflation its types and causes. What are the measures to control inflation?Q.7 Write short note on Deflation.

Unit7 Macro Economic PolicyQ.1 Discuss the objectives and tools of monetary policy.OrDiscuss the various credit control methods of monetary policy.Q.2 What is the role and tools of fiscal policy in mobilization of resources.Q.3 “Monetary policy can check a boom, but it is difficult to deal with recession.”-DiscussQ.5 What should be the role of Monetary policy in a developing economy? Also give its limitations.Q.6 Discuss the objectives and tools of fiscal policy.

Q.7 What should be the role of Fiscal policy in a developing economy? Also give its limitations.

Unit 8 Business Cycle

Q.1 What are the phases of business cycle? Explain its characteristics and different stages.

Q.2 Elaborate its various stages with suitable examples.

Q.3 Discuss the effects of business cycle and the various tools to control it.OrWhat are the appropriate monetary and fiscal policies for boom and depression?

Q.4 Discuss the steps a businessman may take to safeguard himself against the evil effects of business cycle.Q.5 Are cyclical fluctuations necessary for economic growth? Suggest appropriate fiscal and monetary policies for depression.

Unit 9 International TradeQ.1 Explain balance of payment. Indicate various items in the balance of payment of a country.Q2. Discuss the need and importance of International trade. Explain the advantages of flexible exchange rates.Q.3 Analyze causes of adverse balance of payments. Q.4 Write short notes onDifference between fixed exchange rate and flexible exchange rateConvertibility of rupeeBalance of payment – methods top correct DisequilibriaQ.5. What do you understand by equilibrium in the balance of payments? Explain the conditions necessary for such equilibrium.

Unit 10 Economic Environment of Business

Q.1 Write a short note on the current scenario of Indian economy.Q.2 Discuss micro and macro economic factors which affect business.