Managerial economics
Paper-1
Part - A ( 2 marks)
1. Micro economics- It is the branch of economics that examines the
functioning of individual industries and behaviour of individual
decision making units(i.e)Business rms and households.
2. Incremental concept-It is the most important concept in
[Link] principle is applied to business decisions which
involves a large increase in total cost and total [Link] cost
is the change in total cost as a result of change in the level of output.
[Link] curve - It is a line graph utilised in economics,that shows how
many units of a good or service will be purchased at various prices.
[Link] behaviour - It refers to how individuals make decisions and
take actions when acquiring and using products or services.
[Link] competion- Imperfect or monopolistic competition is,where
the conditions of perfect competition do not hold, “Imperfect
competition” will [Link] has large number of rms in the industry with
few barriers to entry and exit.
[Link] of scale-The term economies means advantage and scale
denotes large scale [Link] term economies of scale denotes
advantage of large scale production.
(or)
Large scale production provides several advantages to the industry in
technical languages,these bene ts are called economies of scale.
[Link]- Pure monopoly is where only one producer of a rm exists
in the industry and dominates the market.
8. Business cycle-The alternating periods of expansion and contraction
in the economic activity is called business cycle or trade cycles.
9. Business indicators-They are key stats about the economy that can
help investors decide when to buy or sell investments.(e.g) If stock
market is at it’s peak,you may want to buy or sell.
10. Deflation- It is the reverse of [Link] refers to a sustained decline
in the price level of goods and services.
11. Fiscal policy-Fiscal policy is the use of government expenditure and
revenue collection to influence the economy.
[Link] economy-All the transactions carried out between two
individuals will occur by payment through payment gateways or plastic
money.
Part-B (6 marks) (Answer any 5)
[Link] out the nature and scope of managerial economics.
Ans: Nature and Scope- Yellow pdf Page 6.
[Link] are the fundamental concepts affecting business decisions?
Ans:Fundamental concepts affecting business decisions-Sathyabama pdf
Page 17.
[Link] “Trend Projection” method and “Collective Opinion” method
of demand forecasting.
Ans:Trend Projection method-Uni pdf page 82.
Collective opinion method-Uni pdf page 80.
[Link] explain the uses of Business indicators.
Ans: Business cycle indicators analyse trends and turning points in an
economy. They can predict trends and turning points as well. Cycles
tend to be volatile and unpredictable. Understanding and being able to
gauge them through various indicators can be a critical skill for
businesses and investors.
[Link] the main features of monopolistic competition. How can such
competition be sustained?
Ans: Features of monopolistic Competition-Uni pdf page 182.
[Link] the various phases of a trade cycle.
Ans:Phases of business cycle- Uni pdf page 216.
[Link] the consequences of inflation.
Ans: Consequences of inflation-Uni pdf page 205.
Part-C. (12 marks)(Answer any 2)
1. “Managerial economics is economics applied in decision making”
Explain.
Ans: Fundamental concepts of decision making-Sathyabama pdf page16.
[Link] the various types of price elasticity of demand. Discuss the
factors on which the elasticity of demand depends.
Ans:Types of price elasticity- Uni pdf page 53.
Factors- Uni pdf page 57.
[Link] briefly the different cost concepts relevant to managerial
decision of planning and control.
Ans: Different cost concepts-Uni pdf page 92.
[Link] the concept of economic welfare, and its relationship with
National Income of a country.
Ans: Concept of welfare-Sathyabama pdf page 3.
Relationship with national income.
[Link] the main objectives of scal policy in India. Explain its impact
on economy.
Ans: Objective of scal policy- Uni pdf page 243.
Impact on economy- Uni pdf page 251.
