QUESTION BANK

UNIT 1
1. Discuss the nature and scope of managerial economics. What are the other related
disciplines?
2. How does the study of managerial economics help a business manager in decision
making?
3. Managerial economics is essentially the application of microeconomic theory of business
decision making. Discuss the statement
4. What is macroeconomics? In what is it applicable to business decision making?
5. What is the meaning of demand in economics? What are the determinants of market
demand? How do increase in consumers income and price of substitute goods effect the
demand of the commodity?
6. Explain the law of supply through the supply schedule and supply curve. Why does the
supply curve slope upwards to the right? What factors cause a rightward shift in the
supply curve?
7. Explain why market equilibrium is determined at the intersection of the demand and
supply curve. What causes the shift in market equilibrium?
8. Find out the equilibrium quantity from the demand function Q=25-10P and supply
function Q=25P. what is the change in price if the demand function changes to Q = 3010P and supply function remaining the same
9. Distinguish between
(a) Demand function and demand schedule
(b) Individual demand and market demand
(c) Normal goods and inferior goods
(d) Arc elasticity and point elasticity
(e) Price elasticity and cross elasticity
(f) Income and price elasticity
10. What is the purpose of demand forecasting? Discuss critically the different methods of
demand forecasting?
11. What are the different techniques of survey method? Under what conditions is complete
enumeration and sample survey methods chosen?

UNIT 2
1. What do you understand by short run production function?
2. Explain the concept of long run decision making?
3. Explain the three stages of production with respect to the Short Run decision making?

4. What is meant by production? State and illustrate the Cobb Douglas function? What is
marginal rate of technical substitution?
5. What is meant by production function? Distinguish between laws of variable proportions
and law of returns to scale.
6. What the factors that causes increasing returns to scale? What are the reasons for the
diminishing returns to scale?
7. Define and explain Isoquants. What are the properties of isoquants?
8. What is meant by the optimum combination of inputs? Using a map of isoquants and
isocosts, show the determination of optimum combination and the cost minimization
problem.

UNIT 3
9. Elaborate on Perfect compeititon market structure
10. Elaborate on Monopolistic Competition market structure
11. Elaborate on Monopoly market structure
12. Elaborate on Oligopoly market structure
13. Explain the various cost concepts
14. What factors determine the market structure?
15. Distinguish between
(a) Perfect Competition & Imperfect Competition
(b) Monopoly & Monopolistic Competition
(c) Monopolistic Competition & Oligopoly
16. What is a cartel? Explain price determination under the cartel system. Assuming that
there are only two firms show how a market demand is divided between the two firms
17. What is meant by Business Cycle? What are the different phases of a business cycle?
18. Explain in detail the different indicators of Business Cycle along with graphical
representation.
19. What are the different measures to control business/ trade cycle?

UNIT 4
20. What is meant by price discrimination? What are the necessary conditions for price
discrimination?
21. Why is the third degree price discrimination more than the first and second degree price
discrimination?
22. Discuss the cost plus pricing and is it different from the traditional theory of pricing
23. What is transfer pricing? How is it determined in different market conditions?

UNIT 5

24. What do you mean by National Income Accounting? Describe the various approaches of
calulating national income.
25. Discuss the concept of multiplier effect and how does it have the influence on the
Economy of the country?
26. How inflation and deflation defined? Can any rise in prices be considered as inflation?
27. Explain the kinds of inflation. How do they differ from one another?
28. What are the measures to control inflation in the country?
29. What is meant by Monetary policy? Describe the instruments of monetary policy.
30. What is meant by Fiscal policy? What are the main objectives of fiscal policy?

UNIT 6
31. What is the basis of international trade? What is the meaning of absolute advantage and
comparative advantage?
32. Define balance of payments. What is meant by disequilibrium in the balance of
payments?
33. Distinguish between the different types of BOP Disequilibrium.
34. What are the causes of disequilibrium in BOP?
35. What are the measures to control disequilibrium?
36. How is exhange rate determined in a free market? Explain the fixed and flexible exhange
rate systmem.
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