MICROECONOMICS

Examination: Midterm
Program: BBA
Semester: 2nd

SUBMITTED BY: MUHAMMAD SHOAIB TARIQ (2193343)

SUBMITTED TO: PROF NAZIA ANJUM
Question no: 1
What is the importance of microeconomics in business decision
making and its impact on small scale industry?

Significance of Microeconomics in Business Decision Making

Microeconomics assumes a significant job in business dynamic. It helps the business chiefs in
settling on creation plan and exchange choices. It provides an analytical tool to examine market
mechanism and helps business firm to take decision about their production and pricing policies.
Following are the points that represents the importance of microeconomics in business decision
making.
Optimum utilization of resources:
The investigation of microeconomics encourages the chiefs to examine and decide how the
beneficial assets are dispensed for different merchandise and enterprises. It likewise helps in
unraveling the makers' problem of what to deliver, the amount to create and for whom to deliver.
Demand analysis:
With the assistance of microeconomic investigation, business firms can figure their degree of
interest inside the specific time interim. The interest for an item varies relying on different
variables influencing it. In this way, business firms and chiefs can decide the degree of interest
for the item.
Cost analysis:
Microeconomic hypotheses clarify different states of cost like fixed cost, variable cost, normal
expense, and peripheral expense. Alongside this, it additionally gives an examination of the short
run and since quite a while ago run costs that help the business chiefs decide the expense of
creation and other related expenses, so they can execute arrangements to chop down expense and
increment their degree of benefit.
Free Market Economy
Microeconomics clarifies the working of a free market economy where, an individual maker has
the opportunity to take monetary choices like what to create, how to deliver, or for whom to
deliver. Designation of assets is dictated by cost or market component for example cooperation
among request and supply
Production decision optimization
Microeconomics manages distinctive creation procedures that help to discover the ideal creation
choice which causes the leaders to decide the elements required so as to deliver a specific item or
a scope of items.
Pricing policy
Microeconomic examination furnishes business directors with a careful information on
speculations of creation and estimating so as to guarantee ideal benefit for the firm over the long
haul..

Microeconomics impact on small scale business

Microeconomic decisions can significantly affect companies; therefore, an understanding of the
implications can help you in making decisions for your small business.
Three microeconomic business factors that affect almost any business are customers, employees,
and suppliers.

The Impact of Clients

Clients have the most immediate microeconomic effect on a business. The straightforward truth
is that you can't effectively work a revenue driven organization without drawing in focused
clients. Realizing your optimal client types and creating and introducing compelling showcasing
efforts are basic to building a client base and producing income streams
Availability of /Workers
Your laborers produce, sell or administration the products and administration that drive your
business. The accessibility of qualified, inspired workers for your business type is crucial to
financial achievement. On the off chance that you work an exceptionally specialized business,
for example, you may need to pay more in compensation to pull in a predetermined number of
accessible, particular laborers
Suppliers
Supply decisions might seem to be controlled by businesses; however, demand increases when
consumers agree to pay more for a good or service. These higher prices mean a business will
increase production and provide more supply of the good or service.
Microeconomic principles tell us that, all other things being equal, as the price of a good or
service increases, businesses will increase the supply of that good or service
Pricing
Business pricing strategies correlate strongly with microeconomic factors. The ideal, or
equilibrium price point exists at the point at which quantity supplied in the market exactly equals
demand. The higher your prices, the lower the size of the population who will buy them.
However, if you offer lower prices than the market demand dictates, you leave money on the
table and you might also end up with shortages of your product or services. This can cause
customer alienation and negatively affect the business in the long term.

Question no2:
How can different firms cope with COVID-19

Coronavirus disease (COVID-19) is an infectious disease caused by a new virus.

“The disease causes respiratory illness (like the flu) with symptoms such as a cough, fever, and
in more severe cases, difficulty breathing. You can protect yourself by washing your hands
frequently, avoiding touching your face, and avoiding close contact (1 meter or 3 feet) with
people who are unwell.”

Preparing Workplaces for a COVID-19 Outbreak:

Organizations and managers can forestall and slow the spread of COVID-19. Bosses should plan
to react in an adaptable manner to changing degrees of malady transmission in the network and
be set up to refine their business reaction designs varying. Organizations are unequivocally urged
to facilitate with state outer symbol and neighborhood outside symbol wellbeing authorities so
opportune and precise data can control suitable reactions.
All employers need to consider how best to decrease the spread of COVID-19 and lower the
impact in their workplace. This may include activities in one or more of the following areas:
a. Reduce transmission among employees,
b. Maintain healthy business operation
c. Maintain healthy work environment

Reduce Transmission Among Employees

Actively encourage sick employees to stay home:

 Employees who have side effects (i.e., fever, cough, or brevity of breath) ought to advise
their manager and remain at home.
 Employees who are well however who have a wiped out relative at home with COVID-
19 ought to advise their boss and follow CDC suggested safety measures.
Identify where and how workers might be exposed to COVID-19 at work:
  Be aware that some employees may be at higher risk for serious illness, such as older
adults and those with chronic medical conditions. Consider minimizing face-to-face
contact between these employees or assign work tasks that allow them to maintain a
distance of six feet from other workers, customers and visitors, or to telework if possible.
Separate sick employees:
 Employees who seem to have manifestations (i.e., fever, cough, or brevity of breath)
upon landing in work or who become debilitated during the day ought to promptly be
isolated from different representatives, clients, and guests and sent home.
Educate employees about how they can reduce the spread of COVID-19

Maintain Healthy Business Operations

Identify a workplace coordinator who will be responsible for COVID-19 issues and their
impact at the workplace.

Implement flexible sick leave and supportive policies and practices.

Assess your essential functions and the reliance that others and the community have on your
services or products.
 Be arranged to change your strategic approaches if necessary to keep up basic activities
(e.g., distinguish elective providers, organize existing clients, or incidentally suspend a
portion of your tasks if necessary).
Consider establishing policies and practices for social distancing. Social distancing should be
implemented if recommended by state and local health authorities. Social distancing means
avoiding large gatherings and maintaining distance

Maintain healthy work environment

Consider improving the designing controls utilizing the structure ventilation framework. This
may incorporate a few or the entirety of the accompanying exercises:
 Increase ventilation rates.
 Increase the percentage of outdoor air that circulates into the system