SHORT QUESTIONS FOR MANAGERIAL (BUSINESS/MICRO) QUESTIONS

• SHORT QUESTIONS FOR MANAGERIAL (BUSINESS/MICRO) QUESTIONS
• MICRO ECONOMICS
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• DEFINE ECONOMICS

1. THE WORD ‘ ECONOMICS IN ENGLISH HAS BEEN DERIVED FROM TWO GREEK WORDS ‘ OIKOS( DOMESTIC) AND NEMEIN ( MANAGEMENT) MEANING THERE BY  HOUSE HOLD MGMT.
2. ECONOMICS IS THE STUDY OF THOSE ACTIVITIES OF HUMAN BEINGS WHICH ARE CONCERNED WITH THE SATISFACTION OF UNLIMITED WANTS BY UTILIZING LIMITED RESOURCES.
3. ECONOMICS IS A SUBJECT THAT STUDIES THOSE ACTIVITIES OF MAN WHICH ARE CONCERNED WITH THE MAXIMUM SATISFACTION OF WANTS OR WITH THE PROMOTION OF WELFARE AND ECONOMICS GROWTH BY THE EFFICIENT CONSUMPTION,PRODUCTION AND EXCHANGE OF SCARCE MEANS HAVING ALTERNATIVE USES.

• MEANING OF MANAGERIAL ECONOMICS

1. MANAGERIAL ECONOMICS IS THAT PART OF ECONOMICS THEORY WHICH DEALS WITH THE APPLICATION OF ECONOMIC TOOLS AND CONCEPTS TO THE SOLUTION OF BUSINESS PROBLEMS OR THE PROBLEMS OF RESOURCE ALLOCATION AMONG THE COMPETING ENDS.
2. EDWIN MANSFIELD,” MANAGERIAL ECONOMICS IS CONCERNED WITH THE WAYS IN WHICH MANAGER SHOULD MAKE DECISIONS IN ORDER TO MAXIMISE THE EFFECTIVENESS OR PERFORMANCE OF THE ORGANISATIONS THEY MANAGE.
3. JOEL DEAN,” THE PURPOSE OF MANAGERIAL ECONOMICS IS TO SHOW HOW ECONOMICS      ANALYSIS CAN BE USED IN FORMULATING MANAGERIAL POLICIES.

• MEANING OF LAW OF DEMAND

1. LAW OF DEMAND STATES THAT OTHER THINGS BEING EQUAL DEMAND FOR A GOOD EXTENDS WITH A FALL IN PRICE AND CONTRACTS WITH A RISE IN PRICE.
2. D_X = F( P_X,Y,T,E,P_R……) INCOME, PRICE OF RELATED GOODS, EXPECTATION AND TASTE AND PREFERENCE ETC ASSUMED TO BE CONSTANT.
3. IN SIMPLE WORDS WE CAN SAY  LAW OF DEMAND EXPLAINS THE INVERSE RELATION BETWEEN PRICE AND DEMAND OF A COMMODITY.
4. ACCORDING TO MARSHALL :- “THE LAW OF DEMAND STATES THAT  AMOUNT DEMANDED INCREASE WITH FALL IN PRICE AND DIMINISHES WITH RISE IN PRICE, BEING OTHER THINGS REMAINING THE SAME.

• DEFINITION OF INDIFFERENCE CURVE

1. AN INDIFFERENCE CURVE IS A CURVE WHICH SHOWS DIFFERENT COMBINATIONS OF TWO COMMODITIES YIELDING EQUAL SATISFACTION TO THE CONSUMER. IT MEANS ALL THE POINTS LOCATED ON AN INDIFFERENCE CURVE REPRESENT SUCH COMBINATIONS OF TWO COMMODITIES GIVE EQUAL SATISFACTION TO THE CONSUMER. A CONSUMER BECOMES INDIFFERENT ABOUT CHOICE.
2. H.L.VARIAN” AN INDIFFERENCE CURVE REPRESENTS ALL COMBINATIONS OF TWO COMMODITIES THAT PROVIDED THE SAME LEVEL OF SATISFACTION TO A PERSON. THAT PERSON IS THEREFORE INDIFFERENT AMONG THE COMBINATION REPRESENTED BY THE POINTS ON CURVE.
3. WHAT DO YOU MEAN BY DEMAND
4. FERGUSON,” DEMAND REFERS TO THE QUANTITIES OF A COMMODITY THAT THE CONSUMERS ARE ABLE AND WILLING TO BUY AT EACH POSSIBLE PRICE DURING A GIVEN PERIOD OF TIME OTHER THING EQUAL.

·         ELEMENTS OF DEMAND:-

1. DESIRE OF A THING
2. MONEY TO SATISFY THAT DESIRE
3. WILLINGNESS TO SPEND THE MONEY
4. RELATIONSHIP OF THE PRICE AND QUANTITY OF THE COMMODITY DEMANDED
5. RELATIONSHIP OF THE TIME AND QUANTITY OF THE COMMODITY DEMANDED

• DEFINE GIFFEN’S GOODS

1. ARE KIND OF INFERIOR GOODS. WERE EXPLAINED FOR THE FIRST TIME BY SIR ROBERT GIFFEN AND AFTER HIS NAME THESE ARE CALLED GIFFEN GOODS. GIFFEN GOODS ART THOSE INFERIOR GOODS:-
2. THE DEMAND FOR WHICH DECREASES AS THE INCOME OF THE CONSUMER INCREASES AND INCREASES AS THE INCOME OF THE CONSUMER DECREASES
3. THE DEMAND FOR WHICH INCREASES WITH INCREASES IN THEIR PRICES AND FALLS WITH A DECREASE IN THEIR PRICES
4. INCOME HAS ADVERSE EFFECT BUT PRICE HAS POSITIVE EFFECT

• WHAT DO YOU MEAN BY ELASTICITY OF DEMAND
• ELASTICITY OF DEMAND REFERS TO% CHANGE IN THE QUANTITY DEMANDED OF A COMMODITY AS A RESULT OF GIVEN % CHANGE IN PRICE/INCOME/PRICE OF RELATED GOODS. IT IS A QUANTITATIVE CONCEPT. ELASTICITY IS A A MEASURE OF THE THE RESPONSIVENESS OF ONE VARIABLE CHANGE IN OTHER.
• DOOLEY,” THE ELASTICITY OF DEMAND MEASURES THE RESPONSIVENESS OF THE QUANTITY DEMANDED OF GOODS TO CHANGE IN ITS PRICE,PRICE OF OTHER RELATED GOODS AND CHANGES IN THE CONSUMER’S INCOME.”
• DIFFERENCE
• RETURN TO A FACTOR

1. REFERENCE TO SHORT PERIOD
2. SOME FACTORS ARE FIXED AND OTHERS ARE VARIABLE
3. DUE TO ONE FACTOR
4. CHANGE IN THE PROPORTION OF DIFFERENT FACTORS

• RETURNS TO SCALE

1. LONG PERIOD
2. ALL ARE VARIABLE
3. ALL FACTORS ARE CHANGED IN SAME PROPORTION
4. DUE TO CHANGE IN SCALE

• DEFINE PRODUCTION FUNCTION
• PRODUCTION FUNCTION REFERS TO THE TECHNICAL RELATIONSHIP BETWEEN THE QUANTITY OF GOODS PRODUCED AND FACTORS OF PRODUCTION NECESSARY TO PRODUCE IT.
• WATSON,” THE RELATION BETWEEN A FIRM’S PHYSICAL PRODUCTION ( OUTPUT) AND THE MATERIAL FACTORS OF PRODUCTION( INPUTS) IS REFEREED TO AS PRODUCTION FUNCTION”
• Y =f ( L,K,)
• DISCUSS THE NATURE OF ECONOMICS

1. ECONOMICS IS BOTH SCIENCE AND ART.
2. SCIENCE BECAUSE IT IS SYSTEMATIC STUDY OF ECONOMIC ACTIVITIES BASED ON SCIENTIFIC LAW. ECONOMICS IS AN ART BECAUSE IT APPLIES ECONOMIC LAWS AND SOLVE PRACTICAL PROBLEMS.
3. ECONOMICS IS A POSITIVE SCIENCE WHICH IS RELATED TO REAL STATE OF THE ECONOMIC FACTS. IT IS NORMATIVE SCIENCE WHICH TELLS US WHAT IT SHOULD BE.

• DIFFERENCE BETWEEN UTILITY AND SATISFACTION

1. WANT SATISFYING POWER OF A GOOD IS UTILITY.
2. SATISFACTION IS THE RESULT OF THE USE OF THE UTILITY OF A COMMODITY.
3. UTILITY IS THE CAUSE AND SATISFACTION IS THE EFFECT
4. WE PURCHASE ICE CREAM BECAUSE IT GIVES US UTILITY WHEN WE CONSUME IT ,GIVES US SATISFACTION.

• WHAT IS DEDUCTIVE METHOD

1. METHOD BY WHICH WE TRY TO KNOW A PARTICULAR  TRUTH ON THE BASIS OF A GENERAL TRUTH.
2. WILLSON BY DEDUCTIVE METHODS IS MEANT REASONING FROM THE GENERAL TO PARTICULAR OR FROM THE UNIVERSAL TO INDIVIDUAL”
3. MAN IS MORTAL
4. MARSHALL IS A MAN
5. MARSHALL IS MORTAL