Question Bank for Managerial Economics.

1. Define Managerial Economics and the important concepts underlying it.

2. Differentiate Economic Profit versus Accounting Profit with three applied mathematical
examples.

3. Explain demand in a functional format and the factors influencing law of demand using
mathematical notations. Explain the concepts increase / expansion of demand

4. Explain how a linear demand curve cane be derived, from a demand equation with two
mathematical examples.

5. Differentiate Consumers Surplus and Producers Surplus diagrammatically and with three
mathematical examples.

6. Explain the stable, unstable and equilibrium, with suitable examples.

7. Explain with three mathematical examples how equilibrium is attained in the market. Also how
excess demand and excess supply happens following changing in prices.

8. Explain the five types of price elasticity of demand.

9. Explain three types of measurement of price elasticity, and their interpretation.

10.Compare and contrast Income and Cross Elasticity of Demand, also interpret the values
taken with three examples.

11. Explain with five mathematical examples how price elasticity is calculated using point
method, arc method and when quantity is not given. Interpret the values.

12. Explain how a trend line can be fitted to forecast demand and how do you statistically
estimate the goodness of fit.

13. What are the features of a good forecast? How will present the same to the management?

14. As a management trainee, what pricing would you suggest for the new product to be
launched in the market and why?

15. Using the concept of indifference curve explain, decompose price effect into income and
substitution effect, diagrammatically and mathematically.
16. Explain the Law Variable Proportion diagrammatically

17. Explain the concept Returns to Scale

18. Explain the concept of Production Function.

19. Differentiate Economies and Diseconomies of Scale, with suitable examples.

20. Explain why AC is U shaped curve. What is the relationship between AC and MC.

21. Why is LAC called Planning Curve / Envelope Curve / Saucer Shaped Curve

22. Draw the revenue curves under perfect and imperfect competition.

23. Explain the relationship of AR / MR / Price in the context of monopoly power in price fixing.

24. Mathematically and diagrammatically show the general profit maximization conditions of the
firm.

25. Differentiate the features of pure competition from perfect competition.

26. Explain the concept of shutdown point in perfect competition.

27. Explain how there is room for abnormal profit in perfect competition short run.

28. Why there is only room for normal profit in the long run perfect competition, diagrammatically
elucidate.

29. Explain the features of Monopoly. Diagrammatically represent the profit making and loss
making firm.

30. Explain the concept of price discrimination in a single and multiproduct environment.

31. Outline the features of Oligopoly with suitable examples. What is the reason for price
rigidity?

32. Globalization will lead to Monopolistic Competition, do you agree, elucidate diagrammatically
outlining the features.

33. Explain the concept of Dominant Strategies with suitable examples.

34. Explain the concept of Nash Equilibrium with suitable examples

35. Illustrate mathematically with three examples, how equilibrium price and quantity is
determined in different market conditions with total profit / loss.

36.Illustrate mathematically with three examples, how equilibrium price and quantity is
determined in different market conditions with total profit / loss.

37. Define National Income and the importance of it.

38. Explain the concepts in National Income

39. National Income refers to Circular Flow of Income, do you agree?

40. GNI = GNP = GNE, all measure the same. Explain the measurement of GNP

41. What are the features of the different phases of Business Cycle.

42. What Explain theories behind Business Cycle

43. What steps would you suggest to the top management, when your company is facing
sluggish sales with a looming depression in the horizon?

44. Define Inflation and the different types of Inflation

45. Inflation in India is a Demand or Supply side phenomenon, elucidate the theories
diagrammatically.

46. How is inflation measured in India? Explain the concept of WPI and CPI and the weightage
given in the basket of goods

47. What are the monetary tools used in combating Inflation to bring about the concept of cheap
money and dear money policy.

48. Bring out the role of Fiscal Policy in making fundamental macroeconomic corrections. PPP
is an example, discuss.

49. In India inflation is supply or demand side phenomenon, elucidate.

50. Explain what are the factors to be considered while pricing a product?

51. Differentiate the elements to be considered whilst considering the price for durable and
nondurable good.

52. What are the different types pricing methodologies that can be adopted by the firm.

53. Explain Cobb Douglas Production Function. Contrast it with a cubic function.
54. Diagrammatically bring out the case of Price Rigidity (Paul Sweezy Model)

55. Explain the concept of Duopoly.

56. In Indian context how does the government control monopoly and bring out financial
discipline in the economy.