Microeconomics

1. Identifying demand determinants and Formation of a demand equation and deriving demand
curve
Demand of a product is influenced by a number of factors:
1. Price of the product
2. Income of the consumers
3. Number of consumers
4. Type of goods ( essential/basic consumer goods, normal goods, inferior goods, luxury
goods etc)
5. Price of related goods and services
6. tastes and preferences of the consumers
7. expectations of the consumers
8. price of substitute goods/services

D= f(P,Y,n, t,Pc, Pf, Exp, Ps) is the demand equation

2. Economic explanation for stressed industries – telecom, aviation, banking etc

3. Relationship of law of demand with Marketing, Finance and Operations

The law of demand states that other factors being constant, price and quantity demand of any
good and service are inversely related to each other. When the price of a product increases, the
demand for the same product will fall.

Relationship with marketing, finance and operations

 4. Calculation of elasticity of demand – own price, income elasticity, cross price elasticity and
advertising elasticity
Elasticity of demand refers to how sensitive the change in demand is to variations in other
economic variables such as price and consumer income
Demand elasticity is calculated by the percentage change in quantity demanded by the
percentage change in another economic variable

Own price elasticity of demand: is a measure of the percentage change in the quantity
demanded caused by a percentage change in price.
own price elasticity of demand= % chnage in qty demanded / % change in price

Income elasticity of demand: it is used to describe how a change in buyer’s income shifts the
demand function for good
Income elasticity= % change in demand/ % change in income

Cross price elasticity: responsiveness of buyers of a good to changes in prices of related goods
=change in price of good x/ change in price of good y

5. Law of diminishing marginal utility which necessitates the marketers to bring product variants
6. Behavior of average and marginal cost curves
7. Economies and diseconomies of scale
8. Application of Marginal Analysis – Marginal Revenue, Marginal Cost, Marginal Product and
Marginal Utility
9. Break-even analysis
10. Pricing practices - Price discrimination, Cost plus pricing, Transfer pricing, profit maximization
vs sales maximization
11. Behavior of firms in oligopoly and monopolistic competition

Macroeconomics

1. Factors affecting GDP of a nation – Private Consumption, Investment, Government Spending,

Exports and Imports.
2. Current controversy about back series GDP data, Demonetization, GST, NPAs
3. What is recession, inflation and stagflation?
4. Multiplier effect
5. Fiscal Deficit and Current Account Deficit
6. Balance of Payment
7. Impact of CRR, SLR, Repo rate, Tax rate and government spending on GDP
8. Relationship between Inflation, Interest rate and Exchange rate through Purchasing Power
Parity and Interest Rate Parity