Unit I: Introduction to Managerial Economics
2 Marks (10 questions)
1. Define managerial economics.
2. What are the basic assumptions of managerial economics?
3. Explain the difference between scarcity and choice.
4. What are the different types of economic decisions?
5. Briefly explain the deductive and inductive methods of economic analysis.
10 Marks (3 questions)
1. Discuss the law of demand and the law of supply. Explain how they interact to
determine market equilibrium.
2. What are the different types of price elasticity of demand? How does price
elasticity affect the revenue of a firm?
3. Briefly explain the concept of opportunity cost. How does opportunity cost
influence economic decision-making?
Unit II: Production and Cost Function
2 Marks (10 questions)
1. What is production? What are the factors of production?
2. Define production function. Explain the law of diminishing returns.
3. What are the different types of returns to scale?
4. Briefly explain the concept of fixed cost, variable cost, and total cost.
5. What are the differences between short-run and long-run costs?
10 Marks (3 questions)
1. Explain the concept of economies of scale and diseconomies of scale. How
do they affect the average cost of production?
2. Briefly explain the different types of cost curves, such as marginal cost curves
and average cost curves.
3. What is the learning curve effect? How does it affect the cost of production
over time?
Unit III: Market Structure
2 Marks (10 questions)
1. What are the characteristics of a perfectly competitive market?
2. Briefly explain the concept of monopoly and monopolistic competition.
3. How does the role of advertising differ in different market structures?
4. What are the different types of oligopoly?
5. Briefly explain the concept of cartelization and price leadership.
10 Marks (3 questions)
1. Compare and contrast the different types of market structures, such as perfect
competition, monopoly, monopolistic competition, and oligopoly.
2. Discuss the economic implications of monopolies, such as deadweight loss
and inefficiency.
3. Briefly explain the game theory approach to oligopoly analysis.
Unit IV: Introduction to Macroeconomics
2 Marks (10 questions)
1. What is macroeconomics? How does it differ from microeconomics?
2. Briefly explain the concept of gross domestic product (GDP).
3. What are the different factors that affect economic growth?
4. How does the government influence the macroeconomics environment?
5. Briefly explain the concept of circular flow of income.
10 Marks (3 questions)
1. Discuss the role of fiscal policy and monetary policy in stabilizing the
economy.
2. Briefly explain the Keynesian theory of economics.
3. What are the different types of inflation? How does inflation affect the
economy?
Unit V: National Income Concepts
2 Marks (10 questions)
1. What is the difference between personal income and national income?
2. Briefly explain the different methods of measuring national income, such as
the income approach, the output approach, and the expenditure approach.
3. What is the difference between real GDP and nominal GDP?
4. Briefly explain the concept of intermediate goods and final goods.
5. What are the limitations of using national income as a measure of economic
welfare?
10 Marks (3 questions)
1. Discuss the factors that contribute to the unequal distribution of income in a
society.
2. Briefly explain the concept of poverty and different methods of measuring
poverty.
3. What are the different roles of the government in reducing income inequality
and poverty?
Unit VI: Money and Inflation
2 Marks (10 questions)
1. What are the different functions of money?
2. Briefly explain the different types of money, such as currency, demand
deposits, and time deposits.
3. What is the relationship between inflation and interest rates?
4. Briefly explain the concept of hyperinflation and stagflation.
5. What are the different tools that the government can use to control inflation?
10 Marks (3 questions)
1. Discuss the different theories of inflation, such as the demand-pull theory and
the cost-push theory.
2. Briefly explain the impact of inflation on different sectors of the economy, such
as consumers, businesses, and workers.
3. What are the different challenges of controlling inflation in developing
countries?
UNIT=5
Measuring national income, while a crucial economic indicator, faces several
challenges and issues that can impact the accuracy and completeness of the
measurements. Here are some key issues in measuring national income:
1. Informal Economy:
National income measurements may not fully capture economic
activities in the informal sector, where transactions often go
unreported. This includes activities like street vending, small-scale
services, and under-the-table transactions.
2. Non-Market Transactions:
Certain productive activities, such as household work or volunteer
services, are not typically included in national income calculations.
This omission can lead to an underestimation of a nation's actual
economic activity.
3. Quality of Data:
The accuracy of national income figures depends on the quality of
data collected. In some cases, data may be outdated, incomplete,
or subject to estimation errors, affecting the reliability of the
measurements.
4. Underground Economy:
Illegal activities, such as black market transactions and unreported
income, contribute to the underground economy. Measuring these
activities is challenging, leading to potential underestimation of
the true economic output.
5. Unrecorded Transactions:
Transactions that occur outside of formal financial channels, such
as barter transactions or informal lending, are challenging to
quantify and may be excluded from national income
measurements.
6. Technological Changes:
Rapid technological advancements can lead to new forms of
economic activities that are not adequately captured by traditional
measurement methods. The digital economy, for instance, poses
challenges in tracking online transactions and the value of digital
goods and services.
7. Income Distribution:
National income figures may not reflect the distribution of income
among different segments of the population. High levels of income
inequality can skew the representation of overall economic well-
being.
8. Deflation and Inflation Effects:
Changes in the general price level (inflation or deflation) can affect
the real value of national income. Adjusting for inflation is
necessary to obtain a more accurate picture of economic growth.
9. Globalization:
The interconnectedness of economies in a globalized world poses
challenges in accurately attributing the value of production to a
specific country. Multinational corporations and global supply
chains complicate the task of assigning economic output to
individual nations.
10.Environmental Impact:
Traditional measures of national income often do not account for
environmental degradation and resource depletion. As a result,
the sustainability and environmental impact of economic activities
may be overlooked.
Here are 12 points explaining the connection between National Income and
Welfare in detail and simple language:
1. Basic Needs:
National Income helps fulfill basic needs by providing resources for
essentials like food, shelter, and healthcare. A higher National
Income generally means more resources available for citizens to
meet these needs.
2. Standard of Living:
A rise in National Income often correlates with an improvement in
the standard of living. People can afford a better lifestyle, including
better housing, education, and leisure activities.
3. Education Opportunities:
Higher National Income can lead to increased spending on
education, offering better educational opportunities. This, in turn,
contributes to higher skill levels and enhanced well-being.
4. Healthcare Services:
National Income supports the development of healthcare
infrastructure. Increased resources can lead to better healthcare
services, improving overall health and well-being.
5. Employment Opportunities:
A growing economy with higher National Income typically creates
more job opportunities. Employment contributes not only to
income but also to a sense of purpose and well-being.
6. Reduction in Poverty:
A robust National Income can contribute to poverty reduction by
providing the means for social welfare programs and poverty
alleviation initiatives.
7. Infrastructure Development:
National Income funds infrastructure projects, such as roads,
bridges, and public services, improving the overall quality of life
for citizens.
8. Social Services:
Adequate National Income allows governments to invest in social
services like public safety, sanitation, and community
development, enhancing the well-being of residents.
9. Income Distribution:
While National Income is crucial, how it is distributed among the
population matters. An equitable distribution contributes to
overall welfare by reducing disparities.
10.Environmental Sustainability:
Sustainable development is vital for long-term welfare. National
Income should be generated without compromising the
environment, ensuring a healthy and sustainable future.
11.Innovation and Progress:
National Income supports research, innovation, and technological
progress. Advancements in these areas contribute to improved
living standards and overall welfare.
12.Social Cohesion and Stability:
A well-performing economy with a substantial National Income
can contribute to social cohesion and stability, fostering a sense of
security and community well-being.
