Microeconomics Demand Concepts Quiz

MBA - I Semester Managerial Economics

• Introduction of economic concepts
• Importance of economic approaches in managerial decision-making
• Applications of economic theories in business decisions

Unit - I

• General foundations of managerial economics - Economic Approach
• Circular Flow of Activity
• Nature of the Firm
• Objectives of Firms
• Demand Analysis and Estimation
• Individual, Market and Firm demand
• Determinants of demand
• Elasticity measures and Business Decision Making
• Demand Forecasting

Unit - II

• Law of Variable Proportions
• Theory of the Firm
• Production Functions in the Short and Long Run
• Cost Functions
• Determinants of Costs
• Cost Forecasting
• Short Run and Long Run Costs
• Type of Costs
• Analysis of Risk and Uncertainty

Unit - III

• Product Markets -Determination Under Different Markets
• Market Structure
• Perfect Competition
• Monopoly
• Monopolistic Competition
• Duopoly
• Oligopoly
• Pricing and Employment of Inputs Under Different Market Structures
• Price Discrimination
• Degrees of Price Discrimination

Unit - IV

• Introduction to National Income
• National Income Concepts
• Models of National Income Determination
• Economic Indicators
• Technology and Employment
• Issues and Challenges
• Business Cycles
• Phases
• Management of Cyclical Fluctuations
• Fiscal and Monetary Policies

Unit - V

• Macro Economic Environment
• Economic Transition in India
• A quick Review
• Liberalization
• Privatization
• Globalization
• Business and Government
• Public-Private Participation (PPP)
• Industrial Finance
• Foreign Direct Investment(FDIs)

Lesson I: Fundamentals of Managerial Economics

• Economics is the study of how people satisfy their unlimited wants with limited resources.
• Economics is divided into Microeconomics and Macroeconomics.
• Microeconomics deals with basic economic principles (law of demand, law of supply, consumption, production etc.) applied to managerial decisions.
• Macroeconomics deals with the whole economy (national income, savings, investment, employment).
• Circular flow of economic activity describes the continuous exchange of goods and services between households and firms driven by production, income and spending

Lesson II: Demand Analysis

• Demand analysis is an important component of economic analysis
• Demand and supply determine equilibrium economic conditions
• Economic conditions are dynamic due to shifts in demand and supply
• Demand changes based on factors influencing demand elasticity
• Price elasticity of demand measures the responsiveness of demand to price
• Income elasticity of demand measures the responsiveness of demand to changes in income
• Cross elasticity of demand relates responsiveness of demand to the price of other goods
• Exceptional cases of demand (Giffen goods)

Lesson III: Supply Analysis

• Supply is an independent economic activity that depends on demand
• Managers must adjust supply to meet demand without surpluses or shortages
• Law of supply describes the relationship between price and quantity supplied
• Determinants of supply relate to factors influencing supply (input costs, technology, government regulations, and expectations)
• Elasticity of supply measures the responsiveness of supply to price changes
• Different types of supply elasticities exist (perfectly inelastic, inelastic, unitary elastic and elastic)

Lesson IV: Production Analysis

• Understanding that production is determined by the factors of land, labour, capital and organization
• Identifying the key objectives of production (economies of scale, profit maximization)
• Using the Cobb Douglas function for calculating the relationship between factors
• Learning the production function concepts and the returns to scale
• Law of diminishing returns illustrates the declining marginal product of a variable input when other inputs are fixed
• Identifying the concept of isoquants and the expansion path

Lesson V: Cost Analysis

• Defining the key elements of cost (fixed cost, variable cost, marginal cost, average cost).
• Exploring the relationship between cost and output in short run
• Understanding short-run relationships and long-term trends in the cost-output relationship
• Analysing the concepts of economies of scale, diseconomies of scale and long-run average cost curves

Lesson VI: Analysis of Risk and Uncertainty

• Understanding the importance of risk and uncertainty in managerial decision making.
• Defining and classifying various types of risks in business (economic, market, inflation, interest rate, credit, liquidity, derivative, or currency risk and regulation risks)
• Identifying manager's risk attitude (risk-averse, risk-neutral, and risk-loving).
• Decision-making under uncertainty (using max-min, max-max, and minimax regret criteria).
• Risk management techniques (insurance, hedging, diversification)

Lesson VII: Market Structures

• Categorizing markets based on the number of buyers and sellers and the degree of product differentiation
• Understanding perfect competition, monopoly, monopolistic competition, and oligopoly.
• Price determination and profit maximization under each market structure
• Analysing diagrams representing market structures.

Lesson VIII: Macroeconomics

• Macroeconomics examines the entire economy, focusing on aggregate variables
• Learning about National Income aggregates (e.g., Gross Domestic Product, Gross National Product, Net National Product)
• Understanding different approaches to estimating national income (expenditure, income, output)
• Exploring the factors determining National income (e.g., quantity and quality of production, technology)

Lesson IX: Employment and Unemployment in India

• Defining the concepts of employment and unemployment
• Exploring different types of unemployment—frictional, structural, cyclical, seasonal, and disguised
• Analysing the factors influencing employment and unemployment in India
• Projections of future employment trends

Lesson X: Business Cycle

• Understanding fluctuations in the economy regarding output, income, employment and prices
• Familiarizing the cycle's phases (peak/boom, recession, trough, recovery)
• Understanding theories related to business cycles

Lesson XI: Inflation

• Understanding the economic phenomenon of rising prices for goods and services
• Types of inflation (creeping, walking, running, galloping, hyper)
• Identifying the causes and effects of inflation on different groups of people
• Examining various approaches for managing inflation: control measures

Lesson XII: Monetary Policy

• Explaining the objectives and instruments of monetary policy
• Identifying potential limitations of monetary policy.
• Current Indian monetary policies

Lesson XIII: Fiscal Policy

• Defining fiscal policy and its objectives
• Understanding taxation, public borrowing, and deficit financing
• Significance of fiscal policy in India
• Analysing recent budget proposals and implications for the economy

Lesson XIV: Economic Environment and Transition in Indian Economy

• Exploring the environment and shifts surrounding India's economy
• Detailing the impact of liberalization, privatization, and globalization policies.
• Discussing the factors influencing economic growth and development
• Highlighting important resources, and opportunities

Lesson XV: Business and Government

• Examining the interaction between business and government in diverse ways
• Discussing the role of government institutions
• Understanding the purpose and potential challenges of Public-Private Participation (PPP).

Lesson XVI: Industrial Finance

• Understanding the meaning of industrial finance
• Types of financing (fixed assets, working capital, growth expansion).
• Important funding sources (e.g., bank loans, shares, debentures, or public deposits)

Lesson XVII: Foreign Direct Investment (FDI)

• Details about Foreign Direct Investment (FDI) in India
• Advantages and disadvantages for host and home countries.
• Factors influencing foreign direct investment into India
• Importance of FDI (i.e., inflows and outflows)