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1.What is meant by Economics? Economics is a social science that studies the behaviour of human beings.

Organization or any entity mode up of human beings in situations involving choice. 2.Define Engineering. Economics. Engineers have an added responsibility and that is to include economics in their calculation & decisions. When the economics principles are applied to engineering. Problems, then a new branch of knowledge called engineering economics. 3.What is managerial economics? It involves application of economic principles micro economic in character with in microeconomics deals only with the firm, scope is not so wide, aims at decision making to solve real life problem. 4.What are objectives of managerial economics? To help in understanding the market condition & general economic environment with in which the firm operate. To provide a philosophy for understanding & analyzing resource allocation problem.

5.Differentiate between micro economics & macro economics. Macro economics is the part of economics which examine a complete economic system rather than individual sectors in it. For e.g. Macroeconomic study of a Nation analyze the gross domestic product (GOP) National Income (NI) employment money supply, the changing level of prices. Micro economics study looks at an individual sector of the economy & influence on it great detail.

6.Define Decision and Managerial decision? Decision may be defined as a choice that can be made from available alternatives. Management consists, to a great extent, the making of decisions. Indeed, the decision making is synonymous with management. 7.Difference between risk and uncertainty. Risk: Decision making when the state of world is not known but probabilities for various possible sates are known. Uncertainty: Decision making when the state of the world is not known & probabilities of various possible states are not known. 8.Write a note an operations research and economics? Both operation research & economics are concerned with taking effective decision. Operation research in concerned with model building that aid in decision making. The economics applies this model of decision making. Operation research often concerned with optimization. 9.What are the important objectives of profit maximization? 1. 2. 3. 4. 5. 6. 7. Maximization of sales reverses. Maximization of overall cost Maximization of firms growth rate Maximization of Managers utility Making satisfactory rate of profit. Long-run survival of the firm Entry prevention & risk quotidian.

10.What are the different types of the economic systems? 1. Capitalism

2. Mixed economy 3. Socialism 11.Sate the law of supply? The law of supply states that the quantity of a commodity supplier varies directly with the price, other determinates of supply remaining constant. 12.Mention any 3 important scopes of managerial economics? 1. consumption 2. production 3. exchange 13.What are the few important optimizing models? 1. Baumols Theory 2. Marris theory 14.What is meant by positive and normative science? Positive & Normative economics deals with how the economic problem is solved, the later deals with how the economic problem should be solved. For. E.g. The effects of price or rent control on the distribution of income are problems of positive economics. 15.What is the importance of Economics?

Better decision making on the part of engineers Cost of production can be verdures.

16.What are the different types of managerial decision? 1. Major & supplementary decision 2. Organizational & Personal decision

3. Basic & routine decision 4. Programmed & non programmed decision. 17.What do you understand by the process of decision making? 1. Identifying the problem 2. Unanalysing the problem 3. Developing alternative solution for the problem 18.What is income effect? The increase in real income or purchasing power encourages demand for the commodeting with reducers price. This increase in demand on account if incredible in income. 19.What are the basic tools of managerial economics? 1. Oppartment cost concept 2. Inclinator concept 3. Discounting principles 20.Mention any three types of managerial decisions? 1. organizational & personal decision 2. Major & supplementary decision 21.What do you meant by demand? Demand is a relation showing the various amounts of a commodity that buyers would be willing & able to purchase at possible alternative price during a given period of time, all other things remaining the same. 22.List out the factors influencing demand? a. Price of the product b. price of substitutes & complementary

c. consumers income e. state of trade

d. advertisement expenditure f. taste & fashion of buyers

23.What is demand forecasting? Demand forecasting is the estimate of level of demand to be expected for goods or services for some period of time in future. 24.What is Delphi-Method? Qualitative forecast involve collection of opinions & preferences. Which is further qualified using different statistical tools. Delphimethod. 25.What are giffens goods? Interior goods satisfying an important wont, but consumed on account of their cheapness only by low income households who are force to spend a substantial part of their income on these commodities to satisfy that wont. 26.Difference between forecast & prediction. Forecast is a detailed estimate of future events & their trends & is based on meticulous collection of primary data from the market place. Prediction is a guess estimate about the future events & trends in a subjective manner without taking into account past & without undertaking any objective analysis. 27.What is demand function? For the purpose of estimating demand all the relevant determinants of demand for a product are first specified & then summed up in a functional form known as demand function.

28.What are consumers goods & producers goods? Consumers goods are those goods which are sued for final consumption (e.g.) paracetomol tablets & candies are called consumer good. Producers goods are goods which are needed for the production of other goods. (e.g.) a raw material paracetemol it require tablets. 29.What is elasticity of demand? The degree of responsiveness of demand of a product / commodity to a variation in any of its determinate is measured by what is termed as elasticity of demand 30.Difference between price elasticity & income elasticity of demand. Price elasticity of demand: It measures the responsiveness of the quantity demand of a good to change in its own price. Income elasticity of demand: It measures the responsiveness of the quantity demand of a good to change in the income of the consumer. 31.List out the measurement of price elasticity of demand? 1. Point elasticity of demand 2. Are elasticity of demand 32.What is law of supply? The law of supply states welt the quantity of a commodity supplied varies directly with the price, other determinant of supply remaining constant. 33.Differentiate active and passive forecasting demand

Active forecasts consider the likely changer in the relevant able in future in estimating the future demand. Passive forecast refers to the estimation of future demand if things continue the way they have been in the past. 34.What are inferior goods? Inferior goods are aigrette, Kerosene strive is inferior to gas stove, traveling by bus is inferior to traveling by car etc. 35.Difference between supplementary good & complementary goods. The substitution goods is the change in demand brought about by a change in the relatives price of the commodity ex. Meant & firs, Tea & coffee Commodities which are jointly demander have less elastic or inelastic demand jointly demanded commodities like car & petrol socks & stores. 36.List out the uses of price elasticity of demand? 1. To Businessman ii. To the Government iii. To Trade Union iv. To Farmers 37.What is the Time series? Time series analysis depends upon part data. The method is applied to time series data on sales method, on industry or firm which analysis its part sales to determine the nature of the existing trend.

38.What do you mean by parametric techniques? The future can be predicted from certain happenings in the present. 39.What do you mean by end use method? The end-use method of demand forecasting has considerable the critical & practical value. Making forecasts by this method requires building up the probable demand for inputs in future by consuming industries & various sectors. 40.What are ceteris and paribus? Ceteris paribus or other things remaining constant. Their assumption implies that the income of the consumers taste & preference price of substitutes & complementary goods and number of consumers remains in charged. 41.Define cost. Cost refers to the amount of expenditure, national or actual attributable to a thing or product. 42.What is production function? Production function is a formal statement & a tool of analysis which expresses the technical relation between output of a good and different combination of inputs used in its production. It indicates the maximum amount of output what can be produced with the help of each possible combination of inputs. 43.What are the important of production function? when inputs are specified in physical units, production function help to estimate the level of production.

It becomes ISOquants when different combination of inputs field in the same level of output. 44.Write a short note ISO quant? The term ISO quants derived from the words ISO & Quant ISO means equal & quant implies quantity. ISO Quant therefore means equal quantity. A production function with 2 variable input which are substitutable for one another within the family. 45.What is constant return to scale? Increasing returns to scale cannot be experienced by the firm indefinitely. Firs slowly enter the phase constant radius to scale. 46.What is least cost combination? The term producers equilibrium is the counter part of the consumers equilibrium Just as the consumer is in equilibrium when be secures maximum satisfaction. In the same manner, the producer is in equilibrium when he secures maximum output, with the least cost combination of factors of production. 47.What are the three stages of production function? 1. Increasing Returns 2. Diminishing Returns 3. Negative Return Stage 48.What is Production? The term production refers to a process by which input are transformed into output. It inducer on activity that creates utility or adds value that the consumer have derived from the inputs. 49.What are the different properties of ISOquants?

1. ISOquant slope towards from left to right. It means increasing employment of one factor of production results in the decreasing employment. 2. ISOquants are convex to the origin. 50.What is Economics of scale? Production may carry on small scale or on a large scale production by increasing all the factors it secures known advantage to the product. 51.What is cost output relationship? Cost of production in an industry depends on many forces such as i. Rate of output, ii. Size of the plant iii. Price of factors of production. Iv. Technology used etc. 52.What is opportunity cost? Opportunitycost can be defined the cost of the best alternative forgone. It is the reverend or Income which could have been earned by employing. 53.Difference between sunk cost and incremental cost? Sunk cost is one which is not affected or altered by a change in the level of business activity. The most important example of sunk cost is the amortization of past expense. Incremental cost refers to additional cost due to changed in the level of business activity. 54.Distinguish between Economic cost and Accounting cost? Cost concepts used in accounting purposes Cost concepts used in economic analysis of business activities

55.What is breakeven point? Break even point for a firm occurs where its TR=TC i.e. Tot. Revenue equal tot. cost. The firm in this situation makes normal profits only or it is a no profit no loss situation. The long-run equilibrium of all competitive firms will occur only at BEP. 56.What is the different estimation cost output relationship? 1. Accounting approach 2. Engineering approach 3. Statistical approach 57.What are the assumptions under cobb douglass production function? 1. 2. 3. 4. There is constant return to scale All inputs are homogeneous There is perfect competition There is no charge is technology

58. Define ISO cost? These curves represent the combination of inputs that will cost a producer the same amount of moneys. 59.. What is the rule of COBB-DOUGLAS function? P=blab c 1-a Where P is the total output L is the index of employment of labor in manufacturing C= index of fixed capital in manufacturing. 60.What is the difference Dis-economics of large scale production?

1. External economics 2. Internal economics 61.What is pricing? The essence of economics is said to the explanation of the phenomenon of exchange value that is price. 62.What is price discrimination? It is the use of different prices for the same product when it is sold in different location or market segment. 63.What is full cost pricing? Cost of product is calculated and a fail percentage of profit margin is added are hence the price of the product in determined. 64.What is marginal cost pricing? It is sometimes used when a firm has some space capacity which it to use without diverting a way from its regular business. 65.Write a note on cost plus pricing? Cost is the major determine of price many industries. The basic method of price computation using the cost plus approach is add % of cost producing a marketing the price = direct cost + over head cost + profit margin 66.List out the various types of competition existing in the market? a. perfect competition b. imperfect competition

67.What is perfect competition?

When business executives speak of lighting competitive market, they often mean one in which each firm is keenly aware of its rivalry with a few others & in which advertising styling. Packaging and other such commercial weapons are uses to attract business away from them. 68.Give three features of perfect competition? 1. 2. 3. 4. Large of no. of buyers & sellers Free entry or exit Perfect mobility of factors of production Perfectly knowledge about market condition.

69.What is a Market? Market is a place or a system when the forces of demand & supply under various conditions. 70.What is monopolistic competition? The industries encounter in use real world is seldom perfectly competitive or monopolistic. 71.What is oligopoly? Oligopoly occurs in markets where there are few sellers. 72.Give 3 features of oligopoly? 1. Oligopoly is dominated by a few firms 2. Interdependent among firms is common 3. There may be economies of scale in sales 73.Difference between monopoly & oligopoly? Monopoly is that market structure where these exists one, and only one seller.

premolar

Oligopoly occurs in marketers where there are few sellers. 74.List out the various pricing methods? 1. 2. 3. 4. Full-cost pricing Going rate pricing Strumming pricing Customary pricing

75.What is product differentiation? Price discrimination exists when the same product is sold at different prices to different buyers. 76.What is selling cost? Selling cost refer to those expenses which have to be incurved in setting the product. 77.What is Pure Oligopoly? One where all sellers produce an identical product is pure oligopoly e.g. Steel convert. 78.What do you mean by Marginal cost pricing? It is fixed cost are ignored & prices are determined on the basis of marginal cost with marginal cost pricing the firm seeks to fix its prices so as to maximize tot. contrail to fixed cost & profit. 79.What is leader ship pricing? Leadership pricing is the paradise of fixing price by the firm in a manner dependent upon price charged by one of the firm in the industry cast flow analysis proceeds on the narrow concepts finds flow stmt based on broader concept.

80.List the various factors determining pricing? 1. 2. 3. 4. The demand for the commodity The costs of production of the commodity The objective of the firm selling the commodity The Govt. policy pertaining to.

81.What is meant by financial accounting? The art of recording classifying & summary in a significant manner & in terms of money traction & events which are in part at least of a financial character & interpellant the results use 82.Difference between finance accounting & cost accounting. It is mainly concerned with recording and processing of financial affecting enter price. 83.What is cash book? It is resolving the cash traction therefore recording of cash transaction in a separate book become necessary to keep record of all receipts and payments of money in a business a cash book is maintained. 84.What is cash flow statement? Cash flow is the amount of cash being received and expended by a business, which is often analyzed into its various components. 85.What is current Ratio? These ratios are used to measure the of the firm to meet its maturing objection or current liabilities. Currentio = Current asset/Current liability

86.What is debt equity ratio? This ratio relates debt to equity or covers funds equity here is used in a broader sense as net worth, while debt is normally used as a long term interest bearing loan. Debit equity ratio = Debt / Equity 87.What are the objectives of cash flow statement? 1. To know the liquidity position of a firm 2. To know the principles soulless of cash 3. To know the ones of cash. 88.What is gross profit ratio? Profit before interest and Tax (PBIT). (sales les manufacturing administration and marketing expense but without deducting interest and sales tax. 89.What are the sources of funds? Funds generalized from operation Investment by owners Issue of long-term bonds and denture Sate of long-term reactant 90.How does cash flow statement differ from fund flow statement? Cash flow stmt, data obtained on accrual basis are converted into cash basis. Fund flow stmt is consonant with accrual basis of accounts.

91.What is a Balance Sheet? Balance sheet represents either assets or liabilities existing on the date of the closing of the A/cs. When they are arranged in a proper manner. The resultant statement is called balance sheet. 92.What is Double Entry system? Every transaction occurs between the patties one party the benefit of money or money worth while the other party accepts the same benefit. 93.What are sources of funds? Funds generate from operation Invest by owner Issue of long term bonds & debenture Saleof fixed asset 94.What is Internal Rate of return? It is a technique of capital project evaluation of the discounted cash flow type, where an interest rate for a cap project is calculated at which the discounted cost & benefits, expressed as cash flows at a single pt in time are equal. 95.Define payback period? The payback period in the number of years a project to take recover its investment cost under this method, the number of years that it takes or the net cash flow to equal the cost of project is defined as the payback period. 96.What is Net Present value?

The present value of an amt that is expected to be received at a specified time in the future is the amount that if invested today at a designated rate of return, would cumulate to the specified amount. 97.What is working capital? Working capital is that part of the capital which is required for the financing of working or current needs at firm. 98.What is a debenture? Debenture is long term fixed interest loans to companies. Interest is payable by a company on these stocks whether are profit is earned & not. 99.Write a note on Acid-Test ration? The ratios are used to increase the ability of the firm to meet its maturing obligation or current liability. 100.What is capital Budgeting? It is a function which is concerned with designing & carrying through a systematic investment programme for acquiring fixed asset, such as laud, building plant, equipment etc. the benefit such as expenditure occurs over the future accounting year.

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