p.14
Measurement of National Income
What items are not included in national income?
Intermediate goods and transfer payments.
p.4
Application of Economic Theories in Business
What is the primary goal of managerial economics?
To optimize operations and boost profitability.
p.2
Application of Economic Theories in Business
What is the primary focus of managerial economics?
The application of economic methods in the organizational decision-making process.
p.1
Introduction to Managerial Economics
What is the main objective of a sales manager in the context of managerial economics?
To sell a maximum amount of goods with minimum advertisement costs.
p.2
Application of Economic Theories in Business
What are the key areas of focus in managerial economics?
Decision making under certainty, resource allocation, cost-benefit analysis, and market analysis and forecasting.
p.10
Fundamentals of Economics
What does dynamic economics study?
The process by which equilibrium is achieved, including both equilibrium and disequilibrium.
p.3
Nature and Scope of Managerial Economics
What is the definition of Managerial Economics according to M. H. Spencer and Louis Siegelman?
The integration of economic theory with business practice for facilitating decision making and forward planning by management.
p.6
Theory of Production and Production Decisions
What is the goal of the theory of production?
Maximizing output to meet customer demand.
p.8
Application of Economic Theories in Business
What happens to utility as a consumer reaches the point of satiety?
The utility of the good begins to diminish.
p.2
Fundamentals of Economics
What does economics study?
The production, distribution, and consumption of goods and services.
p.2
Role of Managers in Decision Making
How does managerial economics assist managers?
By guiding decisions related to customers, competitors, suppliers, and internal operations.
p.1
Introduction to Managerial Economics
What does managerial economics help managers address in their daily activities?
Issues such as quantity to supply, pricing, production methods, and profit maximization.
What factors does the theory of demand consider?
Needs, wants, preferences, and requirements of consumers.
p.12
Measurement of National Income
What are the two ways to measure NNP and NDP?
At constant prices (real income) or market prices (nominal income).
p.1
Fundamentals of Economics
How is economics defined in the context of human activity?
As the study of production, consumption, and distribution of goods and services.
p.2
Nature and Scope of Managerial Economics
Who popularized the term 'Managerial Economics' in the USA?
Joel Dean with the publication of his book in 1951.
p.5
Microeconomics vs. Macroeconomics in Business
What is the role of microeconomics in operational issues?
To resolve internal issues arising in business operations.
p.3
Nature and Scope of Managerial Economics
What does Managerial Economics deal with?
Economic aspects of managerial decisions and those managerial decisions that have an economic context.
p.7
Methods of Economic Analysis
What is a key characteristic of the deductive method?
It moves from general facts to particular assumptions and builds theories.
p.14
Measurement of National Income
What does 'G' represent in the national income equation?
Government’s expenditure on final consumer goods.
p.6
Macro - Economics Applied to Business Environment
What are the three classifications of the business environment?
Economic, social, and political environments.
p.8
Methods of Economic Analysis
What is a limitation of the deductive method regarding reality?
It can be imaginative and far from reality, leading to utopic solutions.
p.10
Scarcity and Choice in Economics
Why is the allocation of time important in economics?
It affects decisions on how many hours to work and play, which is fundamental to the labor market.
p.4
Application of Economic Theories in Business
How does managerial economics help businesses?
By making operations more efficient and effective, ensuring wise resource use and goal achievement.
p.12
Measurement of National Income
What is National Income?
The total value of final goods and services produced by normal residents during an accounting year, after adjusting for depreciation.
p.12
Measurement of National Income
What is excluded from the calculation of National Income?
Taxes, depreciation, and non-factor inputs (raw materials).
p.5
Principles of Management
What is the aim of managerial economics as a prescriptive discipline?
Goal achievement and dealing with practical situations or problems.
p.10
Fundamentals of Economics
What does static economics study?
Only a particular point of equilibrium.
p.13
Measurement of National Income
What are the three main methods to measure national income?
Income Method, Production (Value-Added) Method, and Expenditure Method.
p.2
Role of Managers in Decision Making
What is the significance of forecasting in managerial decisions?
It involves making decisions about the future, which includes levels of risk and uncertainty.
p.10
Fundamentals of Economics
How does static analysis differ from dynamic analysis in terms of reality?
Static analysis is far from reality, while dynamic analysis is nearer to reality.
p.3
Nature and Scope of Managerial Economics
How do E. F. Brigham and J. L. Pappas define Managerial Economics?
As the applications of economics theory and methodology to business administration practice.
p.1
Fundamentals of Economics
What is the focus of economic activities?
Earning and spending money to satisfy wants such as food, clothing, and shelter.
p.2
Nature and Scope of Managerial Economics
According to Prof. Evan J Douglas, what does managerial economics seek to establish?
Rules and principles to facilitate the attainment of desired economic goals of management.
p.10
Fundamentals of Economics
What is the relationship between static and dynamic approaches in economic analysis?
They are not competitive but complementary to each other.
p.8
Methods of Economic Analysis
How does the deductive method ensure accurate results?
It includes logical reasoning on the part of the economist or analyst.
p.1
Principles of Management
What are the key functions of management?
Planning, organizing, staffing, directing, and controlling.
p.13
Measurement of National Income
How do you calculate GNP at Market Price?
GNP at MP = GDP at MP + Net Factor Income from Abroad (NFIA).
p.12
Measurement of National Income
What does National Income represent in terms of Net National Product?
It is Net National Product (NNP) at Factor Cost (FC).
p.4
Role of Managers in Decision Making
What skills are required in managerial economics?
Logical thinking and creative skills for decision making and problem-solving.
p.4
Fundamentals of Economics
Why is managerial economics considered a science by some economists?
Because it involves the application of different economic principles, techniques, and methods to solve business problems.
p.12
Measurement of National Income
How is Domestic Income related to National Income?
Domestic Income + NFIA = National Income.
p.1
Introduction to Managerial Economics
What two disciplines does managerial economics combine?
Economics and Management.
p.5
Application of Economic Theories in Business
What approach does managerial economics take towards business problems?
A practical and logical approach.
p.12
Measurement of National Income
What are the three methods to measure National Income?
The text does not specify, but generally includes production, income, and expenditure methods.
p.7
Methods of Economic Analysis
What is the deductive method in economic analysis?
A method that involves assuming factual information and using logical reasoning to arrive at a conclusion.
p.13
Measurement of National Income
What does the Production Method estimate?
By adding the value added by all firms.
p.8
Methods of Economic Analysis
What is a key advantage of the deductive method in economics?
It removes the need for experimentation.
p.14
Measurement of National Income
What does 'C' stand for in the national income equation?
Private Sector’s Expenditure on final consumer goods.
p.2
Methods of Economic Analysis
What role do economic frameworks play in managerial economics?
They assist organizations in making rational, progressive decisions by analyzing practical problems.
p.7
Methods of Economic Analysis
What is an example of a common assumption in the deductive method?
Businessmen strive for maximum profits by buying materials at a cheaper cost.
p.14
Measurement of National Income
What does 'I' signify in the national income equation?
Investment or Capital Formation.
p.13
Measurement of National Income
What is the formula to find NNP at Market Price?
NNP at MP = GNP at MP - Depreciation.
p.3
Role of Managers in Decision Making
What aspects does Managerial Economics analyze for decision-making?
Market demand, costs and benefits.
p.8
Methods of Economic Analysis
What are the two forms through which the inductive method is carried out?
Statistics and experimentation.
p.9
Methods of Economic Analysis
What is a key challenge of the inductive method?
It is often difficult to gather and access the facts required for experiments.
p.5
Application of Economic Theories in Business
Why is it essential for managers to analyze macroeconomic factors?
To understand their impact on the organization.
p.1
Introduction to Managerial Economics
What is the primary goal of an engineer in a manufacturing organization according to managerial economics?
To produce maximum quantity of goods of a given quality at a reasonable cost.
p.12
Measurement of National Income
What is Domestic Income?
The total value of final goods and services produced within a domestic territory during an accounting year, after adjusting for depreciation.
p.4
Microeconomics vs. Macroeconomics in Business
What aspect of economics does managerial economics primarily focus on?
Problems related to a particular organization, making it a part of microeconomics.
p.5
Role of Managers in Decision Making
How does managerial economics assist managers?
By providing tools to deal with business-related problems and uncertainties.
p.7
Methods of Economic Analysis
What is the primary aim of economic analysis?
To determine the effectiveness of operations within an economy.
p.13
Measurement of National Income
How is national income estimated using the Income Method?
By adding all factors of production (rent, wages, interest, profit) and mixed income of self-employed.
p.5
Microeconomics vs. Macroeconomics in Business
How does both micro and macroeconomics impact business?
They equally affect the functioning of the business.
p.6
Pricing Theory and Analysis of Market Structure
What does pricing theory analyze?
Price determination of a product considering competitors and market conditions.
p.14
Measurement of National Income
What does 'Y' represent in the national income equation?
GDP at Market Price (MP).
p.2
Nature and Scope of Managerial Economics
How does Edwin Mansfield define managerial economics?
As the application of economic concepts and analysis to the problems of formulating rational managerial decisions.
p.3
Role of Managers in Decision Making
What are the four main phases of the decision-making process in Managerial Economics?
1. Determining and defining objectives. 2. Collection and analysis of data. 3. Developing and analyzing possible courses of action. 4. Selecting a particular course of action.
p.7
Methods of Economic Analysis
What is one merit of the deductive method?
It is simple and convenient, being observation-based and easy to practice.
p.14
Measurement of National Income
What do 'X' and 'M' represent in the national income equation?
'X' is Exports and 'M' is Imports.
p.15
Measurement of National Income
Who made the first scientific estimate of National Income in India?
Prof V K R V Rao in 1931-32.
p.6
Methods of Economic Analysis
What are the two types of economic study?
Deductive Method and Inductive Method.
p.11
Scarcity and Choice in Economics
How do traditional economists view people's choices over scarce resources?
As simple, objective, and rational calculations.
p.8
Methods of Economic Analysis
Why is the inductive method considered verifiable?
Because it deals with quantities.
p.9
Methods of Economic Analysis
What is the origin of the deductive method?
Used by those believing in classical theories.
p.11
Fundamentals of Economics
What are the main components of the circular flow model?
Households, businesses, governments, and the banking system.
p.9
Methods of Economic Analysis
What is the scope of the inductive method?
Works under the science model.
p.5
Microeconomics vs. Macroeconomics in Business
What external environment does a business function in?
The market, which is part of the economy as a whole.
p.5
Fundamentals of Economics
What disciplines does managerial economics draw tools and principles from?
Accounting, finance, statistics, mathematics, production, operations research, human resources, marketing, etc.
What does the theory of demand emphasize?
The consumer’s behavior towards a product or service.
p.7
Methods of Economic Analysis
What is economic analysis?
The investigation of a particular topic from the perspective of an economist, including processes like production, consumption, and employment.
p.6
Theory of Production and Production Decisions
What is the main focus of the theory of production?
Volume of production, process, capital, and labor required.
p.7
Methods of Economic Analysis
What are the two types of economic analysis?
Deductive Method and Inductive Method.
p.10
Fundamentals of Economics
What assumptions does static analysis rely on?
Unrealistic assumptions of perfect competition and perfect knowledge.
p.3
Nature and Scope of Managerial Economics
What are the two main roles of Managerial Economics?
1. Provides tools and techniques for decision-making. 2. Shows the interaction between various areas in which the firm operates.
p.7
Methods of Economic Analysis
What are the three stages of the deductive method?
Observation, Logical reasoning, Experimentation.
p.13
Measurement of National Income
How is value added calculated?
Value of Output minus Value of non-factor inputs.
p.6
Theory of Capital and Investment Decisions
What critical factor does the theory of capital and investment decisions focus on?
Proper allocation of the organization’s capital.
p.10
Scarcity and Choice in Economics
What does scarcity refer to?
The finite nature and availability of resources.
p.15
Measurement of National Income
Who made the first rough estimate of National Income in India?
Dadabhai Naoroji in 1867-68.
p.3
Role of Managers in Decision Making
What does Managerial Economics provide to managers?
Valuable tools and techniques to make smart, strategic decisions.
p.6
Nature and Scope of Managerial Economics
What is the role of managerial economics?
To determine business goals and targets and assess the organization's position.
p.14
Measurement of National Income
Are sales and purchases of old goods included in national income?
No, they are not included unless through an IPO.
p.11
Application of Economic Theories in Business
How do marketing teams use the concepts of scarcity and choice?
By creating the impression of scarce supply to influence consumer behavior.
p.15
Measurement of National Income
What merger occurred involving the CSO?
CSO merged with the National Sample Survey Organization to form the National Statistical Organization.
p.11
Fundamentals of Economics
In the circular flow of the economy, how does money flow?
Money is used to purchase goods and services, flowing in one direction while goods and services flow in the opposite direction.
p.9
Microeconomics vs. Macroeconomics in Business
What does static economic analysis indicate about change?
It does not show the path of change, only the conditions of equilibrium.
p.1
Principles of Management
What is management defined as?
The science and art of getting things done through people in formally organized groups.
p.3
Nature and Scope of Managerial Economics
What is the primary focus of Managerial Economics?
Tools and techniques useful in decision-making.
p.8
Methods of Economic Analysis
What is a major disadvantage of the deductive method?
It is assumption-based, which can lead to invalid solutions.
p.10
Scarcity and Choice in Economics
How do individuals and society allocate scarce resources?
Through choices about sharing and using those resources.
p.15
Measurement of National Income
What was the title of Dadabhai Naoroji's book that discussed National Income?
Poverty and Unbritish Rule in India.
p.13
Measurement of National Income
How is NNP at Factor Cost calculated?
NNP at FC = NNP at MP - Net Indirect Taxes (NIT).
p.11
Scarcity and Choice in Economics
What does the basic principle of supply and demand state about rare items?
The price of a rare item will be higher than that of a common one.
p.15
Measurement of National Income
Which ministry oversees the National Statistical Office?
Ministry of Statistics and Programme Implementation.
p.9
Methods of Economic Analysis
What is the scope of the deductive method?
Works under the social science model.
p.6
Macro - Economics Applied to Business Environment
How does the economic environment affect businesses?
Through economic conditions, GDP, and economic policies.
p.8
Methods of Economic Analysis
What does the inductive method involve?
Progressing from a practical outlook to a scientific problem.
p.10
Scarcity and Choice in Economics
What two aspects are relevant to the study of scarcity?
Efficiency of allocation and equity (distributive fairness).
p.8
Methods of Economic Analysis
What is a merit of the inductive method?
It is very practical and applicable, being simply descriptive.
p.9
Methods of Economic Analysis
How can the inductive method be effectively used?
It can be combined with deductive methods or deductive reasoning.
p.15
Measurement of National Income
What does the National Statistical Office publish annually?
National Accounts Statistics.
p.9
Methods of Economic Analysis
What are other names for the deductive method?
Analytical, priori or abstract method.
p.9
Methods of Economic Analysis
What type of results does the deductive method yield?
Confirmation of the making of the hypothesis.
p.9
Microeconomics vs. Macroeconomics in Business
How does dynamic economics differ from static economics in terms of time?
In dynamic economics, all quantities must be dated and refer to different points of time.
p.14
Measurement of National Income
What are net exports in the context of the national income equation?
Net Exports are calculated as X - M.
p.14
Measurement of National Income
What is included in national income?
Goods produced for self-consumption and estimated rent of self-occupied property.
p.8
Methods of Economic Analysis
What is a disadvantage of the inductive method related to analyst judgment?
If analysts lack balanced judgment, they may extract insufficient data.
p.11
Application of Economic Theories in Business
What is the purpose of campaign statements like 'Buy it while it lasts!'?
To influence consumer choice through perceived scarcity.
p.9
Microeconomics vs. Macroeconomics in Business
What is a key characteristic of static economic analysis regarding time?
In static economics, all economic variables refer to the same point of time.
p.15
Measurement of National Income
What organization currently estimates National Income in India?
The National Statistical Office (NSO).
p.9
Methods of Economic Analysis
What is the origin of the inductive method?
Used by those who believe in Neo-classical theories.
p.11
Fundamentals of Economics
What does the circular flow model illustrate?
Where money goes and what it's exchanged for in the economy.
p.9
Methods of Economic Analysis
What are other names for the inductive method?
Historical, empirical or posterior method.
p.9
Methods of Economic Analysis
How is the structure of the deductive method described?
Highly structured method.
p.9
Microeconomics vs. Macroeconomics in Business
How is dynamic economics metaphorically described?
As a 'movie' of the market.
