Practice test managerial economic
For this purpose, he should join professional and trade associations and take an active part in them.
Managerial economics questions and answers for mba pdf
The other most important responsibility of a managerial economist is to try to make as accurate forecast as possible. Subject Matter of Marginal Economics 7. In decision making, cost estimates are very essential. We begin with the fundamental financial accounting concepts and principles upon which modern accounting is based. Business decisions are greatly influenced by pervading market structure and the structure of markets that has been evolved by the nature of competition existing in the market. The roots of managerial economics spring from micro-economic theory. Estimating Demand. Hence managerial economics is economics applied in decision making. Thus micro-economics gives a microscopic view of the economy. There are several areas which have attracted the attention of the managerial economist, such as maximising profit, reducing stocks, forecasting sales, etc. Statistical methods are used for such comparison among past, present and future estimates. It also makes use of well known models in price theory such as the model for monopoly price, the kinked demand theory and the model of price discrimination. To conclude, a managerial economist should enlarge the area of certainty. The advisory service refers to the opportunities open to the managerial economist because of the growing role of government in business life. He is simply concerned with the problem of resources in relation to the ends desired.
For example, sampling is very useful in data collection. A model is an abstraction from reality. Subject Matter of Marginal Economics 7. Expenditure on advertising and related types of promotional activities is called selling costs by economists.
Managerial economics important questions for degree
Production is an organised activity of transforming inputs into output. The best descriptive studies are observational in nature. Applications of Cost Theory. The process of production adds to the values or creation of utilities. Managerial Economics and Economics: Managerial Economics has been described as economics applied to decision making. To some extent, the descriptive method is also concerned with the interpretation of data. The experimental method may be usefully applied to those aspects of managerial behaviour which call for accurate and logical thinking. An element of cost uncertainty exists because all the factors determining costs are not always known or controllable. It is the application of economic analysis to evaluate business decisions. If the level of inventory is low, production will be affected. This method is used to describe the organisation and functioning of institutions and the policies which have economic significance. Organisationally, a managerial economist is placed nearer to the policy maker simple because his main role is to improve the quality of policy making as it affects short term operation and long range planning.
Robbins regards economics as a pure science of what is, which is not concerned with moral or ethical questions. A model may be in the form of diagram, a verbal description or a mathematical description. If the inventory level is very low, it hampers production.
Define economics 2. Answer to these and similar questions will throw more light on the perspective business and these questions present some of the areas where a managerial economist can make effective contributions through scientific decision making.
If it is high, capital is unproductively tied up.
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