BA9202 Economic Analysis For Business MBA Question Bank : sriengg.com
Name of the College : Srinivasan Engineering College
University : Anna University
Department : Management Studies
Degree : MBA
Subject Code/Name : BA9202 Economic Analysis For Business
Year : 1st
Semester : 1st
Document Type : Question Bank
Website : sriengg.com
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Question Bank Part-A : https://www.pdfquestion.in/uploads/sr…CS-2-MARKS.pdf
Question Bank Part-B : https://www.pdfquestion.in/uploads/sr…-marks-Qns.pdf
Srinivasan Economic Analysis For Business Question Paper
1. Define consumer behavior :
Consumer behavior is the study of when, why, how, and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people’s wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.
Related : Srinivasan Engineering College Organisational Behaviour MBA Question Bank : www.pdfquestion.in/3248.html
2. What is consumer equilibrium? :
When consumers make choices about the quantity of goods and services to consume, it is presumed that their objective is to maximize total utility. In maximizing total utility, the consumer faces a number of constraints, the most important of which are the consumer’s income and the prices of the goods and services that the consumer wishes to consume. The consumer’s effort to maximize total utility, subject to these constraints, is referred to as the consumer’s problem. The solution to the consumer’s problem, which entails decisions about how much the consumer will consume of a number of goods and services, is referred to as consumer equilibrium.
3. Define microeconomics :
Branch of economics concerned with the behavior of individual entities such as markets, firms, and households.
4. Define macroeconomics :
The branch of economics concerned with the overall performance of the economy.
5. What is market mechanism? :
The market mechanism allows an economy to simultaneously solve the three economic problems of what, how, and for whom. Consumers indicate their preferences over what is produced through their willingness to pay for a good or service. Firms respond to this by considering the mix of final products that will maximize their own profits, that is, the difference between their revenues from sales and their production costs.
6. Define demand schedule :
When economists refer to the law of downward-sloping demand, they are speaking of a particular kind of behavior among buyers that is observed with so few exceptions that it can be designated as a “law” of behavior.
7. Define supply schedule :
The supply schedule (and supply curve) for a commodity shows the relationship between its market price and the amount of that commodity that producers are willing to produce and sell, other things being held equal.
8. What is equilibrium of supply and demand? :
The division between buyers and sellers is nearly absolute. In all but a very few exceptional cases, economic forces directly influence either the demand side of a market or the supply side of a market, but not both.
9. Define utility and marginal utility :
Utility measures the want-satisfying power of a good or service. Marginal utility is the rate at which utility changes as each additional unit of a particular good is consumed. As with other marginal concepts, marginal utility measures the change in a total value when an additional unit of something else is used.
10. What is law of diminishing utility? :
The law of diminishing marginal utility holds that as the amount of good consumed increases, the marginal utility of that good tends to diminish. That is, the more you have of any one thing, the less an additional unit of it is worth to you. These ties nicely into the paradox of value discussed later in the chapter. People are not willing to pay much for an additional gallon of water because they have so much of it that an additional gallon has a low marginal utility.
11. What is paradox of value? :
The paradox of value addresses the somewhat counterintuitive observation that water costs less than diamonds in spite of the fact that water sustains life and diamonds are often simply decorative. This can be explained by the fact that water is relatively abundant, and hence in great supply, but diamonds are relatively scarce. Note that the total utility from water is greater than the total utility from diamonds.
12. Define consumer surplus :
Consumer surplus represents the difference between what people would have been willing to pay for a given quantity of some good, one unit at a time, and how much they actually had to pay in a market quoting one price for all units.
13. Define production function :
A production function describes a relationship between total product or output of a firm and the employment of inputs.
14. Define perfectly competitive industry :
A perfectly competitive industry is characterized by many small firms, each so small that no single firm can affect market price. Firms produce a homogeneous product so that consumers view all firms’ outputs as perfect substitutes. Together, these two characteristics lead individual firms to perceive demand as perfectly elastic. Finally, competitors can easily enter or exit the industry.
15. What is allocative efficiency? :
Allocative efficiency occurs when no possible reorganization of production can make anyone better off without making someone else worse off. This means that there can be no reallocation of resources without lowering the utility of at least one person in the economy.