Jawaharlal Nehru Technological University Hyderabad
Jawaharlal Nehru Technological University Hyderabad B.Tech III MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS Previous Question Paper (August - 2022 - R13)
Answer any Five Questions. All Questions Carry Equal Marks.
Main
What is managerial economics? What is its significance in smooth running of a business?
Answer
Managerial economics is the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management. It applies microeconomic tools and techniques to solve practical business problems, such as pricing, production, and resource allocation.
Its significance in the smooth running of a business includes:
- Efficient Decision Making: It provides a logical framework for choosing the best course of action among various alternatives, reducing uncertainty.
- Resource Allocation: It helps in the optimal distribution of scarce resources like capital, land, and labor to maximize output and minimize costs.
- Demand Forecasting: By analyzing market trends and consumer behavior, it enables firms to predict future demand, assisting in production planning and inventory management.
- Profit Management: It provides techniques for cost-benefit analysis and pricing strategies that ensure the firm remains profitable and competitive.
- Strategic Planning: It assists management in understanding the external environment, such as market competition and government policies, to formulate long-term growth strategies.
What do you understand by changes in Quantity Demanded vs Changes in Demand?
Answer
In economics, the distinction between a change in quantity demanded and a change in demand is fundamental to understanding market dynamics.
Change in Quantity Demanded: This refers to a movement along the same demand curve caused solely by a change in the price of the commodity itself, while other factors (like income, tastes, or prices of related goods) remain constant. It is categorized as either an expansion (when price falls) or a contraction (when price rises) of demand.
Change in Demand: This refers to a shift of the entire demand curve, either to the right (increase) or to the left (decrease). This occurs when factors other than the price of the commodity change, such as changes in consumer income, preferences, population, or the prices of substitute or complementary goods. In this case, the quantity demanded changes even if the price of the commodity remains the same.
Why demand forecasting important for a manager and describe different methods of demand forecasting.
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Discuss the nature, scope of managerial economics and brief on law of demand.
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Explain the concept of MRTS.
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A company has fixed costs of Rs.300,000 and produces one product with a selling price of Rs.72 and a variable cost of Rs.42 per unit. The maximum factory capacity is 20,000 units and it anticipates selling 15,000 units. Construct a break-even chart showing the break-even point and the margin of safety at present. How much profit will they make if sales increase to the maximum that the factory can supply?
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Explain Production function while describing three stages of production with suitable diagram.
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XYZ firm has a fixed cost of Rs.600000; selling price per unit is Rs.400/- and variable cost per unit is Rs.200/- present level of production is 30000 units. Calculate BEP in terms of volume and sales value and P/V ratio.
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Explain types of different market structure based on competition and brief on price output determination under perfect competition.
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What is a public enterprise? Explain the features of public enterprises.
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Compare Oligopoly and Monopoly type market structure.
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Discuss changing business environment in post-liberalization scenario. How do you see entrepreneurial culture fare in our country?
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What is capital? What are various sources of raising long-term capital?
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ABC company is expanding its operations and wants to open a new plant costing Rs.6,00,000. The company expects varying annual net cash flows as follows; Year 1- Rs.1,20,000; Year 2- Rs.1,50,000; Year 3- Rs.1,60,000; Year 4- Rs.1,70,000; Year 5- Rs.1,00,000. Calculate the payback period and calculate the Net Present Value for above data. (Assume the company expected 15% rate of return).
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What is ratio analysis? Discuss the significance of capital structure and profitability ratios.
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The following entries come from the ledger of ABC Company. Prepare a trial balance.
| Equipment | Rs. 88000 |
| Owner’s Drawings | Rs. 8000 |
| Accounts Payable | Rs. 22000 |
| Notes Payable (due in 3 months) | Rs. 19000 |
| Accounts Receivable | Rs. 4000 |
| Service Revenue | Rs. 95000 |
| Owner’s Capital | Rs. 20000 |
| Salaries and Wages Payable | Rs. 2000 |
| Salaries and Wages Expense | Rs. 42000 |
| Utilities Expense | Rs. 3000 |
| Prepaid Insurance | Rs. 6000 |
| Cash | Rs. 7000 |
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