JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD MBA 2022 BUSINESS ECONOMICS Previous Question Paper (May - 2022 - R19)
Answer any five questions. All questions carry equal marks.
Main
How is business economics different from traditional economics? What are the various disciplines contributing to the richness of business economics?
Answer
Business economics, or managerial economics, applies economic theory and quantitative methods to business decision-making, whereas traditional economics focuses on theoretical models and the analysis of broad economic phenomena. The primary difference lies in the application: traditional economics is largely normative and abstract, focusing on how markets function in theory, while business economics is pragmatic and prescriptive, focusing on how a specific firm can optimize its goals within a given environment.
Business economics draws from several disciplines to enhance its analytical power:
- Mathematics and Statistics: Essential for quantitative analysis, forecasting, and modeling firm behavior.
- Accounting: Provides the financial data necessary for cost-benefit analysis and performance evaluation.
- Management Theory: Helps in understanding organizational structure, decision-making processes, and human resource allocation.
- Operations Research: Utilizes optimization techniques to solve complex production and logistics problems.
- Psychology and Sociology: Offer insights into consumer behavior, market trends, and internal organizational dynamics.
What role does business economist play in corporates?
Answer
A business economist serves as a strategic advisor who bridges the gap between economic theory and corporate practice. Their primary roles include:
- Forecasting: Analyzing market trends and economic indicators to predict future demand, sales, and industry conditions.
- Pricing Strategy: Determining optimal pricing models based on elasticity, competition, and cost structures.
- Resource Allocation: Advising management on the most efficient use of capital, labor, and raw materials to maximize profitability.
- Policy Analysis: Evaluating the impact of government regulations, tax changes, and international trade policies on the firm's operations.
- Risk Management: Identifying potential economic risks and developing strategies to mitigate their impact on corporate performance.
A firm develops a new product that will add Rs.50 lakhs to profit each year for five years. If the discount rate is 10 percent per year, how much will this new product add to share holders value?
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What is the law of diminishing marginal utility? Explain.
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Explain the terms i) derived demand and ii) Autonomous demand.
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The international price of oil is $100 per barrel and the price elasticity is constant and equal to -0.5. An oil embargo reduces the quantity available by 20 percent. Use the arc elasticity formula to calculate the percentage increase in the price of oil.
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Briefly enumerate the various approaches to demand forecasting.
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What is short run cost analysis? What purpose would it serve?
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How do you differentiate economies of scope from economies of scale?
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What are isoquants? What are their characteristics?
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A firm sells each unit of its output for Rs.10. It has FC of Rs.10,000 and variable cost of Rs.6. It wishes to earn a profit of Rs.20,000. How much should it produce?
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A perfectly competitive industry making fishing nets faces the following demand and cost functions:
Demand function: Q = 800 — P.
Total cost function for the industry:
The cost function of each firm and the industry is the same. Work out the equilibrium industry output and price.
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How does peak load pricing improve resource allocation?
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Is price bundling a sort of price discrimination? Discuss.
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