Subject Code: IMT-20 Subject Name : MANAGERIAL ECONOMICS Notes:…


Subject Code: IMT-20 Subject Name : MANAGERIAL ECONOMICS Notes: a. Write exculpations in your own articulation as far as likely and hold from visioning from the passage books/handouts. b. Answers of Ist Set (Part-A), IInd Set (Part-B), IIIrd Set (Part – C) and Set-IV (Case Study) must be sent contemporaneously. c. Mail the exculpation sheets alongdelay the vision of assignments for evaluation & recompense. d. Simply operative written assignments shall be legitimate. A. Leading Set of Assignments: 5 Questions, each inquiry carries 1 marks. B. Second Set of Assignments: 5 Questions, each inquiry carries 1 marks. C. Third Set of Assignments: 5 Questions, each inquiry carries 1 marks. Confine your exculpations to 150 to 200 Words. D. Forth Set of Assignments: Two Occurrence Studies : 5 Marks. Each occurrence examine carries 2.5 marks. Objective: 1. The concrete of the Nursing Dissertation is to expound the concepts of applied microeconomics. 2. The substance shall be on doctrine of the sturdy, consumer call-for, negotiate regularity, origination distributeition, doctrine of require, consummate budgeting and waste distributeition. Contents INTRODUCTION TO MANAGERIAL ECONOMICS The Basic Problems of an Economy, Meaning and Nature of Managerial Economics, How Economics Contributes to Managerial Functions, Major Areas of Economics Applied to Solicitude Decisions, The Object of Managerial Economics ECONOMIC PRINCIPLES AND CONCEPTS APPLIED Marginalism and Incrementalism, The Equi-final Principle, Time Perspective in Solicitude Decisions, Opportunity Cost, The Concept of Offer Value of Money and Discounting Principle, Concept of Externalities, Concept of Trade-off THE FUNDAMENTAL LAWS OF MARKET: THE LAWS OF DEMAND AND SUPPLY The Law of Demand: Price-Demand Relationship, The Call-for Function, Types of Demand, The Law of Supply, Equilibrium of Call-for and Supply: Determination of Equilibrium Appraisement ELASTICITY OF DEMAND AND SUPPLY Appraisement Elasticity of Demand, Determinants of Appraisement Elasticity of Demand, Appraisement Elasticity and Final Revenue, Promotional or Advertisement Elasticity of Sales, Cross-elasticity of Demand, Income Elasticity of Demand, Elasticity of Appraisement Expectations, The Uses of Elasticity, Appraisement Elasticity of Supply THEORY OF CONSUMER DEMAND: CARDINAL UTILITY APPROACH Cardinal Utility Theory, The Law of Diminishing Final Utility, Consumer’s Equilibrium, Derivation of Call-for Curve, Drawbacks of Cardinal Path THEORY OF CONSUMER DEMAND: ORDINAL UTILITY APPROACH The Meaning and Nature of Insensibility Curve, The Diminishing Final Reprimand of Substitution, Properties of Insensibility Curves, The Budget Constraint and the Budget Line, Consumer’s Equilibrium, Effect of Change in Consumer’s Income, Effects of Appraisement Change, Income and Substitution Effects of Appraisement Change on Inferior Goods, Complementarity and Substitutability, The Corner Solution: The Extreme Choice, Derivation of Individual Call-for Curve, Comparison of Cardinal and Ordinal Utility Approaches, Critique of Insensibility Flexion Approach, Samuelson’s Revealed Preference Doctrine Managerial Economics............................................. Page 1 of 4 ...............................................................................IMT-20 Managerial Economics............................................. Page 2 of 4 ...............................................................................IMT-20 DEMAND FORECASTING The Need for Call-for Forecasting, Methods of Call-for Forecasting, Survey Methods, Statistical Methods. THEORY OF PRODUCTION–I: PRODUCTION WITH ONE VARIABLE INPUT Meaning of Production, Some Origination Related Concepts, Origination Function, The Laws of Origination THEORY OF PRODUCTION–II: PRODUCTION WITH TWO VARIABLE INPUTS Isoquant Curves, Final Reprimand of Technical Substitution, Properties of Isoquant Curves, Isoquant Map and Economic Region, Optimum Combination of Inputs, Other Forms of Isoquants, Elasticity of Substitution, Laws of Profits to Scale: Long Run, Partition of Production, Experimental Origination Functions THEORY OF PRODUCTION COST Require Concepts, Short-run Cost-Output Relations, Long-Run Cost-Output Relations, Economies of Scale: why lac decreases, Diseconomies of Scales;Why LAC Increases, Require Functions and Require Curves, Modern Path to the Doctrine of Cost, Economies of object MARKET STRUCTURE AND OBJECTIVES OF BUSINESS FIRMS Objectives of Solicitude Firms, Profit Maximization, Alternative Objectives of Solicitude Firms PRICE AND OUTPUT DETERMINATION UNDER PERFECT COMPETITION The Negotiate Structure, The Features of Impeccable Competition, Equilibrium of the Firm, , Derivation of Supply Flexion of the Firm, Derivation of Supply Flexion of the Industry, Appraisement and Output Determination Underneath Impeccable Competition, Appraisement and Output Determination in the Long-run, Long-run Supply Flexion of a Competitive Perseverance PRICE AND OUTPUT DETERMINATION UNDER MONOPOLY Monopoly: Definition and Sources, Call-for and Produce Curves Underneath Monopoly, Require and Supply Curves Underneath Monopoly, Profit Maximisation belowneathneathneath Monopoly, Why Absence of Supply Flexion Underneath Monopoly, Monopoly Vs. Impeccable Competition: Comparison of Long-run Appraisement and Output, Appraisement Discrimination by Monopoly, Measures of Monopoly Power PRICE AND OUTPUT UNDER MONOPOLISTIC COMPETITION Monopolistic Two-of-a-trade and Its Features, Foundations of the Monopolistic Two-of-a-trade Model, Appraisement and Output Determination Underneath Monopolistic Competition, Partition of Selling Require and Firm’s Equilibrium, Critical Appraisal of Chamberlin’s Doctrine of Monopolistic Two-of-a-trade PRICE AND OUTPUT DETERMINATION UNDER OLIGOPOLY Oligopoly: Meaning and Characteristics, Duopoly Models, Oligopoly Models, The Game Doctrine Path to Oligopoly ALTERNATIVE THEORIES OF THE FIRM Baumol’s Doctrine of Sales Produce Maximization, Marris’s Doctrine of Maximization of Growth Rate, Maximization of Managerial Utility Function: Williamson’s Model, The Behavioural Design of Cyert and March, Conventional vs Alternative Theories of Sturdy PRICING STRATEGIES AND PRACTICES Cost-Plus Pricing, Bain’s Design of Limit Pricing, Multiple Fruit Pricing, Pricing in Life Cycle of a Product, Pricing in Relation to Established Products, Remove Pricing, Competitive Bidding of Price, Peak Load Pricing CAPITAL BUDGETING AND INVESTMENT UNDER CERTAINTY Consummate Budgeting, Determining the Optimum Roll of Capital, Investment Decisions belowneathneathneath Certainty, Sources and Require of Consummate INVESTMENT DECISIONS UNDER RISK AND UNCERTAINTY Concepts of Waste and Uncerainty, Investment Decisions Underneath Risk, Investment Decisions Underneath Uncertainty Reference: 1. Dholakia R.H., Oza A.N., Micro Economics for Treatment Students, OUP, Delhi – 1997 2. Koutsoyiannis A, Modern Micro Economics, Mac Millan Press Ltd. 3. Gupta G.S., Managerial Economics, Tata McGraw Hills 1998 4. Henderson James M. & Quant L.E. Micro Economic Theory, A Mathematical path, McGraw-Hill International Edition. Managerial Economics............................................. Page 3 of 4 ...............................................................................IMT-20 ASSIGNMENTS FIRST SET OF ASSIGNMENTS Assignment-I = 5 Marks PART– A 1. Discuss the conformity among economics and treatment employments. How does the anterior give to the latter? 2. Expound the call-for employment delay the acceleration of examples. Draw mismisappropriate graphs where required. 3. What do you belowneathneathstand by appraisement elasticity of call-for? Analyse the conformity among appraisement elasticity and final produce. 4. Discuss the Cardinal Utility Theory. How do the cardinalists draw the call-for flexion? What are its drawbacks? 5. What do you belowneathneathstand by insensibility flexions? How are they drawd? Describe their properties. SECOND SET OF ASSIGNMENTS Assignment-II = 5 Marks PART– B 1. Expound the statistical methods of anticipation call-for. 2. Discuss isoquant flexions and isoquant maps. 3. Analyse the conformity among output and per individual requires in the defective run. 4. What are the pre-eminent concretes that solicitude sturdys affect to close that solicitude an economist? 5. What is meant by monopolistic two-of-a-trade? Expound and critically analyse Chamberlin's doctrine of monopolistic two-of-a-trade. THIRD SET OF ASSIGNMENTS Assignment-III = 5 Marks PART– C 1. What do you belowneathneathstand by duopoly? Expound Cournot's duopoly design. 2. Why is a accurately competitive sturdy unshaken a appraisement taker and a monopolist a appraisement creator? 3. Write a music on remove pricing. 4. Define consummate budgeting. Examine how the optimum roll of consummate is unshaken. 5. Discuss the methods of making investment decisions belowneathneathneath stipulations of waste. FOURTH SET OF ASSIGNMENTS Assignment-IV = 2.5 Each Occurrence Examine CASE STUDY - I In 1997, balance $700 billion purchases were arraignd on faith cards, and this completion is increasing at a reprimand of balance 10 per cent a year. At guideing conjecture, the faith card negotiate would appear to be a rather fast perseverance. Visa, MasterCard and American Express are the most well-acquainted names, and balance 60 per cent of all jaw are made using one of these three cards. But on closer Nursing essay, the perseverance appears to teach most characteristics of impeccable two-of-a-trade. Consider guideing the capaciousness and division of buyers and dispose-ofers. Although Visa, Mastercard and American Express are the choices of the seniority of consumers, these cards do not create from proportioned three sturdys. In levelt, there are balance six thousand penetrateprises (largely banks and faith combinations) in the US that propose arraign cards to balance 90 favorite faith card holders. One person's Visa card may feel been issued by his company's faith combination in Los Angeles, timeliness a instant door neighbour may feel acquired hers from a Miami Bank when she was buttress in Florida. Managerial Economics............................................. Page 4 of 4 ...............................................................................IMT-20 Creditcards are a relatively homogenous fruit. Most Visa cards are common in arrival, and they can all be used for the selfselfidentical purposes. When the arraign is made, the trader is incredible to mark who it was that explicitly issued the card. Entry into and egress from the faith card negotiate is gentle as manifestationd by the 6000 institutions that currently propose cards. Although a new sturdy effectiveness discover it arduous to penetrate the negotiate, a financially gauge bank, level one of polished capaciousness, could get the lawful to propose a MasterCard or a Visa card from the offer companies delay diminutive arduousy. If the bank wanted to permission the province, there would be a handy negotiate to dispose-of its accounts to other faith card suppliers. Thus, it would appear that the faith card perseverance meets most of the characteristics for a accurately competitive negotiate. Questions: 1. What are the characteristics of impeccable two-of-a-trade that are teached by the faith card perseverance? 2. Discuss the appraisement and output predicament of a impeccable two-of-a-trade. 3. Do you meditate the selfselfidentical competitive avow is appropriate to the Indian scenario? CASE STUDY-II The departed fifteen years feel seen turbid mergers of banks in complete distribute of the US. Invariably, bank managers sharp-end to momentous require diminution (increasing recompenses to layer) associated delay alliance of computer regularitys, combining neighbouring relative outlets and diminution of corporeprimand balancehead expenses as proportionedification. Many of these mergers concerned multibillion dollar banks, which appeared to be rambling delay real experimental discovery on bank requires that showed momentous diseconomies of layer for banks delay over than $25-50 favorite in deposits. Unfortunately, these studies used basis simply for banks delay short than $1 billion in deposits. In a over late examine, Sherrill Shaffer and Edmond David used basis for capacious banks ( those delay $2.5 to $121 billion in deposits) and endow increasing recompenses to layer (i.e., lowly per individual requires) up to a bank capaciousness of $15 to $37 billion. Clearly, the owners and managers of the merged banks knew over about their explicit require employments than did the precedent economic analysts. The agreeing plan of mergers of banks greatly capaciousr than $24 to $50 favorite in deposits was secure manifestation that the real discovery was incorrect. Questions: 1. How can mergers in the banking perseverance consequence in economies of layer (require diminution)? 2. Do you meditate the selfselfidentical leveltors can guide to economies of layer in the banking sector in India? 3. What are the other leveltors that can guide to economies of layer in the banking sector?

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