📘 Managerial Economics BBA LLB Semester 1 Question Answer – Complete Exam Guide
📖 Syllabus Coverage – Managerial Economics (BBA LLB Semester 1)
- Introduction to Managerial Economics
- Demand Analysis and Elasticity
- Production Function and Cost Analysis
- Market Structures
- Capital Budgeting
- Oligopoly and Price Rigidity
📘 Multiple Choice Questions (1 Mark Each)
BBA LLB Semester 1 – Managerial Economics MCQs
| Q.No. | Question | Option (a) | Option (b) | Option (c) | Option (d) | Correct Answer |
|---|---|---|---|---|---|---|
| 1 | Main purpose of Managerial Economics? | Study consumer behaviour | Integrate economics with business decisions | Forecast GDP | Analyze financial statements | (b) |
| 2 | Opportunity cost refers to: | Money spent | Next best alternative forgone | Past cost | Owned resource cost | (b) |
| 3 | When PED = 0.5, demand is: | Unitary elastic | Perfectly elastic | Elastic | Inelastic | (d) |
| 4 | Firm is a price taker in: | Monopoly | Oligopoly | Monopolistic competition | Perfect competition | (d) |
| 5 | MC intersects AVC at: | Maximum point | Minimum point | Inflection point | Zero | (b) |
| 6 | Quantitative forecasting method: | Consumer survey | Delphi method | Regression analysis | Sales force opinion | (c) |
| 7 | Economic profit equals: | TR − Explicit costs | TR − Implicit costs | TR − (Explicit + Implicit) | AP − Explicit | (c) |
| 8 | Isoquant shows: | Same cost | Same outputs | Same output from inputs | Profit max | (c) |
| 9 | Kinked demand curve explains: | Price flexibility | Price rigidity | Differentiation | Non-price competition | (b) |
| 10 | Irrecoverable past costs are: | Opportunity costs | Variable costs | Sunk costs | Fixed costs | (c) |
✍️ Section B: Short Answer Questions (7 Marks Each)
Price Elasticity of Demand
Price Elasticity of Demand measures the responsiveness of quantity demanded to changes in price. It helps managers in pricing decisions, revenue estimation, and understanding consumer behaviour. Knowledge of elasticity enables firms to determine whether increasing or decreasing prices will maximize profits.
Accounting Profit and Economic Profit
Accounting profit is the difference between total revenue and explicit costs. Economic profit includes both explicit and implicit costs and is more relevant for managerial decision-making as it reflects the true profitability of a business.
Steps in Demand Forecasting
Demand forecasting involves defining objectives, identifying demand determinants, selecting forecasting methods, collecting data, estimating demand, and revising forecasts periodically to ensure accuracy.
Law of Variable Proportions
The Law of Variable Proportions states that increasing a variable factor with fixed factors leads to increasing, diminishing, and eventually negative returns in the short run.
Break-Even Analysis
Break-even analysis identifies the output level at which total cost equals total revenue. It helps managers avoid losses and make effective pricing and production decisions.
Role of a Managerial Economist
A managerial economist assists management in demand forecasting, cost analysis, pricing decisions, capital budgeting, and strategic planning.
Short-Run Cost Concepts
Short-run costs include fixed costs, variable costs, and marginal costs. Understanding these costs helps firms in output and pricing decisions.
📚 Section C: Long Answer Questions (15 Marks Each)
Nature and Scope of Managerial Economics
Managerial Economics applies economic theory to business decision-making. It is prescriptive, multidisciplinary, and pragmatic. Its scope includes demand analysis, production and cost analysis, pricing decisions, profit management, and capital budgeting.
Perfect Competition
Perfect competition is characterized by many buyers and sellers, homogeneous products, free entry and exit, and perfect knowledge. Firms are price takers and achieve equilibrium where marginal cost equals marginal revenue.
Oligopoly and Kinked Demand Curve
Oligopoly is dominated by a few firms. The kinked demand curve explains price rigidity due to fear of price wars and loss of customers.
Capital Budgeting
Capital budgeting involves evaluating long-term investments using techniques such as Net Present Value and Internal Rate of Return to ensure profitability and growth.
🎓 Why This Guide by Career FI India Is Important
- Bookish, university-level language
- Answers arranged strictly according to marks
- Ideal for exam preparation and revision
- Suitable for PDF notes and textbook use
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❓ Frequently Asked Questions (FAQs)
Q1. Is this Managerial Economics guide enough for BBA LLB exams?
Yes, this guide is written in bookish language and covers MCQs, short answers, and long answers strictly as per university exam standards.
Q2. Does this article include MCQs for Managerial Economics BBA LLB?
Yes, it includes important MCQs with correct answers for quick revision.
Q3. Can I download Managerial Economics BBA LLB Semester 1 PDF?
Yes, Career FI India provides a downloadable PDF for exam preparation.
Q4. Is this useful for last-minute revision?
Absolutely. Answers are arranged according to marks, making it ideal for last-minute exam revision.
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