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Manegerial Economics > Prelims > Flashcards

Prelims Flashcards

1
Q

is the application of microeconomics theories to business problems for the purpose of coming up with a sound and rational decision

A

Managerial Economics

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2
Q

it helps out in making rational choices to yield maximum return out of minimum efforts and resources

A

Managerial Economics

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3
Q

helps in making the best selection among alternative course of action

A

Managerial Economics

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4
Q

Scope of Managerial Economics

A
  1. Demand Analysis and Forecasting
  2. Production and Cost Analysis
  3. Pricing and Output Decisions
  4. Market Structure Analysis
  5. Risk and Uncertainty Analysis
  6. Capital Budgeting and Investment Decisions
  7. Strategic Planning and Policy Information
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5
Q

Managerial economic is used to understand consumer behavior, studying demand patterns, estimating market size and predicting future demand for a product or service.

A

Demand Analysis and Forecasting

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6
Q

Managerial economics helps managers analyze production processes and make decisions regarding input allocation, production techniques, and cost optimization.

A

Production Cost and Analysis

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7
Q

Managerial Economics involves analyzing production functions, economies of scale, cost structures, and efficiency measures.

A

Production Cost and Analysis

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8
Q

Managerial economics provides insights that involves considering factors such as market competition, pricing elasticity, revenue maximization, and profit optimization.

A

Pricing and Output Decisions

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9
Q

Managerial Economics can help managers use concepts like price discrimination, price skimming, or penetration pricing to determine the optimal pricing strategy for a product or service.

A

Pricing and Output Decisions

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10
Q

Managerial economics examines different market structures, including perfect competition, monopoly, oligopoly, and monopolistic competition.

A

Market Structure Analysis

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11
Q

Managerial Economics helps managers understand the behavior of firms in these markets, analyze market dynamics, and make strategic decisions accordingly.

A

Market Structure Analysis

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12
Q

What are the different market structures?

A
  • Perfect Competition
  • Oligopoly
  • Monopoly
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13
Q

Managerial economics helps managers evaluate and manage risks and uncertainties associated with business decisions. It involves analyzing probability distributions, decision trees, and risk-return trade-offs.

A

Risk and Uncertainty Analysis

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14
Q

It involves analyzing probability distributions, decision trees, and risk-return trade-offs.

A

Risk and Uncertainty Analysis

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15
Q

Managerial economics assists managers in making investment decisions by evaluating the feasibility and profitability of different investment projects.

A

Capital Budgeting and Investment Decisions

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16
Q

Managerial economics helps managers understand the external business environment, assess market trends, and develop strategies to gain a competitive advantage.

A

Strategic Planning and Policy Formation

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17
Q

How does Managerial Economic play a crucial role in strategic planning and policy formulation?

A

it helps managers understand the external business environment, assess market trends, and develop strategies to gain a competitive advantage.

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18
Q

What are the Decision-making steps in Managerial Economics?

A
  1. Define the problem
  2. Identify limiting factors
  3. Develop potential alternative
  4. Analyze the alternative
  5. The best alternative
  6. Emplement the decision
  7. Establish a control and evaluation system
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19
Q

The decision‐making process begins here

A
  1. Define the problem
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20
Q

What happens if the problem is inaccurately defined?

A

every step in the decision‐making process will be based on an incorrect starting point.

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21
Q

This decision making part are needed by the managers to identify the constraints or limitations that might affect the decision-making process. These could include budgetary constraints, resource availability, legal regulations, market conditions, and more.

A

Identify limiting factors

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22
Q

In this step, managers brainstorm and create a range of potential solutions or alternatives to address the defined problem. The more diverse the alternatives, the better the chances of finding an optimal solution.

A

Develop Potential Alternatives

23
Q

In this decision-making step, each potential alternative is thoroughly examined in this step. This involves assessing the advantages, disadvantages, costs, benefits, risks, and potential outcomes of each alternative. .

A

Analyze the Alternatives

24
Q

In this decision-making step, the goal is to gather sufficient information to make an informed choice

A

Analyze the Alternatives

25
Q

In this decision-making process, Managers choose the option that appears to be the most effective and suitable for solving the problem and achieving the desired goals based on the analysis of the alternatives.

A

Select the Best Alternative

26
Q

In this decision-making process, once the best alternative is selected, it’s put into action. This step involves planning and executing the chosen solution.

A

Implement the Decision

27
Q

This decision making process is done once,a system is put in place to monitor and evaluate the outcomes of the decision.

A

Establish a Control and Evaluation System

28
Q

This step helps to determine if the chosen alternative is producing the desired results and if any adjustments or corrections are needed.

A

Establish a Control and Evaluation System

29
Q

This step helps to determine if the chosen alternative is producing the desired results and if any adjustments or corrections are needed.

A

Establish a Control and Evaluation System

30
Q

microeconomic concepts founded in neoclassical economics

A

Theory of the Firm

31
Q

states that a firm exists and make decisions to maximize profits.

A

Theory of the Firm

32
Q

What is the firm’s goal?

A

to determine pricing and demand within the market and allocate resources to maximize net profits.

33
Q

also called as the model of profit maximization.

A

Theory of the Firm

34
Q

Who coined the Satisficing Behavior / Behavioral Approach?

A

Richard Cyert and James G. March

35
Q

Explains how decisions are taken within the firm.

A

Satisficing Behavior /Behavioral Approach

36
Q

attempt to attain realistic goals

A

Satisficing Behavior /Behavioral Approach

37
Q

strategy that aims for a satisfactory or adequate result, rather than the optimal solution.

A

Satisficing Behavior /Behavioral Approach

38
Q

focuses on pragmatic or practical effort

A

Satisficing Behavior /Behavioral Approach

39
Q

A firm’s satisficing behavior is an alternative business objective to maximizing profits.

A

Satisficing Behavior /Behavioral Approach

40
Q

making enough profit to keep shareholders happy

A

Satisficing Behavior /Behavioral Approach

41
Q

can either be an individual, a group or an organization impacted by the outcome of a decision or activity of the firm.

A

Stakeholder

42
Q

They have interests on the success of the project.

A

Stakeholder

43
Q

They tend to have long-term relationship with the organization.

A

Stakeholder

44
Q

Classification of Stakeholders:

A
  • Market stakeholders
  • Organizational stakeholders
  • Capital stakeholders.
45
Q

is a person or an institution that owns shares or stocks in a public or private operation.

A

Shareholder

46
Q

They are often referred to
as members of a corporation, and they have a financial interest in the profitability of the organization or project

A

Shareholder

47
Q

Firm should create value to all
those who are affected by firm’s
decision, and those who can also
affect the firm

A

Stakeholder Theory

48
Q

It is the business manager’s
ethical duty to both corporate
shareholders and the community
at large that the activities which
benefit the company do not harm
the community.

A

Stakeholder Theory

49
Q

more concerned with longevity
of their relationship with the
organization and a better quality
of service

A

Stakeholder Theory

50
Q

don’t take part in the day-today
operations of the company or
project.

A

Stakeholder Theory

51
Q

The only duty of a corporation is to
maximize the profits or returns of its shareholders or capital owners

A

Shareholder Theory

52
Q

More concerned with stock prices,
dividends and results. They have a
financial interest in the success of the organization,

A

Shareholder Theory

53
Q

Advocate for growth, expansion,
acquisitions, mergers and other acts that will increase the company’s profitability.

A

Shareholder Theory

54
Q

have some rights as owners of the
company, which are detailed in the
company’s charter, such as the right to inspect financial records— especially if they’re concerned about how the company is being run by its top-tier executive suite.

A

Shareholder Theory

Manegerial Economics (3 decks)

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