Managerial Economics

Topics: International trade, Free trade, Economics Pages: 5 (1305 words) Published: June 2, 2011
Section A (Part-1)

Q1. It is a concept where goods are produced without taking into consideration the choices or tastes of customers. Answer. .

Q2. It involves individuals who buys products or services for personal use and not for manufacture or resale. Answer. .

Q3. It is groups of people who interact formally or informally influencing each other’s attitudes & behavior. Answer. .

Q4. The concept of product that passes through various changes in total life is known as: Answer. .

Q5. It refers to unique set of brand associations that brand strategists aspires to create or maintain: Answer. .

Q6. It involves a pricing strategy that charges different prices for the same product or service. Answer. .

Q7. It refers to an arrangement where another company through its own marketing channel sells the products of one producer. Answer. .

Q8. It involves facility consisting of the means & equipments necessary for the movement of passengers of goods. Answer. .

Q9. The advertisement which is used to inform customers about a new product or feature & to build primary demands is known as: Answer. .

Q10. An art that predicts the livelihood of economic activity on the basis of certain assumptions. Answer. .

Section A (Part-2)

Q1. Write a note on importance of consumer behavior for a business firm.


Q2. Define the term “Price”.


Q3. Distinguish between marketing concept and selling concept.


Q4. What are the new trends in advertisement?


Q5. Briefly explain the following.
1.Socio-culture environment.
2.Marketing environment interface


Section C

Q1. Free trade promotes a mutually profitable regional division of labour, greatly enhances the potential real national product of all nations and makes possible higher standards of living all over the globe. Critically explain and examine the statement.

Answer: This is a classic statement of economic thinking on the effects of free trade. Free trade is supposed to do these things because it allows each country to produce those things in which it has a comparative advantage--things for which it has lower opportunity costs than other countries. If all countries do this, and exchange what they make, they can end up making more total goods than if they all try to produce everything. Thinking critically about this statement, though, it is clearly possible to argue that this is an unrealistic hope, especially in the short term. In the short term, you can argue that free trade impoverishes many people. Americans, for example, might lose manufacturing jobs to poorer countries. The Americans who held those jobs might not be able to get other, more high-skill jobs. People in developing countries might get outcompeted by efficient production from the rich world. This tends to happen to farmers in poor countries who lack the mechanization and high tech seeds and chemicals available to farmers in the rich world. In these ways, free trade can actually end up doing a great deal of harm to some segments of the population, especially in the short term. Free trade refers to the absence of restrictions on international trade between two nations. As a commercial policy affecting international trade, free trade is the opposite of protectionism. Where protectionism calls for tariffs and duties on imports to "protect" a country's domestic producers, free trade is a policy of allowing imports and exports to flow freely between nations without any restrictions. In the 18th century, Scottish economist Adam Smith (1723-1790) wrote The Wealth of Nations to explain the benefits of free trade. What he proposed has come to be called unilateral free trade. That is, he called on nations to unilaterally practice free trade by allowing unrestricted free access to their domestic markets. In addition, he recommended a nation neither hold back nor subsidize its own exports. His...
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