The document offers solved assignments for finance and economics, detailing key topics such as managerial economics, demand theory, production theory, break-even analysis, business organization types, capital budgeting, ratio analysis, and pricing strategies. Each section provides definitions and explanations of concepts relevant to economic decision-making and business practices. For further assistance, students are encouraged to contact the provided email or phone number.

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AEREN FOUNDATION’S Maharashtra Govt. Reg. No.: F-11724
SUBJECT :FINANCE AND ECONOMICS
Total Marks-80
All questions are compulsory.
All questions carry equal marks
Question.1. Explain nature and scope of Managerial Economics
Answer:Managerial economics isadiscipline whichdealswiththe applicationof economic theory to
business management. It deals with the use of economic concepts and principles of business
decision making. Formerly it was known as “Business Economics” but the term has now been
discarded in favour of Managerial Economics.
Managerial Economics may be defined as the study of economic theories, logic and methodology
which are generally applied to seek solution to the practical problems of business. Managerial
Economics is thus constituted of that part of economic knowledge or economic theories which is
used as a tool of analysing business problems for
AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL

2. Question.2. Define demand. Explain law of demand and its exceptions
Answer:In our daily life, it is normally observed that decrease in price of a commodity leads to
increase in its demand. Such behaviour of consumers has been formulated as ‘Law of Demand’.
Law of demandstatesthe inverse relationshipbetweenprice andquantitydemanded,keepingother
factors constant (ceteris paribus). This law is also known as the ‘First Law of Purchase’.
Assumptions of Law of demand:
While stating the law of demand, we use the phrase ‘keeping other factors constant or ceteris
paribus’. This phrase is used to cover the following assumptions on which the law is based:
Question.3. What is theory of production. Explain in detail.
Answer:Productiontheoryisthe studyof production, or the economic process of converting inputs
intooutputs.Productionusesresourcestocreate agood or service thatissuitable foruse,gift-giving
ina gifteconomy,orexchange in a market economy. This can include manufacturing, construction,
storing, shipping, and packaging. Some economists define production broadly as all economic
activityotherthanconsumption.Theysee everycommercial activityotherthanthe final purchase as
some form of production.
Production is a process, and as such it occurs through time and space. Because it is a flow concept,
production is measured as a “rate of output per
Question.4. Write a note on break-even analysis
Answer:The break-evenpoint(BEP) in economics, business, and specifically cost accounting, is the
point at which total cost and total revenue are equal: there is no net loss or gain, and one has
"brokeneven."A profit or a loss has not been made, although opportunity costs have been "paid",

3. and capital hasreceivedthe risk-adjusted, expected return. In short, all costs that needs to be paid
are paid by the firm but the profit is equal to 0.
The break-even level or break-even point (BEP) represents the sales amount—in either unit or
revenue terms—that is required to cover total costs (both fixed and variable). Total profit at the
break-even point is zero. Break-even is only possible if
Question.5. What is business organization? Explain different types of business organizations.
Answer:A business is an organization that uses economic resources or inputs to provide goods or
services to customers in exchange for money or other goods and services.
Business organizations come in different types and forms.
There are three major types of businesses:
1. Service Business: A service type of business provides intangible products (products with no
physical form). Service type firms offer professional
Question.6. Explain capital budgeting.
Answer:Capital budgeting, or investment appraisal, is the planning process used to determine
whetheranorganization'slongterm investments such as new machinery, replacement machinery,
new plants, new products, and research development projects are worth the funding of cash
through the firm's capitalization structure (debt, equity or retained earnings). It is the process of
allocatingresources for major capital, or investment, expenditures.[1] One of the primary goals of
capital budgeting investments is to increase the value of the firm to the shareholders.
Question.7. Write a detailed note on ratio analysis
Answer:Ratioanalysisisthe processof determiningandinterpreting numerical relationships based
on financial statements.A ratio is a statistical yardstick that provides a measure of the relationship
between two variables or figures.
This relationship can be expressed as a percent or as a quotient. Ratios are simple to calculate and
easy to understand. The persons interested in the analysis of financial statements can be grouped
under three heads,
i) owners or investors

4. Question.8. Write a note on pricing strategies
Answer:A businesscanuse a varietyof pricingstrategieswhensellinga productor service.The price
can be set to maximize profitability for each unit sold or from the market overall. It can be used to
defendanexistingmarketfromnewentrants,toincrease marketshare withinamarketor to enter a
new market. Businesses may benefit from lowering or raising prices, depending on the needs and
behaviors of customers and clients in the particular market. Finding the right pricing strategy is an
important element in running a successful business.
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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