KSLU Solved Question Papers
Managerial Economics
Previous Year Question Paper with Solution
B.B.A. LL.B. (Five Years) · Sem 1
2014 Jun Examination
munotes.in
Mumbai
B.B.A. LL.B. (Five Years) Sem 1 Managerial Economics 2014 Jun Question Paper with Solutions
First published on munotes.in on 1 November 2026.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2014 Jun examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2014 Jun examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2014 Jun examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 20 questions answered
Instructions printed on the paper
- N.B. (1) Answer all 5 questions. (2) One essay type and one short note question from each Unit have to be attempted, which is referred as Part (a) and (b) in all the Units. (3) Figures to the right indicate marks. (4) Answers should be written either in English or Kannada completely.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)Who is a manager ? Explain the role and responsibilities of a manager in a business world.[15]
Answer
For full marks, cover: who a manager is and the levels of management; Part A, the role of a manager (his managerial functions; his interpersonal, informational and decisional roles; his economic decision-making role); Part B, his responsibilities to owners, employees, customers, suppliers, government, society and the environment; how managerial economics helps him; a worked example; a table; and a conclusion.
Who is a manager?
A manager is a person who is responsible for directing a business, or a part of it, towards its goals. He achieves results through other people. He decides what is to be done, arranges the resources, guides the people who do the work and checks the results. A manager is judged not by what he does with his own hands but by what his team achieves.
Managers work at three levels:
- Top management, such as the managing director and the board, who set goals and policies for the whole firm.
- Middle management, such as heads of production, sales and finance, who turn policies into departmental plans.
- Lower management, such as supervisors and foremen, who direct daily work on the floor.
In a small business, the owner is his own manager at all three levels.
Part A: The role of a manager
1. His managerial functions.
- Planning: deciding in advance what is to be done, how and when.
- Organising: dividing the work into jobs and departments and arranging resources.
- Staffing: selecting, training and keeping the right people.
- Directing: guiding, motivating and leading the staff.
- Co-ordinating: bringing the work of departments into harmony.
- Controlling: comparing results with the plan and correcting shortfalls.
2. His roles in daily work. Henry Mintzberg (1973) observed managers at work and grouped what they actually do into three sets of roles.
- Interpersonal roles. The manager is a figurehead at ceremonies, a leader of his staff, and a liaison with people outside his unit.
- Informational roles. He is a monitor who gathers information, a disseminator who passes it to his staff, and a spokesperson who speaks for the unit to outsiders.
- Decisional roles. He is an entrepreneur who starts improvements and a disturbance handler who deals with crises. He is also a resource allocator who decides who gets what, and a negotiator with unions, suppliers and customers.
3. His economic decision-making role. In a business world, many of a manager's decisions are economic:
- Forecasting demand, since production, purchase and staffing plans depend on it.
- Choosing the method and level of production, so that cost per unit is low.
- Fixing prices that cover cost, suit the market and meet competition.
- Allocating funds among departments and projects, judging each by its return.
- Handling risk from changes in demand, costs, technology and government policy.
4. His role as a leader of change. Markets, technology and rules keep changing. The manager must sense these changes early and convince his staff of the need to adapt. He must then steer the firm through the change with as little disruption as possible.
The changing role in the modern business world
The manager's role has widened in recent decades. Competition is now often global, so he must watch foreign rivals and exchange rates as well as local ones. Data from sales, customers and machines arrive in large volumes, and he must turn them into decisions quickly. Work is done more often in teams and across departments, so he leads more by persuasion than by command. Customers, investors and regulators also expect firms to account for their effect on society and the environment. The modern manager is therefore a decision maker, a leader of people, a user of information and a guardian of the firm's reputation.
Part B: Responsibilities of a manager
A manager acts on behalf of the owners, but his decisions affect many other groups. A responsible manager balances their interests.
1. To owners and shareholders. He must use their capital efficiently, earn a fair and steady return, protect the firm's assets and report honestly on its results.
2. To employees. He must provide fair wages, safe working conditions, training and chances of promotion. He must treat staff with respect and settle grievances fairly.
3. To customers. He must supply goods of good quality at reasonable prices, give correct information about them and provide after-sales service. Misleading advertising and hoarding betray this responsibility.
4. To suppliers and creditors. He must pay on time, honour contracts and deal fairly.
5. To the government. He must obey the law, pay taxes honestly and follow rules on labour, safety, competition and the environment.
6. To society and the environment. He must avoid pollution and waste, use resources carefully and contribute to the community where the firm works.
7. To the firm's future. He must plan for its long-term survival and growth, not only for this year's profit. This includes training successors and investing in new products.
Why these responsibilities matter in the business world
A firm that neglects any one group soon pays a price. Unhappy workers lower output and quality. Cheated customers move to rivals. Unpaid suppliers refuse credit. A firm that breaks the law faces penalties and loses its reputation. So responsibility to these groups is not charity. It is part of good management, because the firm's long-run profit depends on their goodwill.
Qualities the role demands
To carry this role and these responsibilities, a manager needs:
- knowledge of the business and of the economic environment;
- decision-making ability, including the courage to act on incomplete information;
- leadership and communication, so that others follow willingly;
- integrity, so that owners, staff and customers trust him;
- foresight, so that he prepares for change instead of reacting late.
How managerial economics helps the manager
Managerial economics equips the manager for his economic role. Demand analysis serves forecasting, cost analysis serves production, market analysis serves pricing, and capital budgeting serves investment. Concepts such as opportunity cost, incremental reasoning and the equi-marginal principle help him compare alternatives correctly. They also help him weigh the claims of different groups in money terms.
A worked example
Suppose the manager of a food-processing unit must decide whether to install an effluent treatment plant costing Rs 20 lakh. Without it, the unit saves the cost but risks penalties, closure orders and anger in the neighbourhood.
As resource allocator, he compares the outlay with the risk. Suppose the plant also recovers water worth Rs 3 lakh a year and saves Rs 1 lakh a year in fines and clean-up. The yearly benefit is 3 + 1 = 4 lakh rupees, so the plant pays for itself in 20/4 = 5 years. As spokesperson, he explains the decision to the board and the local community. In meeting his responsibility to society, he also protects the owners' long-term interest.
Role and responsibilities at a glance
| Aspect | What it covers |
|---|---|
| Managerial functions | Planning, organising, staffing, directing, co-ordinating, controlling |
| Interpersonal roles | Figurehead, leader, liaison |
| Informational roles | Monitor, disseminator, spokesperson |
| Decisional roles | Entrepreneur, disturbance handler, resource allocator, negotiator |
| Economic role | Forecasting, production, pricing, investment, risk |
| Responsibilities | Owners, employees, customers, suppliers, government, society, the firm's future |
Conclusion. A manager is a person who directs a business, or a part of it, towards its goals by getting results through others. His role covers the managerial functions, the interpersonal, informational and decisional roles described by Mintzberg, and the economic decisions on demand, production, price and investment. His responsibilities run to owners, employees, customers, suppliers, the government, society and the firm's own future. In the example, an effluent plant that pays back in 5 years serves both society and the owners. A good manager fulfils this role and balances these responsibilities. He uses managerial economics to make each decision sound, and he keeps the firm's long-term health in view.
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