Professional Economics Interview Questions & Answers:

1. What is 80 tta ?

Section 80 TTA is a section which is categorised under chapter VI which includ only savings interest subject to maximum limit Rs. 10000.

2. What is price ceiling and price floor?

price ceiling: a legal maximum price of any good or service below equilibrium point.price ceiling states that sellers will not charge price above this level.e,g rent control (beneficial for buyers)

price floor: is legal minimum price above the equilibrium point set by government ,which states that buyers will not pay below this level (beneficial for sellers)

3. What is a retention bonus?

A Retention bonus is an incentive paid to a key employee to retain them through a critical business cycle. This could be a transitional period (such as mergers and acquisitions) to ensure productivity or to meet a critical milestone. It has proven to be a very good tool in persuading employees to stay.

4. What is explanatory research?

Explanatory research is research conducted in order to explain any behavior in the market. It could be done through using questionnaires, group discussions, interviews, random sampling, etc.

5. What is causing the rise in the price of oil?

The rise in the price of oil can be traced to a simple factor, but there are several other contributing factors.

The simplest explanation is that the demand for oil is greater than the current production. When demand exceeds supply, price will increase, as people are willing to pay more to ensure that they get their scarce resource (oil in this case).

Depending on your political views and knowledge of the situation, you may also believe that the production of oil is much lower than capacity because certain middle-eastern countries know that America depends on oil imports more than other countries. An increase in oil prices will lead to a slightly weaker US economy.

6. Why marketers are interested in discretionary income?

Because discretionary Income = the money people have left over once they have paid for all of their basic requirements (Food, Clothing, Shelter).

You could also call it Disposable Income because you can spend on whatever you want.

If people do not have very much discretionary income then they cannot buy all kinds of useless stuff that marketers are trying to sell them.

This would limit the potential demand for a good or service.

7. What is consumer demand?

Consumer Demand is how much of something that consumers are wanting. A company needs to know the consumer demand so they know how much of a product to make.

8. What is Ramsay pricing?

It assigns costs based on the price elasticity of demand. Yet higher the elasticity (elastic), the lower the charge of fixed costs when allocated amongst products.

9. What is a tariff?

A tax on goods leaving or entering some place

10. How do you calculate variable unit costs and total annual costs?

Annual units sold, 1000. Raw materials annual cost 650. Building rent annual cost 9000. If sales volume increased to 6000 units and 8000 units, what is the total annual cost and unit cost for fixed variable?

Cost per unit of raw material=650/1000= 0.65

Fixed cost (Rent) =9000

Fixed cost per unit= 9000/1000= 9.00

If the sales volume increases to 6000 units, then total cost= 12900 and cost per unit = 2.150

Variable cost+ fixed cost= (0.65*6000) + 9000= 12900 / 6000= 2.15

If the sales volume increases to 8000 units, then total cost= 14200 and cost per unit = 1.775

(0.65*8000) + 9000= 14200 / 8000 = 1.775