MBA-105 Question Paper

Please write your Exam Roll No. Exams roll No……………

END TERM EXAMINATION.

FIRST SEMESTER [MBA] DECEMBER-2008

Time:3hrs Maximum Marks:60

Q1. Explain the following:- (20)

(a) Macro economics is useful in business decision making.(b) The elasticity of demand varies from infinity at the price axis to zero at the quantity axis.(c) (c) Isoquants are convex to the origin.(d) MC curve is a competitive firm’s supply curve.(e) In Nash equilibrium each firm adopts the best strategy.

Q2. “Managerial Economics bridges the gap between the abstract theory and business practice. It uses tools of economic analysis in classifying problems, in organizing and evaluating information and in comparing alternative courses of action”. Outline the nature and scope of managerial economics in the light of this statement. (10)

OR

‘While Economics is the main subject studied under managerial economics, which other disciplines are useful in the study of managerial economics”. Explain the relationship of managerial economics with other disciplines.

Q3. State importance of price elasticity of demand to production managers, marketing managers, personnel managers and policy makers. Why do business firms charge higher price for goods with low demand elasticity? (7+3)

OR

What is the objective of demand forecasting? Explain the various methods of demand forecasting pointing out their merits and demerits. (3+7)

Q4. Explain the properties, importance and limitations of Cobb Douglas Production Function. Show that it exhibits increasing, constant and diminishing returns to scale if α+β >1and <1 respectively. (10)

Paper Code: MS105 Subject: Managerial Economics.

Paper id-39105

NOTE: Attempt all questions.

OR

“For output less than long-run optimum level, it is more economical to under use a slightly large plant operating at less than its minimum cost output. Conversely, at outputs beyond the optimum level, it is more economical to overuse slightly smaller plant.”Explain this proposition showing the relationship between short run and long run average cost curves.

Q5. Prices tend to be rigid in an oligopoly market despite fluctuations in demand and costs. Explain price rigidity using kinked demand curve. Under what condition would an oligopolist charge a price different from (10)

OR

Discuss the various methods of pricing of products in terms of objective and costs.

Please write your Exam Roll No.

Exams roll ……………




Exam Roll No. ………………

Note: Attempt all questions

Q.1 Explain the following (5x4=20)

(a) Why demand curve slops downward from left to right.

(b) Why profit maximizing price will never be set demand is inelastic.

( c) Elasticity of demand is important is decision making by business firms.

(d) In Nash Equilibrium each firm adopts the best strategy.

(e) The U-shape of an average cost curve will be less pronounced the longer the period to which the curve relates.

Q.2. Which Economics is the main subject studied under managerial economics which other disciplines are useful in the study of managerial economics”. Explain the relationship of managerial economics with other discipline.

OR

Managerial economics integrates economic theory and business practice to facilitate decision making by business firms” Explain. (10)

Q.3. State in brief the cardinal approach to the determination of consumer’s equilibrium. Also derive demand curve from the consumer equilibrium. (6, 4)


Paper id-39105


OR

What is demand forecasting Evaluate any two survey methods and any two statistics methods of demand forecasting. (3, 7)

Q.4. What are the various type of production function? Explain the managerial uses of production function. (6, 4)

OR

The LAC curve can be thought of a consisting of points from each a number of short run average cost curves”. Explain in what sense any point on the LAC curve is also on some short run average cost curve, but not necessary with minimum point. (10)

Q.5. Show graphically how a profit maximizing discriminating monopolist will distribute his outputs in two market and charge different prizes under third degree price discrimination. Also discuss the equilibrium of the monopolist under dumping, if the foreign market in which he operates id perfectly competitive. While in the domestic market he faces downward sloping demand curve. (6, 4)

OR

The long run supply curve of a competitive industry may have positive slope (upward sloping), zero slope(horizontal) or negative slope(downward sloping) depending upon the cost conditions in the industry. Explain. (10)





Q.1 Explain the following: (4x5=20)

(a) Managerial economics is different from micro Economics.

(b) The elasticity of demand varies from infinity at the price axis to zero at the quantity axis.

(c) MC curve is a competitive firm’s supply curve.

(d) In Nash equilibrium, each firm adopts the best strategy.

(e) Unlike economic growth, economic development involves slow and gradual socio-economic Changes.

Q.2’’ Managerial economics bridges the gap between abstract theory and business practice. It uses tools of economic analysis in classifying problems, in organizing and evaluating information and in comparing alternative courses of action’’. Outline the nature and scope of managerial economics in the light of this statement. (10)

Or

Compare cardinal and ordinal approaches to consumer behavior. Which of the two approaches enables us to bifurcate price effect and how? (5, 5)

Q.3 Explain the properties of Isoquants. Discuss their role in reaching optimum combination of factors. (4, 6)

Or

Explain the need and objectives of demand forecasting. Critically evaluate the various methods of demand forecasting. (3, 7)


Paper id-39105


Q.4 Why are the cost curves U-shaped under traditional theory of cost, while these may take saucer or other shapes under the modern theory of costs? (10)

Or

Explain the features of oligopoly. Critically examine Sweezy’s kinked demand curve model. (3, 7)

Q.5 Write short notes on any two of the following: (5x2=10)

(a) Importance of Macro economics.

(b) Measurement of national income.

(c) Recent Development in Indian Economy.


Exams roll No……………




Q1. Comment on the following (any four): (3*4=12)

a) Management economics is more prescriptive in nature than descriptive.b) Elasticity of demand would be different at different prices on a demand curve.c) Short-run production function explains the relationship between inputs and output when at

least one input is fixed.d) There is an absence of price competition in the digopolistic markers.e) Managerial cost may be rising in a range of output even when average cost is falling.

Q2.

a) “Managerial economics is the integration of economic theory with business practices”. Explain and comment. (4)

b) What is demand function? Explain the relationship between the quantity demanded and its various determinants. (8)

Or

a) “Managerial economics has evolved from many disciplines. Hence, it is multidisciplinary in nature”. Elaborate. (5)


Paper Id-39105


b) Show graphically that price elasticity of demand is less at lower prices, and more at higher prices. (7)

Q3.

a) Plot the following data on a graph and find the trend equation for sales of Dell computers. (8)

Year 2004 2005 2006 2007 2008 2009 2010

Total Sales(Rs. Million)

10 18 27 24 22 23 21

b) Distinguish between short run production function and long run production function. (4)

Or

a) Explain the regression method of demand forecasting. Compare this method with trend method. (6)

b) Graphically, draw and explain the expansion path of a firm. (6)

Q4. a)How do the economies of scale influence the long- run average cost of a firm? Under what conditions the LAC will be a L-shaped curve? (6)

b) Below is given the output schedule of a firm:

X-input(units)

Y-inputs(units)

Output(units)

2 0 02 1 102 2 302 3 602 4 802 5 952 6 1052 7 1122 8 115

Price of X-input is Rs. 100 per unit. Price of Y-input is Rs. 200 per unit. Estimate the firm’s average cost and marginal cost at different levels of output. (6)

Q5. Write notes on (any three): (4*3=12)

a) Prisoner’s Dilemma.b) Non-price competition.c) Price-Taker firm.d) Limit Pricing.e) Kinked demand curve.

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MBA-105 Question Paper