Managerial Economics M: 7019944355

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Managerial Economics

Q1) Economists have classified input as

a. Timeless

b. landless

c. labourless

d. all the above

Q2) ∑Pi=………where Pi is the probability of certain task.

a. Not defined

b. 1

c. 0

d. It will depend on the number of Pi values we are taking for summation.

Q3) Slope at x=2 for the given curve y=3×3+2x be

a. 26

b. 38

c. 36

d. 18

Q4) For a vertical demand curve the elasticity will be

a. 0

b. 1

c. Between 0 and 1

d. ∞

Q5) The difference between price and average variable cost is defined as

a. Loss contribution

b. Profit contribution

c. Expectations

d. Market contribution

Q6) For an industry with ‘n’ firms the total equilibrium o/p for a Cournot oligopoly with Q0 as o/p from perfect competitive market, is given by

a. Q0(n+1)/n

b. Q0n/(n+1)

c. (n+1)n/Q0

d. (n+1)/(nQ0)

Q7) Game theory was designed

a. To create situation where individual and organization have conflicting objectives for competitive growth.

b. To create situation where organization and organization have conflicting objectives

c. To evaluate the condition of the market

d. To evaluate situations where individual and organization have conflicting objectives.

Q8) The firms may be able to escape from ‘Prisoner’s Dilemma’ if the action is

a. Repetitive

b. Non repetitive

c. Sequential

d. No dependence on the type of action

Q9) Which is not the Property of Indifference curve

a. Convex to the origin

b. Have positive slope

c. Indicate lower level of satisfaction

d. Do not intersect nor are they tangent to one another

Q10) Standard deviation is a measure of

a. Sink of price

b. Rise of price

c. Slope of demand curve

d. Risk

Part Two:

Q1. Define ‘Arc Elasticity’.

Q2. Explain the law of ‘Diminishing marginal returns’.

Q3. What is ‘Prisoner’s Dilemma’, a non cooperative game?

Q4. What is ‘Third degree Discrimation’?

Q5. Are the problems faced by the Company periodic in nature, and when would the bad period over the problems cease to persist?

Q6. Is there a case for shifting the business focus from the Indian market to export to foreign countries?

Q7. Is there a case for restructuring and the business process re-engineering so that certain problems and its impact are under control?

Q8. What would you recommend as a mission and goal to the Company?

Q9. How long can an industry sustain on protection?

Q10. What is the impact of incidental services like assembly, testing, marketing, etc. on the total cost?

Q11. Would you agree to the suggestion for a complete changeover to wooden cabinet?

Q12. Would it be desirable to import the components rather than make them in India?

Q13. 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.”Explain and critically examine the statements.

Q14. What role does a decision tree play in business decision-making? Illustrate the choice between two investment projects with help of a decision tree assuming hypothetical conditions about the states of nature, probability distribution, and corresponding pay-offs.

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Managerial Economics

Section A: Objective Type (30 marks)

Multiple choices:

1. It is a study of economy as a whole

a. Macroeconomics

b. Microeconomics

c. Recession

d. Inflation

2. A comprehensive formulation which specifies the factors that influence the demand for the product

a. Market demand

b. Demand schedule

c. Demand function

d. Income effect

3. It is computed when the data is discrete and therefore incremental changes is measurable

a. Substitution effect

b. Arc elasticity

c. Point elasticity

d. Derived demand

4. Goods & services used for final consumption is called

a. Demand

b. Consumer goods

c. Producer goods

d. Perishable goods

5. The curve at which satisfaction is equal at each point

a. Marginal utility

b. Cardinal measure of utility

c. The Indifference Curve

d. Budget line

6. Costs that are reasonably expected to be incurred in some future period or periods

a. Future costs

b. Past costs

c. Incremental costs

d. Sunk costs

7. Condition when the firm has no tendency either to increase or to contract its output

a. Monopoly

b. Profit

c. Equilibrium

d. Market

8. Total market value of all finished goods & services produced in a year by a country’s residents is known as

a. National income

b. Gross national product

c. Gross domestic product

d. Real GDP

9. The sum of net value of goods & services produced at market prices

a. Government expenditure

b. Product approach

c. Income approach

d. Expenditure approach

10. The market value of all the final goods & services made within the borders of a nation in an year

a. Globalization

b. Subsidies

c. GDP

d. GNP

Part Two:

1. Define ‘Arc Elasticity’.

2. Explain the law of ‘Diminishing marginal returns’.

3. What is ‘Prisoner’s Dilemma’, of non cooperative game?

4. What is ‘Third degree Discrimation’?

Section B: Case lets (40 marks)

Case let 1

Questions

1. Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case above.

2. On the basis of the analysis of the case above, what is your opinion about legalizing marijuana in Canada?

Case let 2

Questions

1. Is Indian companies running a risk by not giving attention to cost cutting?

2. Discuss whether Indian Consumer goods industry is growing at the cost of future profitability.

3. Discuss capital and labour productivity in engineering context and pharmaceutical industries in India.

4. Is textile industry in India performing better than its global competitors?

Section C: Applied Theory (30 marks)

1. 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.

2. What role does a decision tree play in business decision-making? Illustrate the choice between two investment projects with the help of a decision tree assuming hypothetical conditions about the states of nature, probability distribution, and corresponding pay-offs

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M: 7019944355