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Ms-9 Question bank (12)
Ms-9 Question bank
Ms-9 june 2007
Written by sales@mbaonlinepapers.com sales@mbaonlinepapers.comMS-9 June , 2007
MS-9 : Managerial economics
1.Differentiate between 5 types of rnarket using the following characteristics :
(a) Number of independent sellers
b) seller concentration
c) Product differentiation
(d) Conditions of entry
2.Describe the various types of price discrimination. Is price discrimination a characteristic of monopoly or perfect competition ? Explain.
3. (a) Explain and illustrate the various returns to scale.
(b) What is Operating Leverage ? Give examples.
4. Discuss various Demand Forecasting Techniques. Illustrate your answer with examples.
5. Write notes on any four of the following :
(a) Value maximisation
(b) Technical efficiency
(c) Peak load pricing
(d) Equilibrium price
(e) Price bundling
6. Fill in the blanks :
(i) If e > 1, the total revenue curve has a _____slope.
(ii) The value of total revenue reaches _________when elasticity is equal to 1.
(iii) If the demand is _______ do increase in price will result in a decrease of the total revenue.
(iv) Any straight line supply curve passing through the _______ has elasticity equal to one.
Ms-9 june 2008
Written by sales@mbaonlinepapers.com sales@mbaonlinepapers.comMS-9 June , 2008
MS-9 : Managerial economics
1. Explain why the average cost curve is U-shaped. The long run average cost curve is always an envelope of short run average cost curves. Discuss.
2. Explain the equilibrium of a firm by using the marginal cost and marginal revenue curves. Why is the firm under perfect competition described as a price taker ?
3. Explain break-even analysis on the basis of its concept, use, drawbacks and advantages.
4. Write notes on the following :
(a) Discounting principle
(b) The Equi-marginal principle
5. Distinguish between the following :
(a) Economies of scale and Economies of scope
(b) Demand curve and Demand schedule
6 . Choose the correct answer.
(i) The responsiveness or sensitivity of a firm's profits to changes in output is measured by a firm's
(a) operating leverage
(b) contribution margin
(c) degree of operating leverage
(d) returns to scale
(ii) The contribution margin per unit is equal to the
(a) price'of a good
(b) difference between total revenue and total cost
(c) difference between price and average total cost
(d) difference between price and average variable cost ,
(iii) Which type of market structure does not typically
have a negatively-sloped market demand curve ?
(a) Monopoly
(b) Perfect competition
(c) Oligopoly
(d) all of the above typically have negatively-stoped market demand curves
(iv) The restaurant industry has a market structure that comes closest to
(a) Monopolistic competition
(b) Oligopoly
(c) Perfect competition
(d) Monopoly
(v) If marginal revenue is greater than marginal cost, increasing output would
(a) reduce profits
(b) increase profits
(c) have no impact on profits
(d) reduce the rate of growth in profits
8. Read the following text and answer the questions that follow :
THEORY AND REAL WORLD MARKETS
The theory of perfect competition describes how firms act in a market structure where (1) there are many buyers and sellers, none of which is large in relation to
total sales or purchases; (21 sellers sell a homogeneous product; (3) buyers and sellers have all relevant information; (a) there is easy entry and exit. These assumptions are closely met in very few real world markets. These assumptions may however be approximated in some real' world markets. In such markets, the number of sellers may not be large enough for every firm to be a price taker, but the firm's control over price may be negligible. The amount of control may be so negligible, in fact, that the firm acts as if it were a perfectly competitive firm.
Similarly, buyers may not have all relevant information concerning price and quality, but they may still have a great deal of information and the information
they do not have may not matter. The products that the firms in the industry sell may not be homogeneous, but the differences may be inconsequential. In short, a market that does not meet the assumptions of perfect competition may nonetheless approximate those assumptions to such a degree that it
behaves as if it were a perfectly competitive market. If so, the theory of perfect competition can be used to predict the market's behaviour.
Questions ;
(a) A price taker does not have the ability to control the price of the product it sells. What does this mean ?
(b) Why is a perfectly competitive firm a price taker ?
(c) The horizontal demand curve for the perfectly competitive firm signifies that it cannot sell any of its products for a price higher than the market equilibrium price. Why can't it ?
(d) Suppose the firms in a real world market do not sell a homogeneous product. Does it necessarily follow that the market is not perfectly competitive ?
Ms-9 june 2010
Written by sales@mbaonlinepapers.com sales@mbaonlinepapers.comMS-9 June , 2010
MS-9 : Managerial economics
1. (a) Discuss the Laws of Returns to scale and describe the three stages of returns to
scale.
(b) Explain why Marginal Product (MP) is greater than (less than) Average Product
(AP) when AP is rising (falling).
2. Write notes on any four :
a) Tastes and preferences as determinants of demand.
b) Economies of scale.
(c) Breakeven output level.
d) Equimarginal principle.
e) Kinked demand curve.
3. Explain the concept of law of demand. What causes the market demand curve for a commodity to increase (shifting up) and decrease (shifting down) ? Explain.
4. Write five important characteristics of monopoly. Establish the profit maximising output of a monopoly firm.
5. (a) Discuss the relationship between marginal cost, average cost and total cost.
(b) Explain Profit Maximization under cartel condition. Plot necessary graph.
6. State True or False and justify. Attempt any five :
a) The demand for a commodity is inversely related to price of its substitutes.
b) When income increase, the demand for essential goods increases more than proportionately.
c) Decrease in input prices causes a leftward shift in supply curve.
d) In the long run, there are no variable costs.
e) Retail trade is an example of monopolistic competition.
f) The profit will be maximum where MC = MR in general.
g) In a firm's short-run production function, the firms labour and plant are held
constant while its machinery is allowed to vary.
h) The Law of Diminishing returns is unrealistic because it implies that we could
feed the world from our kitchen garden.
i) Even if there are many buyers, imperfect competition can exist in a market.
j) A monopolist will never produce at the elastic portion of the demand curve.
7. Explain decision under risk. Describe strategic decisions based on decision tree.
MS-9 June , 2009
MS-9 : Managerial economics
1. a) Explain in brief the opportunity cost principle. Give examples in support of your answer.
b) What is a Production Possibility Curve (PPC) ? Explain how it reflects the opportunity cost principle.
2. Explain briefly the following give examples :
a) Expert opinion
b) Surveys
c) Market experiments
3.One of the decision problems that concerns aproduction process Manager is, which input combination to use'. Keeping this in mind explain with the help of examples, what is the optimal combination of inputs ? You may use the ISO cost
isoquant framework in your answer.
4.Market selection process includes firms entry, then its survival and finally the exit process'. Critically examine the statement in view of barriers to entry with suitable examples from the sector of your choice.
5.Write short notes on any four of the following :
a) Peak Load Pricing
b) Law of Demand
c) Oligopoly
d) Objective of the firm
e) Economies of scope
f) Accounting and Economic Costs.
6. a) Suppose that a linear demand function is given as :
Q=100-5P
Calculate the price elasticity of linear demand function given when P =10 and
when P =8. Also find the slope of the demand curve.
b) .Explain the concept of break-even analysis with the help of examples. What strategic decisions can a manages take on break-even analysis ?
c) What are the limitations of break-even analysis ? Explain .