Test Papers / Previous Question Papers of IGNOU MS9 Managerial Economics December 2005

MANAGEMENT PROGRAMME
Term-End Examination

December, 2005

MS9 (S) : MANAGERIAL ECONOMICS

Time: 3 hours
Maximum Marks: 100
(Weightage 70%)

SECTION A

1. What are the important characteristics of perfect competition ? Explain (with the help of graph) the profit maximising output under perfect competition in short run.

2. Describe the following in terms of short-run costs :
(a) Total cost
(b) Average fixed cost
(c) Average variable cost
(d) Average total cost
(e) Marginal cost

3. Explain the optimal product mix in the case of a joint product firm.

4. Discuss Price and Output determination under perfect competition and monopolistic competition in the long run.

5. (a) Explain the Discounting Principle with examples.

(b) Distinguish between Demand function and Demand curve.

SECTION B

1. Discuss, with suitable examples, how managerial economics is an integral part of business activity.

2. What are the major marketing approaches to demand measurement ? Examine.

3. Discuss in detail the optimal combination of inputs in the long run.

4. Define cartel arrangement. Explain profit maximization under cartel arrangement.

5. Write short notes on any three of the following :
(a) Value Maximisation
(b) Production Possibility Curve
(c) Exponential Smoothing
(d) Income Elasticity of Demand
(e) Strategic Entry Barriers

SECTION C

6. State whether the following statements are true or false. Justify your answer. (20)

(i) Scale is a short run concept.

(ii) The slope of the short run production function is equal to average product of variable input.

(iii) The average product and marginal product of variable inputs are equal at the level of output that corresponds to the inflection point of the short run production function.

(iv) The long run total cost curve is derived from the firm's expansion path.

(v) In general, a firm should continue to hire additional units of an input so long as the marginal revenue product of the input is greater than the marginal resource cost of the input.

7. (a) Given the following data, calculate the price eiasticity of demand then price increases from Rs. 3.00 per unit to Rs. 4.00 per unit. (10)

(b) Consider the following demand and supply functions :
Demand: 200 - 2P
Supply: 20 + 4P
What are the equilibrium price and quantity sold ? (10)