2014
(August)
COMMERCE
Paper: 105
(Managerial Economics)
Full Marks – 80
Time – Three Hours
The figures in the
margin indicate full marks for the questions.
1. (a) (i) Define managerial
economics. Explain how the concepts and theories of economics are used in
making managerial decision. 2+8=10
(ii) What is
meant by opportunity cost? Justify the relevance of the opportunity cost
principle in business decision making process with example. 1+5=6
(b) Spell out
the objectives of firms. In the context of Baumol’s theory, explain the
equilibrium of a sales revenue maximising firm. 6+10=16
2. (a) (i) What is meant by
demand? Explain the determinants of demand. 2+6=8
(ii)
Distinguish between price elasticity of demand and cross elasticity of demand.
What is the significance of cross elasticity of demand in making business
decisions? 4+4=8
Or
(b) State the
law of demand. Explain with appropriate illustration the law of demand for a
normal goods and Giffen goods. Analysis the situations under which the law of
demand will not hold true. 2+8+6=16
3. (a) Distinguish between demand
estimation and demand forecasting. Why is demand forecasting essential? Analyse
the steps involved in demand forecasting. 4+5+7=16
Or
(b) Critically
evaluate different consumer survey methods of demand forecasting. 16
4. (a) What is third-degree price
discrimination? Explain the conditions that a firm must meet to be able to
practice third-degree price discrimination. 2+14=16
Or
(b) (i) What is
transfer pricing? Explain how transfer price is determined if there is no
external market for the product. 2+8=10
5. (a) Elucidate the meaning of
business cycle. Explain the salient features of different phases of business
cycle. In which phase a business firm will prefer to operate and why? 3+10+3=16
Or
(b) Distinguish
between demand-pull and cost push inflation. Explain the policy measures that
can be adopted to control demand-pull inflation. 8+8=16
***
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