Examination Paper of Managerial Economics
IIBM Institute of Business Management 1
IIBM Institute of Business Management
Examination Paper
Subject Code-B106 Managerial Economics MM.100
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 are:
a. Future costs
b. Past costs
Examination Paper of Managerial Economics
IIBM Institute of Business Management 2
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. Discuss the concept of Demand Schedule.
2. Explain the law of ‘Diminishing marginal returns’.
3. List the various forms of Market Structure.
4. What are the various methods of measuring national income?
Case let 1
The war on drugs is an expensive battle, as a great deal of resources go into catching those who buy or
sell illegal drugs on the black market, prosecuting them in court, and housing them in jail. These costs
seem particularly exorbitant when dealing with the drug marijuana, as it is widely used, and is likely no
more harmful than currently legal drugs such as tobacco and alcohol. There's another cost to the war on
drugs, however, which is the revenue lost by governments who cannot collect taxes on illegal drugs. In a
recent study for the Fraser Institute, Canada, Economist Stephen T. ....
scrambling to find new sources of revenue to pay for important social objectives such as health care and
education expect to see the idea raised in Parliament sooner rather than later.
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?
Examination Paper of Managerial Economics
IIBM Institute of Business Management 4
Case let 2
Case 1: The Stock Market
The stock market is very close to a perfect competitive market. The price of a stock usually is
determined by the market forces of demand and supply of the stock and individual buyers and sellers of
the stock have little effect on price (they are price-takers). Resources are mobile as stock is bought and
sold frequently. Information about prices and quantities is readily available. Funds flow into stocks and
resources flow into uses in which the rate of return. Thus stock prices provide the signal for efficient
allocation of investment in the economy. However, imperfections occur here also though the stock
market is very close to a perfect competition, for example, sale of huge amount of stocks by a large
corporation will certainly affect (depress) the price of its stocks.
Question
1. Find out the characteristic of National Stock Exchange.
1. What do you understand by Monitory Policy? Discuss roles and functions of RBI.
2. What is the concept of law of demand? Discuss Elasticity of Demand in detail.
IIBM Institute of Business Management 1
IIBM Institute of Business Management
Examination Paper
Subject Code-B106 Managerial Economics MM.100
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 are:
a. Future costs
b. Past costs
Examination Paper of Managerial Economics
IIBM Institute of Business Management 2
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. Discuss the concept of Demand Schedule.
2. Explain the law of ‘Diminishing marginal returns’.
3. List the various forms of Market Structure.
4. What are the various methods of measuring national income?
Case let 1
The war on drugs is an expensive battle, as a great deal of resources go into catching those who buy or
sell illegal drugs on the black market, prosecuting them in court, and housing them in jail. These costs
seem particularly exorbitant when dealing with the drug marijuana, as it is widely used, and is likely no
more harmful than currently legal drugs such as tobacco and alcohol. There's another cost to the war on
drugs, however, which is the revenue lost by governments who cannot collect taxes on illegal drugs. In a
recent study for the Fraser Institute, Canada, Economist Stephen T. ....
scrambling to find new sources of revenue to pay for important social objectives such as health care and
education expect to see the idea raised in Parliament sooner rather than later.
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?
Examination Paper of Managerial Economics
IIBM Institute of Business Management 4
Case let 2
Case 1: The Stock Market
The stock market is very close to a perfect competitive market. The price of a stock usually is
determined by the market forces of demand and supply of the stock and individual buyers and sellers of
the stock have little effect on price (they are price-takers). Resources are mobile as stock is bought and
sold frequently. Information about prices and quantities is readily available. Funds flow into stocks and
resources flow into uses in which the rate of return. Thus stock prices provide the signal for efficient
allocation of investment in the economy. However, imperfections occur here also though the stock
market is very close to a perfect competition, for example, sale of huge amount of stocks by a large
corporation will certainly affect (depress) the price of its stocks.
Question
1. Find out the characteristic of National Stock Exchange.
1. What do you understand by Monitory Policy? Discuss roles and functions of RBI.
2. What is the concept of law of demand? Discuss Elasticity of Demand in detail.
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