Managerial Economics: IIBM MBA Exam papers: Avail answers at assignmentssolution@gmail.com

Managerial Economics: IIBM MBA Exam papers: Avail answers at assignmentssolution@gmail.com
Semester 1 Examination paper
IIBM Institute of Business Management
IIBM Institute of Business Management
Semester-1 Examination Paper MM.100
Managerial Economics

1) Economists have classified input as
a. Timeless
b. landless
c. labourless
d. all the above
2) ?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.
3) Slope at x=2 for the given curve y=3x3+2x be
a. 26
b. 38
c. 36
d. 18
.....
9) 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
10) Standard deviation is a measure of
a. Sink of price
b. Rise of price
c. Slope of demand curve
d. Risk
Part Two:
1. Define ‘Arc Elasticity’.
2. Explain the law of ‘Diminishing marginal returns’.
3. What is ‘Prisoner’s Dilemma’, a non cooperative game?
4. What is ‘Third degree Discrimation’?

Caselet 1
Mukand Limited, suffered a heavy setback during the first half of 1996 (April-September), on
account of the sluggishness in the international and domestic markets. Further, the heavy interest
burden and the depressed rupee in terms of the dollar put pressure on the bottomline. It is interesting
to see whether the Company will maintain the growth rate achieved during the year 1995-96 in the
year 1996-97 and pay the same dividend to its shareholders. ....
equity in the Joint Venture Company implementing this project. For the future, a lack of captive raw
material sources could continue to put pressure on the margins. Besides, the spinning off the Machine
Building Division could also result in lower revenues for the financial year 1996-97.
1. Are the problems faced by the Company periodic in nature, and when would the bad period over
the problems cease to persist?
2. Is there a case for shifting the business focus from the Indian market to export to foreign
countries?
3. Is there a case for restructuring and the business process re-engineering so that certain problems
and its impact are under control?
4. What would you recommend as a mission and goal to the Company?
Caselet 2
The high cost of television receivers is mainly due to scale of production and cost of the input raw
materials. The degree of automation and efficiency and technology are additional factors which
determine the cost of components. In India, the input materials are subject to very high customers
duties. Because of the split up of licences presumably with a view to avoiding a monopoly
situation, the scale of operation are far lower in India than in countries overseas. Small volume of
production has engendered the use of ....
tube is being imported and the current c.i.f. price is about Rs. 80. An import duty of 75 percent pushes
up the cost to Rs. 140. Taking damage in transit into account, the price per glass shell comes to Rs.
150. There is a freight element of Rs. 23 in the c.i.f. cost of Rs. 80. Duty is payable on freight and the
element of freight cost plus duty amounts to Rs. 40 out of the total cost of Rs. 150.
1. How long can an industry sustain on protection?
2. What is the impact of incidental services like assembly, testing, marketing, etc. on the total cost?
3. Would you agree to the suggestion for a complete changeover to wooden cabinet?
4. Would it be desirable to import the components rather than make them in India?
....
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.”Explain and critically examine the statements.
2) 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.

Managerial Economics:IIBM Exam papers : Contact us for answers at assignmentssolution@gmail.com

Managerial Economics:IIBM Exam papers : Contact us for answers at assignmentssolution@gmail.com
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.

Managerial Economics:IIBM papers: Contact at assignmentssolution@gmail.com

Examination Paper Semester I: Managerial Economics
IIBM Institute of Business Management
IIBM Institute of Business Management
Semester-1 Examination Paper MM.100
Managerial Economics

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
Examination Paper Semester I: Managerial Economics
IIBM Institute of Business Management
……………………….
3. What is ‘Prisoner’s Dilemma’, of non cooperative game?
4. What is ‘Third degree Discrimation’?

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. Easton attempted to calculate how
much tax revenue the government of the country could gain by legalizing marijuana. The study estimates
that the average price of 0.5 grams (a unit) of marijuana sold for $8.60 on the street, while its cost of
production was only $1.70. In a free market, a $6.90 profit for a unit of marijuana would not last for long.
Entrepreneurs noticing the great profits to be made in the marijuana ……………………….
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
Companies that attend to productivity and growth simultaneously manage cost reductions very differently
from companies that focus on cost cutting alone and they drive growth very differently from companies
that are obsessed with growth alone. It is the ability to cook sweet and sour that under grids the
remarkable performance of companies likes Intel, GE, ABB and Canon. In the slow growth electrotechnical
business, ABB has doubled its revenues from $17 billion to $35 billion, largely by exploiting
new opportunities in emerging markets. For example, it has built up a 46,000 employee organization in
the Asia Pacific region, almost from scratch. But it has also reduced employment in North America and
Western Europe by 54,000 people. It is the hard squeeze in the north and the west that generated the
resources to support ABB's massive investments in the east and the south. Everyone knows about the
staggering ambition of the Ambanis, which has fuelled Reliance's evolution into the largest private
company in India. Reliance has built its spectacular rise on a similar ability to cook sweet and sour. What
people may not be equally familiar with is the relentless focus on cost reduction and productivity growth
that pervades the company. Reliance's employee cost is 4 per cent of revenues, against 15-20 per cent of
……………..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?

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.

Managerial Economics: IIBM MBA Exam papers: Avail answers at assignmentssolution@gmail.com

Managerial Economics: IIBM MBA Exam papers: Avail answers at assignmentssolution@gmail.com
Semester 1 Examination paper

IIBM Institute of Business Management

Semester-1 Examination Paper MM.100

Managerial Economics


..
1) Economists have classified input as
a. Timeless
b. landless
c. labourless
d. all the above

2) SPi=………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.

3) Slope at x=2 for the given curve y=3x3+2x be
a. 26
b. 38
c. 36
d. 18

..

10) Standard deviation is a measure of
a. Sink of price
b. Rise of price
c. Slope of demand curve
d. Risk


Part Two:
1. Define ‘Arc Elasticity’.

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

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

4. What is ‘Third degree Discrimation’?
...

Caselet 1
Mukand Limited, suffered a heavy setback during the first half of 1996 (April-September), on
account of the sluggishness in the international and domestic markets. Further, the heavy interest burden and the depressed rupee in terms of the dollar put pressure on the bottomline. It is interesting to see whether the Company will maintain the growth rate achieved during the year 1995-96 in the year 1996-97 and pay the same dividend to its shareholders. Considering the financial results for the first half, the continuation of the liquidity crunch as .. created thereby between the allotment price of Rs 243.50 per share and the market price seem to have precipitated the decision by the promoters. Mukand was also in talks with some Japanese Companies for equity and technical know how participation in the 1.25 million tonne Karnataka Steel project. Mukand will hold 25 to 30 percent equity in the Joint Venture Company implementing this project. For the future, a lack of captive raw material sources could continue to put pressure on the margins. Besides, the spinning off the Machine Building Division could also result in lower revenues for the financial year 1996-97.

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

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

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

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



Caselet 2
The high cost of television receivers is mainly due to scale of production and cost of the input raw materials. The degree of automation and efficiency and technology are additional factors which determine the cost of components. In India, the input materials are subject to very high customers duties. Because of the split up of licences presumably with a view to avoiding a monopoly situation, the scale of operation are far lower in India than in countries overseas. Small volume of production has engendered the use of manual techniques of production which pushes up costs.

Though wages may be comparatively lower in India than in Western countries, .. of the electronic components industry and remedy the same. The glass shell for the picture tube is being imported and the current c.i.f. price is about Rs. 80. An import duty of 75 percent pushes up the cost to Rs. 140. Taking damage in transit into account, the price per glass shell comes to Rs. 150. There is a freight element of Rs. 23 in the c.i.f. cost of Rs. 80. Duty is payable on freight and the element of freight cost plus duty amounts to Rs. 40 out of the total cost of Rs. 150.

1. How long can an industry sustain on protection?

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

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

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


END OF SECTION B



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.”Explain and critically examine the statements.

2) 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.