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.
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.
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