Gauhati University Managerial Economics 2007 Question Paper

University : Gauhati University
Degree :   B.Com
Question Paper Subject:Managerial Economics
Question Paper Year : 2007
Question Paper Details : Previous Years Question Papers Types Version

 Managerial Economics 

The figures in the margin indicate full marks for the questions

PART-A

Answer all questions

1. Indicate the most appropriate answer from the multiple choices given below each

question: 2×5=10

(a) Opportunity cost is a term which describes

(i) a bargain price for a factor of production

(ii) costs related to an optimum level of production

(iii) average variable cost

(iv) None of the- above

(b) According to 'profit maximisation theory' of the firm, management decides

(i) output level which maximises revenue

(ii) output level which minimizes cost

(iii) output level which maximises the difference between revenue and cost

(iv) None of the above

(c) Demand for a product should have the following prerequisite

(i) Desire for the commodity

(ii) Ability to buy

(iii) Willingness to pay

(iv) All of the above

(d) The Cobb-Douglas production function assumes that the elasticity of substitution is

(i) one

(ii) two

(iii) three

(iv) None of the above

(e) Shut-down point is one where a firm

(i) cannot reach a no-profit-no-loss position

(ii) can cover only the fixed cost

(iii) cannot cover the variable cost

(iv) cannot cover the fixed cost

2. Write short notes on any four: 3×4=12

(a) Incremental cost

(b) Cross-elasticity of demand

(c) Sunk cost

(d) Economic order quantity

(e) Cost-plus pricing

3. Answer any two questions: 5×2=10

(a) Distinguish between Economic profit and Accounting profit.

(b) What are the limitations of pay-back period method of investment appraisal?

(c) Distinguish between Autonomous demand and Derived demand.

PART-B

Answer any three questions

4. "Managerial economics bridges the gap between economic theory and business

practises." Discuss. 16

5. Why is demand analysis important for successful production planning and capital

expansion? Discuss. 16

6. Explain the concept of production function and give its economic significance.

12+4=16

7. What are the determinants of cost behaviour? Enumerate the different approaches for

estimating cost functions. 6+10= 16

8. Is 'perfect competition' a possible market situation in any of the economies of the

world? Give reason in support of your answer. 16

9. The initial investment of a project is Rs1,00,000 and it generates cash in flows as

follows .

Rs

1st year 40,000

2nd " 30,000

3rd " 50,000

4th " 20,000

5th " 15,000

You are required to-

(a) find out the pay-back period;

(b) calculate the accounting rate of return;

(c) calculate the net present value at. 10% discount. 4+4+8= 16

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