1. Explain the discounting principle. Using the discounting principle calculate the present value of an annuity of five years at Rs. 500 payments made at the end of each of the next five years at 10% interest. 2. With reference to the marketing approach of demand measurement explain any two important sources of data used in demand forecasting. 3. How are Isoquants different from Isocost? Illustrate using graphs. 4. “An analytical tool frequently employed by managerial economists is the break even chart, an important application of cost functions.” Discuss this statement giving … [Read more...]

## MS-9 June 2013 Managerial Economics

1. “The Opportunity Cost of a product is the return that can be had from the next best alterative use.” Explain this statement using Production Possibility Curve. 2. Define demand function and explain the impact of price of complements and price of substitutes on demand function. 3. Compare and contrast Economies of Scale and Economies of Scope. Explain why it is important for managers to understand Economies of Scale. 4. Consider a monopolist facing the following demand and cost curves. P = 50 - 2Q C = 25+10Q (Hint: Total demand at any point P will be the summation of two … [Read more...]

## MS-09 Dec 2012 Managerial Economics

1. “The relevance of Opportunity Costs is not limited to individual decisions but also to government’s decisions.” Explain giving examples. 2. “If we have two products, A and B, which are substitutes, we can expect that a rise in the price of A (or B) will cause the demand for B (or A) to go up.” Examine this statement with reference to other prices as determinants of demand. 3. Using the output - cost data of a pharmaceutical firm, the following total cost function was estimated using quadratic function TC= 2018 - 6.63Q + 0.011Q2 i) Determine average and marginal cost … [Read more...]