Pondicherry University 2006 M.B.A MANAGERIAL ECONOMICS - Question Paper

Time :three hours Maximum : 100 Marks

part A – (5 X six = 30 marks)
ans any 5 ques..

All ques. carry equal marks.
1. Write down the objective of the firms.
2. What is meant by legal regulations of Diminishing Returns?
3. discuss price and output equilibrium under monopoly.
4. discuss wage determination under perfect competition in the labour market.
5. discuss the concept of discount rate.
6. discuss few economic indicators influencing the business.
7. discuss the scope of monetary policy.
8. What is the difference ranging from money market and capital market?

part B – (5 x 10 = 50 marks)

ans any 5 ques..
All ques. carry equal marks.

9. elaborate the determinants of demand? discuss Price and Substitution Elasticity of
demand.
10. Write short notes on:
(a) Fiscal policies
(b) IDBI
(c) Memory market.
11. The total cost function is
C = 100 + 3q -2q2 + 3q3
Where c = total cost q = output per day...
At what output is marginal cost a mimnimum?
12. discuss the price and the output determination under perfect competition.
13. discuss the concept of analysis of risk and uncertainty.
14. Evaluate the technology and employment trade-off in the economic growth.
15. In determining whether or not to add a new product line, if a new product line is a
success, the firm will increase it’s profits by $ one m; if it not success, its profit will
reduce by $0.5 m. The manager feels that the probability is 0.6 that the new
product line will be a success and 0.4 will not be a success.
How do you determine whether they are risk neutral?
16. The corporation ‘A’ is considering the purchase of new machines that cost Rs.
30,000 and that will decrease labor cost by Rs. 17,500 per year for the next 4 years.
Its marginal tax rate is 34%.
If the discount rate is 8%, should the firm buy this machine?

part C - (1 x 20 = 20 marks)
(Compulsory)

17. Case Study:

Until January 1990 laboratory technicians at the Mecklenburg County
Environmental Protection Department in Charlotte, North Carolina made regular visits
to their local supermarket to buy 2 or 3 bottles of Perrier mineral water . The
tech. needed purified water to dilute substances they were testing for hazardous
chemicals and buying Perrier was simpler than making their own. But on 19 January
as biologist at the laboratory spotted an unusual studying on hi mass spectrometer:
something was corrupting his sample.
Since Perrier had been an unfailingly reliable source of pure water in the
past, the Scientist’s 1st reaction was that the equipment was at fault. But after

Earning:   Approval pending.