Osmania University (OU) 2009 M.Com Accounting and Finance Managerial Economics - Question Paper

M.Com one Semester NOV/DEC 2009
MANAGERIAL ECONOMICS

TIME: 3hours
Max.Marks: 80

SECTION-A
ans all ques. in not exceeding 10 lines each:
1.Circular flow of economic activity
2.Cross elasticity
3.Expansion path
4.Long run avg. cost.
5.Monopoly

SECTION-B
6(a) (i) discuss the functional relationship ranging from marginal revenue and total revenue.
(ii) Sunil who completed an MBA degree has not accepted his job offer of RS.4,00,000 p.a. and started business on his own. Rs.6,00,000 was invested on his business wherein he was earning 8% interest p.a. Sunil is using his own building for business purpose on which he was getting a rent of Rs.20,000 p.m. sales revenue in the business is Rs. 11,50,000. The expenses are as follows:
Rent 1,10,000; Advertising Rs.60,000; Taxes Rs.60,000; Salaries 4,00,000; the other expenses Rs.50,000. calculate the Accounting and Economic profits.

OR

(b) (i) explain the objectives of a firm.
(ii)From the subsequent data, obtain out total variable cost, avg. total cost and marginal cost.
UNITS OF OUTPUT: 0 TOTALCOST: 100
UNITS OF OUTPUT:50 TOTALCOST: 230
UNITS OF OUTPUT:100 TOTALCOST: 285
UNITS OF OUTPUT:150 TOTALCOST: 360

7(a) (i)What do you understand by elasticity of demand? explain the role of price elasticity of demand in business decisions.
(ii)Calculate the arc price-elasticity of demand if:
Q1=4000;Q2=5000; P1=Rs.20;P2=Rs.19

OR

(b) (i)What do you understand by demand function? discuss the different determinants of demand.
(ii)Given the demand formula Q=100-4p write the marginal revenue formula.

8(a)(i)Discuss the characteristics of isoquants and isocosts.
(ii) provided the production function Q=20 K 0.5 L 0.5 and r=Rs.5 and w=Rs four determine the efficient combination of inputs to produce 200 units

OR

(b) (i) define the production function with 2 variable inputs.
(ii) For every of the subsequent procudion functions, determine whether the returns to scale are increasing, decreasing or constant.
(A)Q=2K+3L+KL (B) Q=20 K0.6 L0.5
(C)Q=100+3K-2L (D) Q=K/L

9(a) (i) discuss the different total and avg. short run cost function.
(ii) provided TC=200+5Q-0.04Q²+0.001Q³ determine the level of Fixed cost, avg. cost and avg. Variable cost.

OR

(b) (i) discuss the concept of break even point and discuss the Break-Even chart.
(ii) provided the subsequent total cost function, obtain break even point. Total cost= 100+5X and sells it at price of Rs.10perunit.

10 (a)Explain the equilibrium of a firm under perfect competition.
OR
(b) describe 'oligopoly'. explain the characteristics of oligopoly.

Earning:   Approval pending.