M.Com-M.Com Management 1st Sem MANAGERIAL ECONOMICS(Osmania University (OU)-2010)

TIME: 3hours
Max.Marks: 80

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

SECTION-B
6(a) (i) Explain the functional relationship between 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. Compute the Accounting and Economic profits.

OR

(b) (i) Discuss the objectives of a firm.
(ii)From the following data, find out total variable cost, Average 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? Discuss 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? Explain the various determinants of demand.
(ii)Given the demand equation Q=100-4p write the marginal revenue equation.

8(a)(i)Discuss the characteristics of isoquants and isocosts.
(ii) Given the production function Q=20 K 0.5 L 0.5 and r=Rs.5 and w=Rs 4 determine the efficient combination of inputs to produce 200 units

OR

(b) (i) Describe the production function with two variable inputs.
(ii) For each of the following 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) Explain the various total and average short run cost function.
(ii) Given TC=200+5Q-0.04Q²+0.001Q³ determine the level of Fixed cost, Average cost and Average Variable cost.

OR

(b) (i) Explain the concept of break even point and explain the Break-Even chart.
(ii) Given the following total cost function, find 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) Define 'oligopoly'. Discuss the characteristics of oligopoly.

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