14279_home work 1 managerial economics

8/4/2019 14279_Home Work 1 Managerial Economics

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LOVELY PROFESSIONAL UNIVERSITY Form/LPUO/AP-3(The format to be used forPlanning the academic activities other than Lecturers/Tutorial/Practical like

Assignments, Case study, Presentation, Quiz, Projects, Class tests, industrial visits, teaching practice, court visits etc. to beundertaken as a part of the continuous assessment for the Course)

Home-Work1

School : LSB Department of Management

Name of the faculty member : Neha Shandilya

Course No. ECO515 Course Title: Managerial Economics

Class: MBA Semester I Section: R1001 Batch 2010-12Max. Marks: 15 Date of Allotment:18/8/10 Date of Submission: 01/09/10

S. no. Roll No. Topic

No.

Objectives of Aca demic

Activity

Topic Evaluation Details

Eachstudent

will

attempt all

the

questions.

To make the students

understood of basic managerial

economic concepts and how

these concepts are applied in

economic decision making in

present day economy

Each student will attempt all thequestions given in the assignment i.e.

15 questions for each student. A test

will be conduct after submission of

assignment. THERE IS NO MARKS

FOR SUBMISSION. But only those

students will be allowed to sit in test

those who have submitted theirassignments. 3 questions will askedin test and evaluations will be done

out of 15 marks.

Date: Sign. of Faculty member

Remarks by HOD (Mandatory)

Sig. of HOD with date

Remarks by HOS (Mandatory)

Sig. of HOS with date

ECO515-Mangerial EconomicsHW-1

Note: No assignment shall be accepted after the date of submission.S.no. Topic No.

1 Rohan consumes two commodities, wheat and rice. The marginal utility derived by him from rice is

two and half time the utility derived from the marginal utility of wheat. If wheat is available for

Rs.12 /kg, what price will he be willing to pay for rice in order to maximize his utility?

2 The fundamental economic problems of what to produce, how to produce and for whom to produceare solved differently by different economic systems. Discuss how a capitalist Economy solves

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these problems.3 Tomatoes and potatoes are available for Rs. 7/kg and Rs. 10 /kg respectively. If you have an

income of Rs. 35000, draw the budget line as graph.

4 Suppose you are the manager of California winey. How would you expect the following events to

affect the price you receive for a bottle of wine?

a. The price of French wines decreases

b. One hundred new wineries open in California

c. The unemployment rate in USA decreases

d. The price of cheese increases

e. The price of a glass bottle increases significantly due to government anti-shatter regulations

5 Other things being the same what would happen to the supply of a particular product ifa. price of the product decreasesb. a technological breakthrough enables the good to be produced at a significantly lower cost

c. the price of inputs used to produce the product increasesd. the price of substitute commodity decreasese. the managers of the firms that produce that good expect the rise in price of that product innear future

6 A) What is income consumption curve? Draw income consumption curve for a normal and inferiorgoods.

B) Suppose the supply curve for allu tikki passes through the point P= Rs.25 and Qs=500. Give twointerpretations of this point on the supply curve.

7 In 2003, the Men`s Hair company increased the price of its shampoo and subsequently sold more

shampoo than 2002. Is the demand curve for this company positively sloped? When the demandcurve slopes positively? Give an example of a product in whose case demand curve slopespositively and also explain the exceptions of law of demand.

8 Shweta spends her whole weekly food allowance of $42 on Pizza and soft drinks. The price ofsingle pizza is $2 and of soft drinks is $1.Shweta buys 12 pizzas and 18 soft drinks and hermarginal rate of substitution between pizza and soft drinks is 1. Is Shweta in equilibrium? Explain.

9 Suppose that a study has found that the price elasticity of demand for subway rides is 0.7 inWashington D.C., and the mayor wants to cut the operating subway system. Should the mayorcontemplate increasing or decreasing the price of subway ride. Why?

10 The price of chocolate is Rs.10 and you have to analyze the consumer behavior under cardinal

utility analysis. By the assumption of constant marginal utility of money show the consumerequilibrium with the help of table and diagram.

11 You are working forcoca-cola as the market head. The company is planning to float a new drinkwhich is white in colour. What lessons from the concept of elasticity can you draw while fixing theprice for this new drink?

12 If we do not have scarce resources, will we have a law of demand? Will we observe price rationingfor goods? Give your arguments.

13 For each of the following ,state whether economists would consider it as a resource and if theywould identify which of the four types of resources the item isa. A computer used by CBI agent to track the whereabouts of suspected criminals.

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b. The office building in which CBI agent worksc. The time that a CBI agent spends on a cased. A farmers tractore. Crude oilf. A package of frozen vegetablesg. plastic bags used by a company for holding its products

14 A publishing company plans to publish a book .From the sales of data of other publishers of similarbooks, it works out the demand function for the book as Q=5000-5p. Find out-a)Demand schedule and demand curve

b)no. of books sold at price Rs. 25c)price for selling 2500 copiesd)price for zero salese)point elasticity of demand at price Rs.20

15 A domestic servant spends his total income only on two goods, food and clothing. Analyze theeffect of increase in his income on consumption of food and clothing. Illustrate the derivation of hisIncome Consumption Curve.

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14279_home work 1 managerial economics

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