Economics For Managers

 

 

1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

End Semester Examinations – OCTOBER 2014

M.I.B. – i semester

 ECONOMICS FOR MANAGERS

 

Duration: 3 Hrs                                                                                          Max. Marks: 100

 

Section – A

 

1. Answer any SEVEN out of 10 questions. Each carries 5 marks.   (7 x 5  = 35)

 

1. State the problem of choice in economics.
2. Give the meaning of equi marginal utility.
3. Mention any two managerial economic variables and its use to a firm.
4. What is the difference e between Risks and uncertainties?
5. Mention any two statistical techniques that help in making managerial decisions.
6. What is the difference between substitutes and complementary goods?
7. What is meant by unitary elastic?
8. What are isoquants?
9. State any two Qualitative methods used in demand forecasting.
10. What ids discriminating monopoly?

 

Section – B

1. Answer any THREE out of 5 questions. Each carries 15 marks.  (3 x 15   = 45)

11) Explain Production possibility analysis with the help of a graph. What happens when the economy is functioning at a point inside the production possibility curve?

 

12) Explain Cobb-Douglas production function. How is it different from CES ?

 

13) What are the various Economies of scale? When do they become diseconomies?

 

14) Discuss the various demand forecasting methods and their importance in firm level decision making.

 

• Diagrammatically show the pricing-output decisions for a firm under monopolistic market.

 

 

Section – C

 

• Compulsory Case study.                                                                     (1 x 20 = 20)

Shahnaz Husain is acknowledged as one of the most successful women entrepreneurs in India.

Her company, Shahnaz Husain Herbals, is one of the leading manufacturers of herbal products in the world. The company sells over 350 herbal products and operates over 200 salons in more than 130 countries. The brand, ‘Shahnaz Husain’, was valued at over $100 million in 1996 and now it is likely to be worth much more.

Shahnaz Husain group of Companies was started in 1970 in New Delhi with a capital investment of Rs.35,000 as a parlour offering anti ageing treatment and ayurvedic care and today it has become one of the leading brand in beauty care ,having 400 chains of Ayurvedic treatment centres and over 350 products Worldwide. ‘Shahnaz Husain’ brand diversified its business. The company was able to grow systematically and currently operates three major complementary businesses,   namely Herbal products available in all leading stores around the world like Harrods (London), Bloomingdale (New Yory) and Galleries Lafayette (Paris). Recently, the company has decided to launch four skin care products in partnership with Elder Pharma and the third is the diversification into Beauty Salons and at present the Company has more than 200 beauty centres. But today, after being synonymous with beauty care for four decades, Husain’s business is showing signs of graying and she is aging too. Firms like ‘Himalaya’ Clarins, The Body Shop and L’Oreal are taking away the attention of the younger generation and have been able to move quickly and capture the ‘mass’ market.

Questions:

1. Examine the objectives of the firm in the light of its beginning. Also analyse what triggered the alternative objectives for the firm during it journey?

• Examine the Profit maximization versus sales maximization objectives of her firm.

3. What other alternative objectives can she define for the firm ? Give reasons.

 

&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&

 

 

 

 

M.I.B. – i semester

 Economics for Managers

ANSWER KEY

Scheme of valuation

1. choice in economics robins- unlimited wants, limited resources so problem of choice
2. equi marginal utility equalizing utilities with price and finally with utility of money

3 revenue, cost

4. Risks and uncertainties -possibility of loss, indefinite, indeterminate
5. two statistical techniques – correlation regression
6. substitutes- satisfies same want competitive and complementary – used together
7. unitary elastic % change in price = percentage change in quality
8. isoquants- different combinations of K and L that produce a certain amount of a good or service.
9. Qualitative methods used in demand forecasting based on judgments, opinions, intuition, emotions, or personal experiences
10. discriminating monopoly- charges different prices in different markets

 

Section – B

1. Answer any THREE out of 5 questions. Each carries 15 marks.                                                                                                       (3 x 15   = 45)

11) curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc. in efficient

 

12) Cobb-Douglas- technological relationship between the amounts of two or more inputs, particularly physical capital and labor, and the amount of output  CES constant elasticity of substitution describing production, usually at a macroeconomic level, with two inputs which are usually capital and labor.

 

13) Economies of scale- process of expansion, the producer may benefit from the emergence of economies of scale, when input output relationship is at the optimum

 

14) demand forecasting methods –  quantitative qualititative and importance -decision making- determine the quantities that should be purchased, produced, and shipped.

15. pricing-output decisions for a firm under monopolistic market.