Dibrugarh University (M.Com - Distance) - Managerial Economics (Aug' 2015)

2015

(August)

COMMERCE

Paper: 105

(Managerial Economics)

Full Marks – 80

Time – Three Hours

The figures in the margin indicate full marks for the questions.

1. (a) (i) What is equi-marginal principle? Illustrate how this principle is applied by business managers to allocate the resources. Under what conditions this principle can be applied?                                                2+7+3=12

(ii) Explain why scarcity is the fundamental economic problem.                      4

Or

(b) Critically examine the profit maximisation objective of a business firm. Explain why and how do the managers persue maximisation of firm’s growth rate as an alternative business objective.                                                8+8=16

2. (a) (i) Why does the demand curve slope negatively? Explain the factors that can shift the demand curve.       2+4=6

(ii) Define market demand schedule with a hypothetical example. Mention the determinants of market demand.    4+3=7

(iii) Distinguish between change in demand and change in the quantity demanded.                               3

Or

(b) (i) What is elasticity of demand? Illustrate different types of elasticity of demand with numerical example.    2+10=12

(ii) How can ‘snob effect’ make the demand curve less elastic than otherwise?                        4

3. (a) What is demand forecasting? Why is it done? Explain the uses and limitations of opinion-poll method of demand forecasting.                                        1+3+12=16

Or

(b) Explain the advantages and disadvantages of estimating demand by                                            8+8=16

4. (a) What is transfer pricing? What is its significance? Explain the process of determining the transfer price when the product has no external market.                                               2+4+10=16

Or

(b) Highlight the salient features of monopolistic competition. Illustrate how a monopolistically competitive firm determines price and output in both short-run and long-run.                                      4+6+6=16

5. (a) (i) Explain the features of business cycles. Which phase of the business cycle is the most fearsome phase for the business firms and why?                                              6+6=12

(ii) How can monetary changes cause cyclical fluctuations?                               4

(b) Explain how the instruments of monetary and fiscal policies are manipulated to control cyclical fluctuations. 8+8=16

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