Economics Paper

Topics: Supply and demand, Consumer theory, Economics Pages: 6 (2285 words) Published: November 5, 2014

ADL 04 Managerial Economics AM3

ADL-04-Managerial Economics-AM3
Assignment - A

Question 1. Distinguish between the following:
(i) Industry demand and Firm (Company) demand,
(ii) Short-run demand and Long run demand, and
(iii) Durable goods' demand and Non-durable goods demand.
Question 2. What are the problems faced in determining the demand for a durable good? Illustrate with example of demand for households refrigerator or television set.
Question 3. Analyse the method by which a firm can allocate the given advertising budget between different media of advertisement. Question 4. What kind of relationship would you postulate between short-run and long-run average cost curves when these are not Ushaped as suggested by the modern theories? Question 5. How do demand forecasting methods for new products vary from those for established products?

Assignment - B

Question 1. What are the different methods of measuring national income? Which methods have been followed in India? Question 2. What do you understand by the investment multiplier? In what way does it defend the policy of public works on the part of the state during business depression?

Question 3. Discuss the various phases of business cycle:
(i) Are cyclical fluctuations necessary for economic growth? (ii) Suggest appropriate fiscal and monetary policies for depression.

Case Study

Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sensitive test equipment. The yearly volume of output is 15,000 units. The selling price and cost per unit are shown below:

Selling price $200
Direct material $35
Direct labor 50
Variable overhead 25
Variable selling expenses 25
Fixed selling expenses 15 150
Unit profit before tax $ 50
Management is evaluating the alternative of performing the necessary customizing to allow Electron Control to sell its output directly to Q/A labs for $275 per unit. Although no added investment is required in productive facilities, additional processing costs are estimated as:

Direct labor $25 per unit
Variable overhead $15 per unit
Variable selling expenses $10 per unit
Fixed selling expenses $100,000 per year
Question A. Calculate the incremental profit Electron Control would earn by customizing its instruments and marketing directly to end users.

Assignment - C

1. Econometrics is
(a). A modern name for economics
(b). A specialized branch of economics which applies the tools of statistics to the economic problems (c). A branch of economics which combines macroeconomic principles with welfare economics (d). A branch of economics which combines microeconomic principles with international trade (e). A specialized branch of economics which describes neo-classical microeconomics 2. Which of the following comes under the broad definition for factors of production? (a). Technology

(b). Obsolete machinery
(c). Innovations
(d). Capital



ADL 04 Managerial Economics AM3

(d). Capital
(e). Patent rights
3. Which of the following statements is true?
(a). When the supply increases, both the price and the quantity will increase. (b). When the supply increases, the supply curve shifts towards the left (c). A shift in the supply curve towards the right results in a fall in the price (d). A decrease in the quantity supplied results in shifting of the supply curve towards the left. (e). An increase in the quantity supplied leads to a fall in the price resulting in the shifting of the supply curve towards the left. 4. Which of the following statement(s) is/are false?

(a). If the demand falls, the price will fall.
(b). As the price rises the quantity demanded will fall.
(c). If demand rises, the demand schedule shifts to the left. (d). Both (a) and (b) above.
(e). Both (a) and (c) above.
5. Which of...
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