Ignou Ms 09

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Ignou Ms 09
MS-09

Management Programme

ASSIGNMENT SECOND SEMESTER 2012

MS-09: MANAGERIAL ECONOMICS

School of Management Studies INDIRA GANDHI NATIONAL OPEN UNIVERSITY MAIDAN GARHI, NEW DELHI – 110 068

ASSIGNMENT

Course Code Course Title Assignment Code Coverage

: : : :

MS- 09 Managerial Economics MS - 09/TMA/SEM-II/2012 All Blocks

Note: Answer all the questions and send them to the Coordinator of the Study Centre you are attached with. 1. “The relevance of Opportunity Costs is not limited to individual decisions but also to government’s decisions.” Explain giving examples.

2. “If we have two products, A and B, which are substitutes, we can expect that a rise in the price of A (or B) will cause the demand for B (or A) to go up.” Examine this statement with reference to other prices as determinants of demand. 3. Using the output - cost data of a pharmaceutical firm, the following total cost function was estimated using quadratic function: TC= 2018 - 6.63Q + 0.011Q2 i) Determine average and marginal cost functions. ii) Determine the output rate that will minimize average cost and the per unit cost at that rate of output. 4. Discuss the Equilibrium of a Firm under Monopoly. Illustrate using graphs. 5. Explain the difference between First and Third Degree Price Discrimination. 6. Write short notes on the following : a) Opportunity Set b) Substitutes c) Alternative Costs

1. “The relevance of Opportunity Costs is not limited to individual decisions but also to government’s decisions.” Explain giving examples. Ans: Opportunity costs’ relevance is not limited to individual decisions. Opportunity costs are also relevant to government’s decisions, which affect everyone in society. A common example is the guns-versus-butter debate. The resources that a society has are limited; therefore its decisions to use those resources to have more guns(more weapons) means that it must have less butter (fewer consumer goods). Thus when society decides to spend 100