Assignment 'A'
Q.1. What are indifference curves? Explain the consumers' equilibrium under the assumptions of ordinal approach.
Q.2. Examine the concept and relationship of Total, Average and marginal costs with the help of suitable diagram.
Q.3. Differentiate and elaborate the concepts of returns to scale and law of variable proportions.
Q.4. Why is demand forecasting essential? What are the possible consequences if a large scale firm places its product in the market without having estimated the demand for its product?
Q.5. Discuss the various steps involved in a managerial decision making process. Explain, in detail, any two group decision making techniques.
Assignment 'B'
Q.1. Why a firm is price taker and not a price maker under perfect market conditions?
Q.2. Profit maximization is theoretically the most sound but practically unattainable objective of business firms. In the light of this statement critically appraise the Baumol's sales revenue maximization theory as an alternative objective of the firm.
Q.3. Distinguish between skimming price and penetration price policy. Which of these policies is relevant in pricing a new product under different competitive conditions in the market?
CASE STUDY
CASE STUDY - Michael Wolfson
Que. 1 Give your opinion on outsourcing and its impact on the prospects of growth of the economy of home Nation and host nation.
Assignment 'C'
Multiple Choice Questions
Q.1. A change in quantity demanded refers to
(a) Contraction along a demand curve
(b) Shift of the demand curve
(c) Movement along a demand curve
(d) Expansion along a demand curve
Q.2. A change in demand refers to
(a) Contraction along a demand curve
(b) Shift of the demand curve
(c) Movement along a demand curve
(d) Expansion along a demand curve
Q.3. If two goods are substitutes, the price elasticity of demand is
(a) Negative
(b) Positive
(C) Zero
(d) Not defined
Q.4 If two goods are complementary, the price elasticity of demand is
(a) Negative
(b) Positive
(C) Zero
(d) Not defined
Q.5. Price elasticity of demand is defined as
(a) Absolute change in quantity demanded due to absolute change in price
(b) Percentage change in quantity demanded due to percentage change in price
(c) Relative change in quantity demanded due to change in price
(d) Marginal change in quantity demanded due to marginal change in price
Q.6. Total revenue will increase if
(a) Demand is elastic
(b) Demand is inelastic
(c) Demand is unitary elastic
(d) None of the above
Q.7. An isoquant shows
(a) All combinations of labor and capital
(b) All combinations of good X and good Y
(c) All combinations of labor and capital
(d) All combinations of labor and capital
Q.8. Changes in income are shown by
(a) Parallel shift of isoquant
(b) Movement along the budget line
(c) Parallel shift of budget line
(d) Both (b) & (c)
Q.9. The relationship between elasticity and total revenue
Q.10. In case of inferior goods the income elasticity is
(a) Positive
(b) Negative
(c) Zero
(d) None of the above.
Q.11. An indifference curve is the locus of
(a) All the combinations of good X and Y giving different level of satisfaction
(b) All the combinations of capital and labor giving same level of output
(c) All the combinations of good X and Y giving same level of satisfaction
(d) All the combinations of capital and labor giving different level of output
Q.12. Short run in production function refers to
(a) When all factors of production become variable
(b) One factor of production varies keeping all other constant
(c) When all factors of production become variable
(d) None of the above
Q.13. Opportunity cost refers to
(a) The expected return from the use of the resource
(b) The expected return from the second best alternative use of the resource
(C) Accounting cost less of unilateral transfers
(d) None of the above
Q.14 Long run average cost curve is also known as
(a) Envelope curve
(b) Angel curve
(C) Laffer curve
(d) None of the above
Q.15. Internal economies of scale determine
(a) The position of long run average cost curve
(b) The shape of long run average cost curve
(c) The shape of short run average cost curve
(d) The position of short run average cost curve
Q.16. The nature and shape of AFC is
(a) A rectangular Hyperbola
(a) A horizontal Line
(b) It is "U" shaped
(c) A vertical Line
Q.17. Which one of the statement is correct
(a) All costs are variable costs in the long run except LMC
(b) TFC is inverse "S"Shaped reflecting Laws of Returns.
(b) Over a very long range of Operation, AFC is Zero.
(c) None of the above is correct.
Q.18. Explicit cost is also known as -
(a) Imputed Cost
(b) Implied Cost
(c) Accounting Cost
(d) Opportunity Cost
Q.19. The use of highly structured meeting agenda and restricted discussion or interpersonal communication during the decision making process is known as -
(a) Nominal Group Technique,
(b) Brainstorming,
(c) Delphi Group Technique,
(d) Both (b) & (c)
Q.20. Variation in Data occurring due to regularly recurring fluctuations in economic activity during each year is
(a) Cyclical fluctuations
(b) Seasonal Variations
(c) Random Variation
(d) Irregular Variation
Q.21. In the short run the supply curve of a firm in perfectly competitive market is
(a) Average cost curve
(b) Total cost curve
(c) Marginal cost curve
(d) None of the above
Q.2.2. A firm is price taker in perfect competition market structure because
(a) Single firm supplies significant part of total market supply
(b)Single firm supplies insignificant part of total market supply
(c) Single firm supplies Homogeneous product
(d) Both (b) and (c)
Q.23. Highest degree of allocative inefficiency is the feature of
(a) Perfect competition
(b) Monopoly
(C) Oligopoly
(d) Not defined
Q.24 Cartels and collusion are
(a) Illegal activities
(b) Legal framework
(C) Authorized framework
(d) Not defined
Q.25. As more labor is added to a fixed amount of input, the rate at which output goes up begins to decrease. This is called
(a) Diminishing marginal utility.
(b) Diminishing marginal productivity.
(b) Diminishing marginal costs.
(c) Diminishing marginal profit.
Q.26. If the cost of sugar rises and sugar is a major ingredient in jelly beans, then the jelly bean
(a) demand curve shifts to the left.
(a) supply curve shifts to the left.
(b) supply curve shifts to the right.
(c) demand and supply curves both shift to the right.
Q.27. Which one of the following is not the characteristic of Perfect Competition
(a) All firms sell an identical product.
(b) All firms are price takers.
(c) All firms have a relatively small market share.
(d) Buyers do not know the nature of the product being sold and the prices charged by each firm.
Q.28. Which one of the following is not the characteristic of demand
(a) There should be the willingness to purchase
(b) There should be the capacity to purchase
(c) Specific time frame
(d) Real market place is required
Q.29. For a normal good:
a) The price elasticity of demand is negative; the income elasticity of demand is negative
b) The price elasticity of demand is positive; the income elasticity of demand is negative
c) The price elasticity of demand is negative; the income elasticity of demand is positive
d) The price elasticity of demand is positive; the income elasticity of demand is positive
Q.30. Which of the following is true?
a) If the marginal cost is greater than the average cost the average cost falls
b) If the marginal cost is greater than the average cost the average cost increases
c) If the marginal cost is positive total costs are maximised
d) If the marginal cost is negative total costs increase at a decreasing rate if output increases
Q.31. If marginal cost is positive and falling:
a) Total cost is falling
b) Total cost is increasing at a falling rate
c) Total cost is falling at a falling rate
d) Total cost is increasing at an increasing rate
Q.32. To maximise sales revenue a firm should produce where:
a) Marginal cost is zero
b) Marginal revenue is maximised
c) Marginal revenue is zero
d) Marginal revenue equals marginal cost
Q.33. Normal profit occurs when:
a) Average revenue equals average variable cost
b) Marginal revenue equals marginal cost
c) Average revenue equals marginal cost
d) Average revenue equals average cost
Q.34 Barriers to entry:
a) Do not exist in monopoly
b) Cannot exist in oligopoly
c) Do not exist in monopolistic competition
d) Do exist in perfect competition
Q.35. Which best describes price discrimination?
a) Charging different prices for different products
b) Charging the same prices for different products
c) Charging the same prices for the same products
d) Charging different prices for the same products
Q.36. In perfect price discrimination:
a) Consumer surplus is maximized
b) Consumer surplus is zero
c) Producer surplus is zero
d) Community surplus is maximised
Q.37. In perfect price discrimination:
a) The demand curve is the marginal cost curve
b) The average revenue equals the average cost
c) The marginal cost is the average cost curve
d) The demand curve is the marginal revenue
Q.38. If a few firms dominate an industry the market is known as:
a) Oligopoly
b) Competitively monopolistic
c) Duopoly
d) Monopolistic competition
Q.39. In case certain goods are not sold within a reasonable time, the retailer pulls the price down, it is known as
(a) Adjustment pricing
(b) Administered pricing
(c) Mark-down pricing
(d) Mark-up pricing
Q.40. This pricing strategy acts as a barrier to entry to new firms
(a) Limit Pricing
(b) Administered Pricing
(c) Peak -Load Pricing
(d) Skimming Pricing