MB0042
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Master of Business Administration- MBA Semester 1 Spring 2015
MB0042 – Managerial Economics
Q1.
What is production function and its uses?
Explain the two types of
production functions.
Answer:
The entire theory of production centres revolves around the concept
of production function.
A “production function” expresses
the technological or engineering relationship between physical
quantity of inputs employed and physical quantity of outputs obtained
by a firm… Get
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Q2.
Consumers' interview method is a survey method used for estimating
the demand for new products.
This method is very important with
regard to collect the relevant information directly from the
consumers with regard to their future purchase plans.
Opinion surveys
and direct interview method are the two important techniques among
all.
Describe these two methods in detail.
Answer:
Survey methods are one of the forecasts methods to get information
about the future plans of potential buyers through collecting the
opinions of experts or by interviewing the consumers.
These methods
are extensively used in short run and for estimating the demand for
new products.
There are different approaches under survey methods…
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Q3.
A cost-schedule is a statement of variations in costs resulting from
variations in the levels of output and it shows the response of costs
to changes in output.
If we represent the relationship between
changes in the level of output and costs of production, we get
different types of cost curves in the short run.
Define the kinds of
cost concepts like TFC, TVC, TC, AFC, AVC, AC and MC and its
corresponding curves with suitable diagrams for each.
Answer:
A cost-schedule is a statement of variations in costs resulting from
variations in the levels of output. It shows the response of costs to changes
in output.
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Q4.
Inflation is a global Phenomenon which is associated with high price
causes decline in the value for money.
It exists when the amount of
money in the country is in excess of the physical volume of goods and
services.
Explain the reasons for this monetary phenomenon.
Answer:
.
Inflation is the percentage change in the value of the Wholesale
Price Index (WPI) on a year-on year basis.
It refers to the average
rise in the general level of prices and fall in the value of money.
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Q5.
Discuss the practical application of Price elasticity and Income
elasticity of demand.
Answer:
Practical applications of price elasticity are as follows:
• Production planning – It helps a producer to decide about the volume of production. If the demand for his products is inelastic, specific quantities can be produced while he has to produce different quantities, if the demand is elastic.
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Q6. Define revenue. Explain the types of revenue and the relationship between TR, AR and MR with an example of a hypothetical revenue schedule.
Answer: revenue refers to the total amount of money that the firm receives from the sale of its products, i.e. .gross revenue.
In other words, it is the total sales receipts earned from the sale of its total output produced over a given period of time. We may show total revenue as a function of the total quantity sold at a given price. Figure depicts the graph for total revenue…
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