Assignment No. 2

Programme Name :MBA Semester: I Credit: 3
Course Title : MANAGERIAL ECONOMICS Course Code:MBA601
Submitted Date: Last date of Submission: 20 th Feb, 2021
Max. Marks: 30 Weight age: 15 Marks
Instructions:
 Sec-A is compulsory which consists of 10 Multiple Choice Questions (1 mark per question)
 Attempt any five questions from Sec-B out of Seven questions (4 marks each)

Section –A (10 Marks)

1. ______ shows the overall output generated at a given level
of input:
a) Cost function
b) Production function
c) Iso cost
d) Marginal rate of technical substitution
2. If LAC curve falls as output expands, this is due to _____:
a) Law of diminishing retains
b) Economics of scale
c) Law of variable proportion
d) Diseconomics of scale
3. Isoquants are equal to:
a) Product Lines
b) Total utility lines
c) Cost lines
d) Revenue lines
4. The marginal product curve is above the average product
curve when the average product is :
a) Increasing
b) Decreasing
c) Constant
d) None
5. Increasing returns to scale can be explained in terms of:
a) External and internal economies
b) External and internal diseconomies
c) External economics and internal diseconomies
d) All of these.
6. Consumption of a free good will be carried to the point at

which:
a) The total utility derived from the good equals the
total utility derived from the consumption of all
other goods.
b) The marginal utility derived from the good equals
the marginal utility derived from the consumption
of all other goods.
c) The marginal utility derived from the good begins
to decline.
d) The total utility derived from the good is
maximised.
7. An indifference curve shows combinations of two goods
that
a) Would provide the consumer with the same level of
satisfaction.
b) Could be available to the consumer in a given time
period.
c) Consumer could buy with their given income.
d) Could provide the consumer with similar levels of
satisfaction
8. Which of the following statements is NOT TRUE of
indifference curves?
a) They are convex to the origin.
b) They could intersect.
c) They are downward sloping.
d) They exhibit higher levels of utility as you move
from the origin
9. An indifference curve between two commodities where
one is a ‘bad’ and the other a ‘good’ would:
a) be vertical to the axis measuring units consumed of
the ‘good’.
b) remain downward sloping.
c) be vertical to the axis measuring units consumed of
the ‘bad’.
d) be upward sloping.
10. Imagine a budget constraint between ‘good y’ on the

vertical axis and ‘good x’ on the horizontal. If that budget
line were to become more shallow it could be due to:
a) An increase in the price of both goods, yet with the price
of ‘good y’ increasing more than that of ‘good x’.
b) An increase in the price of ‘good x’.
c) A change in consumer preference towards ‘good x’.
d) An increase in income

Section –B (20 Marks)

1. What are the functions of business managers ? How does economics helps business managers in
performing their functions?
2. What are the major macroeconomic issues related directly to business decision-making? What is their
significance in business decisions ?
3. What is Delphi method? What is the use of this method in demand forecasting ?
4. What is indifference curve ? What are the properties of indifference curves? What role does it play in
consumer analysis? What are the sources of monopoly of a firm? Differentiate between a franchise
monopoly and natural monopoly.
5. Define Oligopoly. What is the basic difference between #, oligopoly and monopolistic competition? In
which of the two kinds of markets price and output are intermediate?
6. What is inflation? How does it affect economic growth and employment?
7. Examine critically profit maximization as the objective of business firms. Explain the first and second order
conditions of profit maximization.