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NIBM GLOBAL
THIRD SEMESTER MBA
Subject : Managerial Economics
Attend
any 4 questions. Each question carries
25 marks
(Each answer should be of minimum 2 pages / of 300 words)
Question. 1. Explain
the objectives of Business firms.
Answer:
The following points highlight the four main objectives of business firm. The
objectives are: 1. Profit Maximization Objective 2. Wealth Maximization
Objective 3. Value Maximization Objective 4. Other Maximization Objectives.
1. Profit
Maximization Objective:
Profit
as an objective has emerged from over a century of economic theory. In this
traditional economic theory, the typical firm was small, owner managed and
competing with a large number of similar firms.
Under these
circumstances, profit is the
Question. 2. Explain the law of diminishing
marginal utility.
Answer:
Question. 3. Explain
the importance of the Elasticity Concept.
Answer: The concept
of elasticity of demand is of considerable significance in various situations.
The importance of elasticity of demand can be realised as follows:
(1) Business Decisions:
Change in price of
a good brings about a change in the quantity demanded depending upon the value
of elasticity of demand. Change in quantity demanded affects the total
expenditure of the consumers and will, therefore, affect the profits of the
business.
If the price
elasticity of demand is low, the business firm can fix up a higher price for
the commodity (to raise his revenue and profits).
If elasticity of
demand is less than
Question. 4.
Why statistical methods are considered to be superior techniques of demand
estimation.? Explain.
Answer:
Question. 5.
Explain the laws of production.
Answer: The laws of
production describe the technically possible ways of increasing the level of
production. Output may increase in various ways.
Output can be
increased by changing all factors of production. Clearly this is possible only
in the long run. Thus the laws of returns to scale refer to the long-run
analysis of production.
Principles
of production
Question.
6. How
is the price of a commodity determined in the market? Explain.
Answer: The theory of demand and supply,
first developed by Alfred Marshall in 1890, shows how consumer preferences
determine consumer demand for commodities, while business costs are the
foundation of the supply of commodities. If we see fall in the price of rice,
for instance, it is either because the demand for rice has gone down or because
the supply of rice has gone up. The same is true for every market, from wheat
to mangoes: changes in supply and demand lead to changes in output and prices.
25 x 4=100 marks
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study help by professionals.
Mail us at : help.mbaassignments@gmail.com
Call us at : 08263069601
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