b)
c)
d)
CII Institute of Logistics
PGDSCM/DSCM/ADSCM & CERTIFICATE PROGRAMS
Semester-end Examinations- December 2011
5.
For a want to become a demand it must be backed by the ………………..
a) Ability to buy the product
b) Necessity to buy the product
c) Desire to buy the product
d) Utility of the product
6.
Which of the following laws states that the more a consumer consumes
of a product, the less is the utility he derives from the additional
consumption?
a) Law of equi-marginal utility
b) Law of ordinal utility
c) Law of cardinal utility
d) Law of diminishing marginal utility
7.
………………………….. Can be defined as the cost that involves actual
payment to other parties.
a) Implicit costs
b) Explicit costs
c) Hidden costs
d) Opportunity costs
8.
Cost functions are derived functions. They are derived from
…………………………..
a) Demand functions
b) Supply functions
c) Isoquant functions
d) Production functions
9.
A cost function determines the behavior of costs with change in
………………….
a) Output
b) Input
c) Technology
MANAGERIAL ECONOMICS
Time: 3 hours
Marks: 100
Part A
Answer all questions
1.
2.
3.
4.
(10 x 1 = 10 Marks)
In which type of economy do consumers and producers make their
choices based on the market forces of demand and supply?
a) Open economy
b) Controlled economy
c) Command economy
d) Market economy
In a command economy, all decisions, from the allocation of resources to
the distribution of end products is taken care off by ……………………………..
a) The government
b) The producers
c) The cartels formed by the producers
d) Consumer forums
In which type or economic system is cost-benefit analysis used to answer
the fundamental questions – what, how and for whom to produce?
a) Market economy
b) Command economy
c) Mixed economy
d) Regulated economy
Opportunity costs are a result of ……………………………….
a) Scarcity
Over production
Technology obsolescence
Abundance of resources
d)
Wages
10. At breakeven point, the firm’s ………………………………..
a) Profits are maximum
b) Profits are minimum
c) Losses are maximum
d) Revenue equals costs
Part B
Answer any four
1.
2.
3.
4.
5.
6.
(4x15= 60 marks)
Explain the Law of Demand with suitable example.
What are different types of cost? Explain each with example.
Discuss the different methods of controlling Monopoly.
Compare Perfect competition with Monopoly.
List the characteristics of Monopolistic Competition.
Describe Economies of scale and discuss the types of economies of scale.
Part C
Case study
(3*10=30 marks)
Please read the case and answer the questions given below:
StarHub: English Premier League
Some of the most ardent fans of Arsenal, Manchester United, and Liverpool live far
from Highbury, Old Trafford, and Anfield, in Hong Kong and Singapore. Until the
2006-07 seasons, ESPN Star Sports held the broadcast rights to the English Premier
League (EPL) for Singapore. Then, in late 2006, StarHub bid an estimated US$160
million to beat incumbent ESPN Star Sports and telecommunications provider,
SingTel, to win the rights for the next three seasons. The winning bid was reputedly
several times the amount that ESPN Star Sports had paid for the previous rights.
The Singapore government prohibits the reception of satellite TV. Integrated
telecommunications and cable TV provider, StarHub, is the only provider of cable
TV in Singapore. The government did offer a second cable TV license, but no one
applied.
In 2007, StarHub’s major source of revenues was mobile services, which accounted
for 52% of revenues, with cable TV, broadband, fixed network services, and
equipment sales accounting for 17%, 12%, 14%, and 5% respectively. In 2001,
StarHub unbundled the basic cable TV package into thematic basic packages and
reduced the price from $32.95 to $20 a month. Subsequently, it added new
channels to the various basic packages without raising prices. The new channels
included CCTV-9, Discovery Travel & Living and STAR Chinese Channel. In 2004,
StarHub raised the price of the sports package by $7 to $15 a month. The sports
package included ESPN Star Sports. Typically, cable TV operators pay content
providers such as ESPN a royalty based on the number of subscribers to the
content.
Following its acquisition of the English Premier League rights, StarHub announced
price increases. It raised the price of basic packages by $4 to $24 a month with
effect from July 11. It decided to broadcast the EPL on its own sports channel,
which was included in the sports package. It raised the price of the sports package
by $10 to $25 a month, with effect from October. Mr Thomas Ee, Senior Vice
President of Cable, Fixed & IP Services, justified the prices increases, “Most pay-TV
operators around the world increase prices periodically, and StarHub has not done
so despite a steady rise in costs over the years”.
In 2007, StarHub’s cable TV revenue grew by 9% from S$313 million to S$342
million. ARPU (average revenue per user) rose by 6% from S$48 to S$51, while the
subscriber base increased by 4% to 504,000 as at end December 2007. Relative to
the number of households in Singapore, the subscriber base amounted to a 45%
penetration rate.
Questions:
a. Identify changes in demand and costs (fixed and marginal costs relative to the
number of subscribers) arising from StarHub’s acquisition of the EPL rights.
b. Do you think that, prior to the 2007 price increases; StarHub’s prices had
maximized profits?
c. From the viewpoint of EPL, explain how a lump-sum bid would resolve
asymmetry of information between EPL and cable TV operators.
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