NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA
MID SEMESTER EXAMINATION, 2018
SESSION: 2017-18, SPRING SEMESTER
PROGRAMME: B.TECH
Dept. Code: HS, Course Code: HS-341, Course Name: MANAGERIAL ECONOMICS
Full Marks: 30
Duration of Examination: 2 hours
This question paper contains one page
Figures at the right hand margin indicate marks
All parts of a question should be answered at one place
Q. No
Marks
Section A
5x2
Answer the following questions
1. What is consumer’s equilibrium? Discuss consumer’s equilibrium with the help of
indifference curve approach.
2. Define Price elasticity of demand and distinguish its various types. How would you
measure it? Discuss the role of price elasticity of demand in managerial decisions.
Section B
Answer the following questions
1. If the demands function is given as: 80x=40+8y, where x is the amount demanded of
good X and y is the income of the consumer. What is the income elasticity of demand
in this case. Find value of x when y =560.
2. The utility function of a consumer is given by U=q1q2. Suppose Pq1=1 and Pq2=2. The
consumer wants to spend Rs. 40 for both the goods. What will be his demand
function for q1 and q2?
3. Suppose that a consumer has Rs. 90 to be divided between two goods x and y and the
unit price of y is fixed at Rs. 0.20. What will be his demand equation for x if his
utility function is: U=logqx+2logqy.
4. A firm’s sale of product X is 15 thousands when it declares the price of X as Rs. 5.
When this firm declares a price increases of 10% for the product, its sale of X drops
from 15 thousands unit to 12.5 thousand units.
i)
Find price elasticity of demand, assuming linear demand curve.
ii)
Given the elasticity co-efficient found in (i) find the change in sales if the
firm would have decide to decrease the price by 10%.
5. There are only two consumers in the market. Their demand equations are:
Individual 1: X1=50-8p
Individual 2: X2=8-2p
Derive market demand equation?
2.5x5
Section C
1.5x5
Write short notes on the following
1. Budget line
2. Marginal utility
3. Cross elasticity of demand
4. Demand function
5. Marginal Rate of Substitution
**End**