BSc (Hons) Management (Finance) +
(General) + (Law) + (Marketing)
Cohorts: BMANF/23A/FT, BMANG/22B/PT,
BMANG/23A/FT, BMANL/23A/FT & BMANM/23A/FT
Examinations for Academic Year 2023-2024
Semester II / Academic Year 2024 Semester I
MODULE
: MANAGERIAL ECONOMICS
MODULE CODE : ECON 2102
Duration
: 2 Hours 15 Minutes
Instructions to Candidates:
1.
This question paper consists of Section A and Section B.
2.
Section A is COMPULSORY.
3.
Answer any TWO questions from Section B.
4.
Always start a new question on a fresh page.
5.
Total Marks: 100.
This question paper contains 5 questions and 3 pages.
This question paper is printed on BOTH SIDES.
Managerial Economics (Econ 2102)
SBMF-Aug/Sept2024Ex-ME
Page 1 of 3
SECTION A: COMPULSORY
QUESTION 1: (40 MARKS)
The market demand and supply estimates for a good are as follows:
Qd= 50 – 4P
Qs= 5 + 5P
(i) Determine the equilibrium price and quantity. Using a demand and supply
diagram, show how you will represent the above information. In your answer,
clearly label the axes, prices, quantities and the equilibrium price.
(6 marks)
(ii) Illustrate diagrammatically and explain the effect of the imposition of a maximum
price of Rs 4.
(4 marks)
(iii) Define price, cross and income elasticity of demand and explain, with the help of
diagrams, why is the concept of price, cross and income elasticity of demand
important to the Sales Manager in a supermarket.
(20 marks)
(iv) Elaborate using examples on how transaction costs will affect the efficiency of
doing business.
(10 marks)
SECTION B: ANSWER ANY TWO QUESTIONS
QUESTION 2: (30 MARKS)
a) At a management luncheon, two managers were overheard arguing about the
following statement: “A manager should never hire another worker if the new
person causes diminishing returns.” Is this statement correct? If so, why? If not,
explain why not?
b) Consider the Cobb-Douglas production function
(15 marks)
, assuming ‘K’ as
capital and ‘L’ as labour.
i) Define the MRTS.
(3 marks)
ii) Find the marginal products functions.
(4 marks)
iii) Write the equations for the MRTS
(3 marks)
Managerial Economics (Econ 2102)
SBMF-Aug/Sept2024Ex-ME
Page 2 of 3
QUESTION 3: (30 MARKS)
The labour market is most prone to asymmetric information. Explain how moral
hazard and adverse selection can arise in the labour market and what possible
solutions can be implemented to minimize such asymmetric information?
QUESTION 4: (30 MARKS)
Discuss the impact on decision making capacity with relevance to short run and long
run product and costs concepts.
QUESTION 5: (30 MARKS)
Elaborate on the various objectives of firms and their impact on production and cost
decisions. Compare and contrast between profit maximization, sales revenue
maximisation, and growth maximization as firm objectives.
***END OF QUESTION PAPER***
Managerial Economics (Econ 2102)
SBMF-Aug/Sept2024Ex-ME
Page 3 of 3