Download BU (Bangalore University) MBA 1st Semester 2017 Feb Economics for Managers Question Paper

Download BU (Bangalore University) MBA (Master of Business Administration) 1st Semester 2017 Feb Economics for Managers Question Paper

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PG?912
First Semester M.B.A. Degree Examination, February 2017
(CBCS)
Management
Paper ? 1.1 : ECONOMICS FOR MANAGERS
Time : 3 Hours
SECTION ?A
Answer any five of the following questions.
1.
2.
What is central problem of an economic ? Discuss.
Max. Marks : 70
(5x5=25)
Explain briefly the relation between marginal cost and average cost with the help
of suitable example.
Distinguish between extension of demand and increase in demand.
Discuss the factors which accounts for increasing returns to scale and decreasing
returns to scale.
What are ridge lines ? Explain its importance in production.
How the measurement of national income is done in India ?
Find the cross elasticity of demand between X and between Y and Z for the data
in table given below.
Commodity
Before
After
Prlce RsJUnlt
Quantity Units/Year
Price R5.IUnit Ouantitleear
Y 8 150 6 200
X 4 100 4 75
Z 10 6 12 5
X 4 100 4 90
P.T.O.

PG ? 912 .2. |||l|i|li|il||Iil|||||i||||ii|llili
SECTION ? B
Answerany three of the following questions : (3x10=30)
8. Prepare sales forecast for 2003 with the help of the following data :
Years 1994 1 996 1 999 2000 2001
Sales (in
28 27
th ousan ds units) 20 25 30
9. Price rigidity is an essential aspect of normal oiigopolistic price strategy explain.
10. Explain the producer?s equilibrium position with the help of isoquants curves.
11. Multiplexes in India raises price of tickets during peak hours. What type of pricing
strategies are used by movie theatres ? Why ? Explain the concept of type of
pricing strategies and its elements.
SECTION ?C
12. Case study: (1 x15=15)
The changing lifestyles of Indian consumers, alongside an increase in nuclear
families, have been fuelling the trend of out-of?home consumption of food. This
market?s growth is further sustained by the rise in working population and the
spurt in disposable incomes which have resulted in higher expenditure on eating
out/ordering in. It is envisioned that these factors, along with other growth drivers,
will continue to propel the market?s growth overthe short to long term. The spurt
in the number of doubIe-income households, is also instrumental to the restaurant
market?s growth. In essence, it is the convenience offered that builds the image
and business of Restaurant.
The demand of a restaurant is likely to be very elastic and downward sloping
because there are many other food outlets available to customers with
differentiated product. But the demand is not perfectly elastic (i.e. horizontal)
because, each restaurant has something to offer other restaurants do not : for
instance, convenience, location, elaborate menu, orjust atmosphere. There is
no barrier of entry or exit. A restaurant should accept customers as long as the
additional or marginal revenue exceeds the additional or marginal cost of the last
meal served. This seems to be apparent in the reservation process which limits

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the number of patrons. Without reservations, the restaurant would either have to
serve customers in overcrowded conditions or make them wait on line. All
successful restaurants have scores of imitators. Non price competition is very
evident in restaurant industry. For instance, several chains have attempted to
duplicate McDonald and siphoned some of its customers and profits. But,
McDonald has fought back with extensive advertising. Brand name producers
have a variety of means to make their products special to customers. Most
important is advertisement which generic item producers would obviously not
use.
Questions :
1) Which type of market competition this case belongs ? Give justification of
your answer with suitable examples.
2) What are the various ways of non price competition prevailing in Restaurant
industry ?
3) Do you think that the economic effect of non price competition is an overall
undesirable loss of allocative and productive efficiency : the customer pays
more and is able to buy less ? Give your arguments for or against non price
competition.