smu mba semester 1 assignments answers for spring 2015 mb0042

1. Get Answers of following Questions here
Master of Business Administration- MBA Semester 1 Spring 2015
MB0042 – Managerial Economics
Q1. What is production function and its uses? Explain the two types of production functions.
Answer: The entire theory of production centres revolves around the concept of production
function. A “production function” expresses the technological or engineering relationship
between physical quantity of inputs employed and physical quantity of outputs obtained by a
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Q2. Consumers' interview method is a survey method used for estimating the demand for new
products. This method is very important with regard to collect the relevant information directly
from the consumers with regard to their future purchase plans. Opinion surveys and direct
interview method are the two important techniques among all. Describe these two methods in
detail.
Answer: Survey methods are one of the forecasts methods to get information about the future
plans of potential buyers through collecting the opinions of experts or by interviewing the
consumers. These methods are extensively used in short run and for estimating the demand for
new products. There are different approaches under survey methods…
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Q3. A cost-schedule is a statement of variations in costs resulting from variations in the levels of
output and it shows the response of costs to changes in output. If we represent the relationship
between changes in the level of output and costs of production, we get different types of cost
curves in the short run. Define the kinds of cost concepts like TFC, TVC, TC, AFC, AVC, AC
and MC and its corresponding curves with suitable diagrams for each.
Answer: A cost-schedule is a statement of variations in costs resulting from
variations in the levels of output. It shows the response of costs to changes
in output.
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Q4. Inflation is a global Phenomenon which is associated with high price causes decline in the
value for money. It exists when the amount of money in the country is in excess of the physical
volume of goods and services. Explain the reasons for this monetary phenomenon.
Answer: . Inflation is the percentage change in the value of the Wholesale Price Index (WPI) on
a year-on year basis. It refers to the average rise in the general level of prices and fall in the value
of money.
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Q5. Discuss the practical application of Price elasticity and Income elasticity of demand.
Answer: Practical applications of price elasticity are as follows:
• Production planning – It helps a producer to decide about the volume of production. If the
demand for his products is inelastic, specific quantities can be produced while he has to produce
different quantities, if the demand is elastic.
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2. Q6. Define revenue. Explain the types of revenue and the relationship between TR, AR and MR
with an example of a hypothetical revenue schedule.
Answer: revenue refers to the total amount of money that the firm receives from the sale of its
products, i.e. .gross revenue.
In other words, it is the total sales receipts earned from the sale of its total output produced over
a given period of time. We may show total revenue as a function of the total quantity sold at a
given price. Figure depicts the graph for total revenue…
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