This document provides information about getting fully solved assignments from an assistant. It includes contact details to email or call for assistance and provides sample questions on topics like production functions, cost curves, inflation, price and income elasticity, and revenue. Students are instructed to include their semester and specialization when contacting the assistant for help with assignments. Sample questions cover definitions and explanations of economic concepts.

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ASSIGNMENT
Q.1 What is production function and its uses? Explain the two types of production
functions.
Answer: A production function shows the relationship between inputs of capital and labor and
other factors and the outputs of goods and services.
In macroeconomics, the output of interest is Gross Domestic Product or GDP
The simplest possible production function is a linear production function with labor alone as an
input.
2. 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.
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 proper understanding of the nature and behaviour of costs is a must for regulation and
control of cost of production. The cost of production depends on money forces and an
understanding of the functional relationship of cost to various forces will help us to take various
decisions. Output is an important factor, which influences the cost.
DRIVE SPRING 2015
PROGRAM MBADS/ MBAFLEX/ MBAHCSN3/ MBAN2/
PGDBAN2
SEMESTER 1
SUBJECT CODE & NAME MB0042- MANAGERIAL ECONOMICS
BK ID B1625
CREDIT & MARKS 4 Credits, 60 marks

2. The cost-output relationship plays an important role in determining the optimum level of
production. Knowledge of the cost-output relation helps the manager in cost control, profit
prediction, pricing, promotion etc. The relation between cost and its determinants is technically
described as the cost function.
Q 4. 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: Define Inflation- Inflation is commonly understood as a situation of substantial and rapid
increase in the level of prices and consequent deterioration in the value of money over a period of
time. It refers to the average rise in the general level of prices and fall in the value of money.
Inflationisanupwardmovementinthe average level of prices.The opposite of inflationisdeflation,
a downward movement in the average level of prices. The common feature of inflation is rise in
prices and the degree of inflation may be measured by price indices.
Inflation is statistically measured in terms of percentage increase in the price index, as a rate
(percent) per unit of time- usually a year or a month.
Q.5 Discuss the practical application of Price elasticity and Income elasticity of demand.
Answer: Price elasticity of demand :
Price elasticityof demand (PED or Ed) isa measure usedineconomics to show the responsiveness,
or elasticity,of the quantitydemandedof agoodor service toa change initsprice.More precisely,it
gives the percentage change in quantity demanded in response to a one percent change in price
(ceterisparibus,i.e.holdingconstantall the otherdeterminants of demand, such as income). It was
devised by Alfred Marshall.
Applications of price elasticity :
1.Inelasticdemand for agricultural products helps to explain why bumper crops depress the prices
and total revenues for farmers.
2.Governments look at elasticity of demand when
6. 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 is the total amount received by a business or recognized as earned when the
businesssellssomething, usually services and goods. In modern accountancy, revenue is recorded
whenitis earnednotwhenthe cashis receivedfromcustomers.Forexample when a phone service
providerrecordsrevenue whencallsare made notat the time when you pay the bills. This principle
is known as revenue recognition principle.

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