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1. Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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ASSIGNMENT
Course Code : MS - 09
Course Title : Managerial Economics
Assignement Code : MS-09/TMA/SEM-I/2017
Coverage : All Blocks
Note: Attempt all the questions and submit this assignment on or before 30th April, 2017 to the
coordinator of your study center.
Question.1. Opportunity costs are the ‘costs of sacrificed
alternatives.’ Discuss with the help of examples.
Answer:Opportunitycostreferstoabenefitthata personcould have received, but gave up, to take
anothercourse of action.Stateddifferently,an opportunity cost represents an alternative given up
whena decisionismade.Thiscostis,therefore,mostrelevantfortwomutually exclusive events. In
investing, it is the difference in return between a chosen investment and one that is necessarily
passed up.
When assessing the potential profitability of various
Question.2. How are income effect and substitution effect
important in explaining the negative slope of demand functions?
Explain giving examples from real world.
Answer:The substitutioneffectisthe change inconsumptionpatternsdue toachange inthe relative
prices of goods. For example, if private universities increase their tuition by 10% and public
universities increase their tuition by only 2%, then it is very likely that we would see a shift in
attendance from private to public universities (at
Question.3. When there are 2 inputs K, L, given the price of capital
(PK)= 10 and price of labour (PL)=20. Total Expenditure C=100.

2. Draw and explain the effect on the isocost curve in case of the
following:-
(i) decrease in price of labour (PL)=10
(ii) increase in the price of capital (PK)= 20
(iii) decrease in the price of capital (PK)= 5
(iv) increase in the firms budget with no change in the price of
labour and capital.
Answer:There are two methods of explaining the optimum combination of factor:
(i) The marginal product approach.
(ii) The isoquant / isocost approach.
These two approaches are now explained in brief:
Question.4. Explain the difficulty in sustaining collusion with the
help of prisoner’s dilemma.
Answer:The prisoners’ dilemma is the best-known game of strategy in social science. It helps us
understandwhatgovernsthe balance betweencooperationandcompetitioninbusiness, in politics,
and in social settings.
In the traditional version of the game, the police have arrested two suspects and are interrogating
themin separate rooms. Each can either confess, thereby implicating the other, or keep silent. No
matterwhat the other suspect does, each can improve his own position by confessing. If the other
confesses, then one had better do the same to avoid the
Question.5. Briefly discuss the Chronology of Indian Telecom
Deregulation from the year 2003 to present times.
Answer:India's telecommunication network is the second largest in the world by number of
telephoneusers(bothfixedandmobile phone) with 1.053 billion subscribers as on 31 August 2016.
It has one of the lowest call tariffs in the world enabled by mega telecom operators and hyper-
competition among them. India has the world's second-largest Internet user-base. As on 31 March
2016, there were 342.65 million internet subscribers in the country.
Question.6. Write short notes on the following:-
(a) Market Demand curve

3. Answer:The marketdemand curve is the summation of all the individual demand curves in a given
market. It shows the quantity demanded of the good by all individuals at varying price points. For
example, at $10/latte, the quantity demanded
(b) Optimal Input Combination
Answer:Optimal inputproportionscanbe foundgraphicallyforatwo-input,single-outputsystem by
adding an isocost curve or budget line, a line of constant costs, to the diagram of production
isoquants. Each point on the isocost curve represents a combination of inputs, say, X and Y, whose
cost equals a constant expenditure.
MRP Curve Is an Input Demand Curve
(c) Peak Load Pricing
Answer:PeakLoadPricingisa pricingstrategythat impliesprice will be setatthe highestlevel during
times when demand is at a peak. The pricing strategy is an attempt to shift demand, or at least
consumption of the good or service, to accomodate supply. The idea is that pricing higher when
demandisat its peakwill balance outthe supplyand demand so that there is no shortage on either
end of the spectrum. If a good is priced at a high cost and many demand it, a capacity will be
balanced. This is a type of price discrimination; a
Dear students get fully solved assignments
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