Quiz Practice Paper 1

Managerial Economics – 1 (Prof H Mankad)

Question 1 - By enacting minimum wage laws, the governments have

Answer - Artificially raised wages

Question 2 - In BCG Matrix, intensity of competition between firms is high in

Answer - Upper half

Question 3 - Oligopoly is a dominant form of market structure mainly because

Answer - Technology and high capital cost make very large scale of operations inevitable

Question 4 - With very high tax rates, the revenues collection of the government

Answer - Shrinks

Question 5 - The kinked demand curve for oligopoly pricing has a kink where objective (actual) demand curve intersects subjective demand curve

Answer - At the monopoly price level

Question 6 - One of the reasons for financial meltdown in 2008 was that investment banks, hedge funds and private equity firms

Answer - Were highly leveraged

Question 7 - The Prisoners’ Dilemma case focuses on importance of

Answer - Communication

Question 8 - Dead weight loss due to tax is the highest when

Answer - Demand is relatively elastic and supply is also relatively elastic

Question 9 - Large investment in fixed assets and capital intensity

Answer - Reduces return on equity

Question 10 - High skimming price is recommended for new products if

Answer - The firm is operating under condition of increasing return and reducing cost

Question 11 - In a competitive market with elastic demand consumers’ surplus at equilibrium is

Answer - Is neutral to elasticity of supply

Question 12 - Higher efficiency and reduced cost have become necessary in recent times because

Answer - In competitive environment, margins are under pressure

Question 13 - Strong Brand equity gives greater competitive advantage to firms because

Answer - All of the above

Question 14 - Applying Porter’s Five Force Model to traditional businesses, the impact of information technology on competitive advantage is

Answer - Generally negative

Question 15 - Due to low switching costs rivalry between firms

Answer - Intensify

Sample Paper 2

SP Jain Center of Management, Dubai

Professor H. Mankad

Final Exam – 20^th May 2010

Batch – April 2010 batch

Duration – 3 Hours

Open Book/Notes/Black Board, Hard Copy Submission, No Internet

Question 1 (25 marks)

Write a detailed explanatory note with appropriate examples on any one of the following

a) Changing demographics structure and its impact on Managerial Economics

b) The story of oil prices is a never ending story

c) Lessons learned from Managerial Economics forms the base for success of business

Question 2 (40 Marks)

Explain any four of the following statements. Your explanation needs to cover the meaning as well as context of the statement. Practical examples and sketches of diagrams, where required, will enrich your response.

a) Government interventions improve market outcomes

b) Perfect competition is an illusion (No need to explain equilibrium under perfect competition)

c) Firms rarely aim at maximum profits. Their goals are many and varied.

d) The price / product outcome of oligopoly depends on the nature of the oligopoly. It may vary from case to case

e) Porter’s 5 force model bridges gap between theory and practice of Micro-economics (Please do not explain Porter’s model)

f) Present day businesses will survive competition only with reduced cost. And cost can be reduced in many ways.

g) Sellers in the real world compete, but rarely on the basis of price

h) The phenomenal growth of Reliance (or any other specified corporation of your choice) teaches many lessons in economics and business

Question 3 (15 + 10 Marks)

a) Discuss in detail 2 important variables that influence the profitability of any business. Support your answer with appropriate real life examples

b) Identify and discuss 2 important variables that will influence profitability of any two of the following business (You are free to assume the nature and scope of the product, but specify these assumptions)

i. A Chain of modern uni-sex beauty parlors

ii. An education institute offering 1-year certification course in Mandarin (Chinese language) in a real time distance learning mode through Internet

iii. A publisher of new life style magazine for Odyssey generation

iv. A new health food manufacturing company

v. A consumer electronics store catering to middle income neighborhood

Sample Paper

SP Jain Center of Management, Dubai

Professor H. Mankad

Retest – January 2011

Duration – 2 Hours 30 Minutes

Open Book/Notes/Black Board, Hard Copy Submission, No Internet

Question 1 (16 marks)

Write Explanatory notes with appropriate examples on any one of the following

a) Price Discrimination

b) Changing Demographic structure and its impact on Managerial Economics

c) Assumption of ‘rationality’ and the role of expectation in microeconomics

d) Technological Connectivity and its influence on Managerial Economics

e) Changing Consumer landscape and its influence on Managerial Economics

(Evaluation Criterion: Superior Response – 11 or more marks, Average response 7-10 marks, inadequate, poor and / or sketchy response 6 marks or less)

Question 2 (14 + 6 = 20 Marks)

a) Discuss in Detail two important variables that influence the pricing of any product or service. Support your response with appropriate real life examples.

b) Identify & discuss two important variables that will influence pricing of any two of the following businesses: (You are free to assume the nature * scope of the product or services but specify these assumptions)

I. Prime Time (8 p.m. to 10 p.m.) Rate of advertising on a newly launched 24 Hour TV news Channel

II. A One year certification Course in Arabic offered in a real time distance-learning mode through Internet

III. A New low fat chocolate introduced by an MNC

IV. Branded contact lenses for the eyes

V. Admission prices to a charity concert of a renowned musician

(Please note that in the sub-segment of this question 2b, you have to discuss the 2 variables that influence pricing. You are not required to suggest and justify a specific price)

Question 3 (24 Marks)

Explain any three of the following statements. Your explanation needs to cover the meaning as well as context of the statements. Practical examples and sketches of diagrams, where required, will enrich your response.

a) Government often intervene to improve market outcomes

b) Happy is the business that sells to a market that is income elastic and price inelastic

c) Perfect competition is an illusion

d) In recent years, technology has helped bring about fairer competition

e) Firms rarely aim at maximum profits. Their goals are many and varied

f) Economics is all about tradeoffs

g) Pricing the ‘new economy’ products is an exercise in guess work and has no theory back up

h) Not all situations where a monopolist charges high monopoly price at home and low competitive prices abroad can be classified as ‘dumping’.

(Evaluation Criterion: Superior Response – 7-8 Marks, Average Response – 4-6 marks, Inadequate, poor and / or sketchy response 3 marks or less)

Sample Paper

SP Jain Center of Management, Dubai

Professor H. Mankad

Retest – January 2011

Duration – 2 Hours 30 Minutes

Open Book/Notes/Black Board, Hard Copy Submission, No Internet

Question 1 (16 marks)

Write Explanatory notes with appropriate examples on any one of the following

a) Price Discrimination

b) Changing Demographic structure and its impact on Managerial Economics

c) Assumption of ‘rationality’ and the role of expectation in microeconomics

d) Technological Connectivity and its influence on Managerial Economics

e) Changing Consumer landscape and its influence on Managerial Economics

(Evaluation Criterion: Superior Response – 11 or more marks, Average response 7-10 marks, inadequate, poor and / or sketchy response 6 marks or less)

Question 2 (14 + 6 = 20 Marks)

a) Discuss in Detail two important variables that influence the pricing of any product or service. Support your response with appropriate real life examples.

b) Identify & discuss two important variables that will influence pricing of any two of the following businesses: (You are free to assume the nature * scope of the product or services but specify these assumptions)

I. Prime Time (8 p.m. to 10 p.m.) Rate of advertising on a newly launched 24 Hour TV news Channel

II. A One year certification Course in Arabic offered in a real time distance-learning mode through Internet

III. A New low fat chocolate introduced by an MNC

IV. Branded contact lenses for the eyes

V. Admission prices to a charity concert of a renowned musician

(Please note that in the sub-segment of this question 2b, you have to discuss the 2 variables that influence pricing. You are not required to suggest and justify a specific price)

Question 3 (24 Marks)

Explain any three of the following statements. Your explanation needs to cover the meaning as well as context of the statements. Practical examples and sketches of diagrams, where required, will enrich your response.

a) Government often intervene to improve market outcomes

b) Happy is the business that sells to a market that is income elastic and price inelastic

c) Perfect competition is an illusion

d) In recent years, technology has helped bring about fairer competition

e) Firms rarely aim at maximum profits. Their goals are many and varied

f) Economics is all about tradeoffs

g) Pricing the ‘new economy’ products is an exercise in guess work and has no theory back up

h) Not all situations where a monopolist charges high monopoly price at home and low competitive prices abroad can be classified as ‘dumping’.

(Evaluation Criterion: Superior Response – 7-8 Marks, Average Response – 4-6 marks, Inadequate, poor and / or sketchy response 3 marks or less)