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    ME Indvidual Assignment

    Uploaded by

    Firew Alga

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    ME Indvidual Assignment

    Uploaded by

    Firew Alga
    2 views3 pages

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
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    Download as docx, pdf, or txt
    2 views3 pages

    ME Indvidual Assignment

    Uploaded by

    Firew Alga

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    GLC

    DEPARTMENT OF MANAGEMENT
    MBA PROGRAM
    Managerial Economics Individual Assignment
    1. ATTEMPT ALL QUESTIONS
    2. GIVE CONCISE AND BRIEF ANSWER ON THE SEPARATE ANSWER SHEET
    1. State the general ‘Law of Demand’. What do you think are the
    factors that determine your demand for a Personal Computer?
    2. Petrol and car are complements as they are often enjoyed together.
    When the price of petrol increases, what happens to the supply,
    demand, quantity supplied, quantity demanded, and the price in the
    market for the car? Include curve in your illustration.
    3. A shopper purchases 80 units of a commodity when its price is 1 Birr
    per unit and purchases 48 units when its price rises to 2 Birr per unit.
    What is the price elasticity of demand for the commodity?
    4. Define economies of scale, diseconomies of scale and explain why
    they might arise. Distinguish them with the help of graph.
    5. Discuss the relationship between average fixed costs, average
    variable costs, average total costs and marginal costs. Explain why a
    business managers needs to know about each of these in relation to
    the operations of a business.
    6. “Higher income usually causes a household to buy more things.” Is
    this statement true or false? Explain it with proper justification.

    1
    7. Describe various methods of measuring elasticity of demand and
    shed light on the practical importance of elasticity of demand.
    8. The price elasticity of demand for color TVs is estimated to be -2.5.
    If the price of color TVs is reduced by 20%, how much percentage
    increase in the quantity of color TVs sold do you expect?
    9. Two goods have Cross elasticity of demand which is equal to 1.2,
    then:
    A.Would you describe the two goods as substitutes or
    complements? And why?
    B.If the price of one of the goods increases by 5%, what will happen
    to the demand for the other good, holding other factors constant?
    10. Suppose that output is a function of labor and capital. Assume
    that labor is the variable input and capital is the fixed input. Explain
    the law of diminishing marginal product. How is the law of
    diminishing marginal product reflected in the total product of labor
    curve?

    2
    Quantity Quantity
    Price
    Demanded Supplied
    (In Birr)
    (Per Month) (Per Month)
    3 1,200 600
    6 1,000 700
    9 800 800
    12 600 900
    15 400 1,000
    B.Discuss the equilibrium price and quantity.
    C.Describe the situation at a price of 15 Birr, what has occurred?
    D.Describe the situation at a price of 6 Birr, what has occurred?
    12. From your knowledge of the relationships among the various
    types of costs, complete the following table.
    Output Total Total Total Average Average Average Marginal
    Cost Fixed Variable Fixed Variable Total Cost
    Cost Cost Cost Cost Cost
    100 $ 260 $ ____ $ 60 2 0.6 2.6 ______
    200 ______ ______ _______ ______ ______ ______ 0.30
    300 ______ ______ _______ ______ 0.50 ______ ______
    400 ______ ______ _______ ______ ______ 1.05 ______
    500 ______ ______ 360 ______ ______ ______ ______
    600 ______ ______ _______ ______ ______ ______ 3.00
    700 _____ ______ _______ ______ 1.60 ______ ______
    800 2,040 ______ _______ _______ ______ _______ _______
    _
    WISH YOU A GOOD LUCK!!!

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