M.B.A-M.B.A Finance 2nd Year MANAGERIAL ECONOMICS(Acharya Nagarjuna University (ANU), Guntur, Andhra Pradesh-2012)

Executive M.B.A. DEGREE EXAMINATION, MAY 2012.
First and Second Years
Paper III — MANAGERIAL ECONOMICS
Time : Three hours Maximum : 75 marks
SECTION A — (3 × 5 = 15 marks)
Answer any THREE of the following.
1. (a) Demand function.
(b) Production function.
(c) Price leadership.
(d) IRR.
(e) Behavioural theory.
(f) Economic concept of profit.
SECTION B — (3 × 15 = 45 marks)
Answer any THREE questions.
2. How far managerial economics is useful in decision making?
3. Explain the techniques of forecasting demand for new products.
4. Outline the empirical studies on production and costs.
5. How is price determined under oligopoly?
6. What are the merits and demerits of NPN method of capital budgeting?
7. State the difficulties in the measurement of profit. SECTION C — (15 marks)
8. X Ltd., an FMCG company, has been spending huge amounts on advertisements. It has collected the following data on advertisement expenditure and demand for its product for the last 5 years :
Year 2004 2005 2006 2007 2008
Advt. Expenditure Rs. Crore. :
10 15 20 25 30
Demand (Qty) in lakhs of units :
100 112 115 120 122
(a) Estimate the demand for the years 2009 and 2010 when the advertisement
expenditure is expected to be Rs. 32 and Rs. 35 crores respectively.
(b) What is your opinion about the estimation you have made?