GM04

MANAGERIAL ECONOMICS

Assignment – I

Assignment Code: 2014GM04A1    Last Date of Submission: 15th April 2014

                                                                                                   Maximum Marks: 100

Attempt all the questions. All the questions are compulsory and carry equal marks.

Section‐A

1.    What is elasticity of demand? Explain price, cost and income elasticity of demand used in managerial decision making process.

2.    Diagrammatically represent the relationship between AFC, AVC, Average Cost and Marginal Cost.

3.    Why is the knowledge of Managerial Economics necessary for business managers in discharging their managerial functions successfully? Explain with the help of an example.

4.    Enumerate different laws of production and explain the law of variable proportion by giving suitable example.

Section‐B

5.    (a)    Katherine advertises to sell cookies for $4 a dozen. She sells 50 dozen, and decides that she can charge more. She raises the price to $6 a dozen and sells 40 dozen. What is the elasticity of demand? Assuming that the elasticity of demand is constant, how many would she sell if the price were $10 a box?    (10)