LOVELY PROFESSIONAL UNIVERSITY Form/LPUO/AP-3

Home-Work1
LITCA Departmet o! "aa#emet
Name of the faculty member: $a%&eet S'#( Sa'
Course No. ECO )1) Course Title: "ANA*ERIAL ECONO"ICS
Section E1+$1/,++$1/,-+$1
Max. Marks: 1) Date of Submission: 28/0/20!28 "an 20#
S. o. Ro%% No. Top'/
No.
O0&e/t'1e2 o! A/a3em'/
A/t'1't4
Top'/ $%aluation Details
$ach
stu&ent
'ill
attem(t all
the
)uestions.
To make the stu&ents
un&erstoo& of basic mana*erial
economic conce(ts an& ho'
these conce(ts are a((lie& in
economic &ecision makin* in
(resent &ay economy
$ach stu&ent 'ill attem(t all the
)uestions *i%en in the assi*nment i.e.
+ )uestions for each stu&ent. , test
'ill be con&uct after submission of
assi*nment.
.# There are ) fi%e marks for
submission.
2.# Test carries 15 marks
-ut only those stu&ents 'ill be
allo'e& to sit in test those 'ho ha%e
submitte& their assi*nments.
!Submission means assi*nment
u(loa&e& on .MS#. 2 )uestions 'ill
aske& in test out of the + )uestions
com(risin* + marks each
Date6 S'#.
o! Fa/7%t4 mem0er
Remark2 04 HOD 8"a3ator49
S'#. o! HOD :'t( 3ate
Remark2 04 HOS 8"a3ator49
S'#. o! HOS :'t( 3ate
HW 1 ECO )1)
,*ricultural commo&ities are kno'n to ha%e a (rice inelastic &eman& an& to be
necessities. $x(lain 'hy the income of farmer falls !a# after a *oo& har%est an&
!b# in relation to incomes in other sectors of the economy.
2 /n /n&ia0 'oul& you ex(ect the (rice elasticity of &eman& to be hi*her for Maruti
S12 automobiles or for automobiles in *eneral3 4hy3
5 4hy is Mana*erial $conomics becomin* such a (o(ular sub6ect of stu&y in
schools an& colle*es3
2 4oul& you ex(ect (rice elasticity of &eman& for electricity for resi&ential use in
/n&ia to be hi*her or lo'er then that for in&ustrial use3 4hy3
+ The *o%ernment increases income tax from 207 to 2+7 on salary income. 4hat
im(act &oes this ha%e on &eman& for consumer *oo&s3 Sho' ho' e)uilibrium
(rice is &etermine& 'ith a &eman& an& su((ly &ia*ram.
8 Discuss the follo'in* statements an& critically analy9e them. 4ith the hel( of a
&eman& an& su((ly &ia*ram.
!# :rotectin* ,merican tomato (ro&ucers from Mexican tomatoes 'ill
lo'er or increase the (rice of tomatoes in the .nite& States3 $x(lain 'ith
a &eman& an& su((ly &ia*ram.
!2# ;a(i& increase in colle*e tuitions 'ill lo'er the &eman& for colle*e.
8
<or each of the follo'in*0 ex(lain 'hether )uantity &eman&e& chan*es because
of &eman& shift or (rice chan*e0 an& &ra' a &ia*ram to illustrate your ans'er.
!#,s a result of &ecrease& military s(en&in*0 (rice of army boot falls.
!2# <ish (rices fall after the (o(e allo's catholics to eat meat on <ri&ay.
!5# Deman& for blankets in "alan&har rises after an excessi%ely harsh 'inter.
=
4oul& you ex(ect the (rice elasticity of &eman& for electricity for resi&ential use
in /n&ia to be hi*her or lo'er than that for /n&ustrial use3 4hy3
0
, (ro&ucer raises the (rice of his (ro&uct from ;s. 0 (er unit to ;s. + (er unit.
,s a result0 the )uantity &eman&e& an& sol& by him &ecreases from 2+0 units to
200 units. Calculate (rice elasticity of &eman& usin* mi& (oint metho&.
Calculate cross (rice elasticity of &eman& bet'een automobiles an& (etrol at
(etrol (rice of > (er *allon an& sales of cars at 8 million units. 4hat 'oul& be
cross (rice elasticity of &eman& bet'een automobiles an& (etrol sales if
automobiles &ecline& from 8 million to ? million 'ith an increase in (etrol (rice
from > to >.20 (er *allon3 .se mi& (oint metho& for your calculations.
2
$x(lain the im(ortance of the conce(t of cross (rice elasticity of &eman& in !#
formulatin* (ro(er (rice strate*y !2# analy9in* &e*ree of com(etition (re%ailin*
in an in&ustry.
5
@ther thin*s bein* the same 'hat 'oul& ha((en to the su((ly of a (articular
(ro&uct if :
!a#:rice of the (ro&uct &ecreases
!b#, technolo*ical breakthrou*h enables the *oo& to be (ro&uce& at a
si*nificantly lo'er cost
!c#The (rice of in(uts use& to (ro&uce the (ro&uct increases
!&# The (rice of substitute commo&ity &ecreases.

2
, consumer &eman&s 2000 units of a commo&ity 'ith an income of ;s 50000. /f
income &ecreases to ;s 2+000 an& &eman& &ecreases to 5+00 units0 calculate
income elasticity of &eman&.
+
;ohan consumes t'o commo&ities0 'heat an& rice. The mar*inal utility &eri%e&
by him from rice is t'o an& half time the utility &eri%e& from the mar*inal utility
of 'heat. /f 'heat is a%ailable for ;s.2 /k*0 'hat (rice 'ill he be 'illin* to (ay
for rice in or&er to maximi9e his utility3