𝐀𝐢𝐦𝐚 𝐬𝐨𝐥𝐯𝐞𝐝 𝐞𝐱𝐚𝐦 𝐬𝐨𝐥𝐮𝐭𝐢𝐨𝐧𝐬 𝟐𝟎𝟐𝟏 

𝐅𝐨𝐫 𝐒𝐨𝐥𝐮𝐭𝐢𝐨𝐧 𝐂𝐚𝐥𝐥 𝐚𝐭 +𝟗𝟏-𝟗𝟗𝟏𝟏𝟖𝟗𝟗𝟒𝟎𝟎 (𝐖𝐡𝐚𝐭'𝐬 𝐀𝐩𝐩 𝐀𝐯𝐚𝐢𝐥𝐚𝐛𝐥𝐞)

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Attempt all the questions. All questions are compulsory. Each question carries 4 marks. There is No Negative Marking for wrong answer/s.
Please note: There are 25 questions out of which Q.No.21-25 are based on the Case Study.
Subject Code: GM04
Component name: TERM END
Assignment Start Date: 10/02/2021
Assignment End Date: 20/02/2021
Question 1:- Besides analyzing the managerial problems of business units, managerial economics aims at finding out optimal solutions to the business problems of firms.

a)   TRUE                        
b)   FALSE                        

Question 2:- When a person decides to invest his money in the debentures of a company, he compares the return of his investment with what he could have earned if the money was kept in a bank as fixed deposit. What kind of cost is he working on?

a)   Fixed Cost                        
b)   Variable cost                        
c)   Marginal cost                        
d)   Opportunity Cost                        

Question 3:- Total Cost, TC, is the sum total of the cost of total units produced. This total cost, when divided by the number of units produced is termed as________.

a)   Fixed Cost                        
b)   Variable cost                        
c)   Average cost                        
d)   Opportunity Cost                        

Question 4:- ___________States that as a consumer increases the consumption of a product, the utility gained from successive units goes on decreasing.

a)   Law of Demand                        
b)   Law of Returns to Scale                        
c)   Law of Diminishing Marginal Utility                        
d)   Law of Supply                        

Question 5:- The locus of points, each representing a different combination of two goods, which provide the same level of utility to the consumer is known as________.

a)   Indifference Curve                        
b)   Isoquants                        
c)   Marginal Curve                        
d)   Kinked demand Curve                        

Question 6:- The consumer is in equilibrium when he has maximized his utility subject to his budget.

a)   TRUE                        
b)   FALSE                        

Question 7:- The demand of_________goods increases with increase in their price and vice-versa.

a)   Substitute Good                        
b)   Giffen Good                        
c)   Complementary good                        
d)   Poor quality good                        

Question 8:- The measure of the percentage change in the demand for a commodity due to one percent change in the price of the commodity,ceteris paribus is known as__________.

a)   Income elasticity of demand                        
b)   Price elasticity of demand                        
c)   Cross elasticity of demand                        
d)   Promotional elasticity of demand                        

Question 9:- The demand for a product was found to change from 1200 units to 900 units when the income of the consumer fell from Rs25,000 to Rs21,000. Compute the income elasticity of demand for the product.

a)   1                        
b)   1.56                        
c)   2                        
d)   2.56                        

Question 10:- The cross elasticity of demand is positive for complementary goods.

a)   TRUE                        
b)   FALSE                        

Question 11:- Which of the following properties of Isoquant does not hold true?

a)   Isoquants are downward sloping                        
b)   Isoquants are concave to origin                        
c)   Isoquants never intersect each other                        
d)   Higher the isoquant denote higher level of output                        

Question 12:- Which of the following is not the factor responsible for causing economies of scale?

a)   Specialized labour                        
b)   Better quality of machines                        
c)   Difficulties in teamwork                        
d)   Training and development                        

Question 13:- Long Run Average Cost Curve is derived by combining _________.

a)   Marginal Cost Curves                        
b)   Short Run Average Cost Curves                        
c)   Fixed Cost Curves                        
d)   Total Cost Curves                        

Question 14:- Which of the following statements is true- When Q=0?

a)   TC=TVC                        
b)   TC>TVC                        
c)   TC
d)   None of these                        

Question 15:- The Game Theory approach explains-

a)   Nature of market structure                        
b)   Strategic Interaction among the Oligopoly firms                        
c)   Cost Behaviour of Firms under Perfect Competition                        
d)   Determination of equilibrium under Monopoly market                        

Question 16:- The basic premise of _______theory is that the sales maximization rather than profit maximization is the plausible goal of the business firm.

a)   Baumol`s                        
b)   Marris                        
c)   Williamson`s                        
d)   Cyert and March                        

Question 17:- Which of the following are Collusive Oligopoly Model?

a)   Cournot`s Duopoly Model                        
b)   Sweezy`s Kinked Demand Curve Model                        
c)   Cartels                        
d)   None of these                        

Question 18:- Monopoly form always earn supernormal profit.

a)   TRUE                        
b)   FALSE                        

Question 19:- Firm`s equilibrium under Oligopoly is indeterminate.

a)   TRUE                        
b)   FALSE                        

Question 20:- Shut down point lies where AR=AC .

a)   TRUE                        
b)   FALSE                        

Case Study
In most categories of consumer products, there is one dominant segment, glucose in biscuits, cola in soft drinks, vanilla in ice creams. These are good categories, but the same thing can be extended to the other product categories. Now the tendency is that when a new player wants to enter an established product category, he automatically looks at the dominant segment first. This is known as "vanilla trap". A trap because you, as a new entrant, can never come close to challenging the dominance of the biggest player in the vanilla segment. For example When Cadbury India decided to extend to biscuits, it started of by challenging Parle in glucose, a segment where Parle`s strength is unmatched, Cadbury didn`t succeed. By the time it launched Chocolate biscuits, it was too late. Then take Britannia, for years, it tried to break Parle`s dominance in glucose biscuits, with little success. It then went for number of branded products that gave it an aura and gained it respect and attention. Little hearts was so different, it gave Britannia a distinction. And then the company launched Tiger, a glucose biscuit. Tiger i snow a large brand in the glucose segment. You have got to do something that is very specially your own. Otherwise the consumer won`t pay you attention and trade won`t want to stock your product. Therefore, you can`t fight the dominant guy in the dominant segment. get into the segment`s volume indirectly instead.

Question 21:- What market structure is being referred in the case?

a)   Perfect Competition                        
b)   Monopoly                        
c)   Monopolistic Competition                        
d)   Oligopoly                        

Question 22:- Which unique characteristics in this kind of market will help you to sustain and grow?

a)   Price Discrimination                        
b)   Product Differentiation                        
c)   Unique Supply curve                        
d)   None of these                        

Question 23:- Which of the following are not the characteristics of the market stated in the case?

a)   Large number of sellers                        
b)   Restrictions in entry                        
c)   Product Differentiation                        
d)   Perfect factor mobility                        

Question 24:- Demand Curve of the firm in such market is-

a)   Downward Sloping                        
b)   Upward Sloping                        
c)   Horizontal Line                        
d)   None of these                        

Question 25:- In such market as discussed in case, the producer of each competing brand has, some control over the price of their product and extent of his power to control depends on how strongly the buyers are attached to your brand.

a)   TRUE                        
b)   FALSE