SHAHEED BENAZIR BHUTTO UNIVERSITY, SHAHEED BENAZIRABAD

Knowledge Commitment Leadership

DEPARTMENT/CLASS: MBA___ _Session 2017 (Supplementary) Examination Time Allowed: 3hours
Subject: Managerial Economics Date: 00-00-2017 Roll No.

SECTION-B (ESSAY)
Note: Attempt any THREE questions. All question carry equal marks. 100 marks
Q.No.1- Define decision making process and its role in managerial economics.
Q.No.2- Assume that you would like to put money in an account today to make sure your child has
enough money in 10 years to open a business. If you would like to give him $10,000 in 10 years,
and you know you can get 5% interest per year from a savings account during that time, how
much should you put in the account now?
Q.No.3- Define the scope of managerial economics and its objectives?
Q.No.4- (a) Explain the positive and normative economics with examples.
(b) Objectives of managerial economics.
Q.No.5- Define indifference curve along with examples and graph.
Q.No.6- Explain the consumer theory?
Q.No.7- Andrew operates a small shop specializing in party favors.
He owns the building and supplies all his own labor and money capital.
Thus, Andrew incurs no explicit rental or wage costs. Before starting his own business Andrew
earned $1,000 per month by renting out the store and earned $2,500 per month as a store manager
for a large department store chain. Because Andrew uses his own money capital, he also
sacrificed $1,000 per month in interest earned on U.S. Treasury bonds. Andrew’s monthly
revenues from operating his shop are $10,000 and his total monthly expenses for labor and
supplies amounted to $6,000.
Calculate Andrew’s monthly Accounting and Economic profits.
Q.No.8- Write short notes on any two of the following :
a) Monetary and Fiscal policy
b) Theory of the firm vs. industry
c) Role of profit in organization

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