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THE UNIVERSITY OF MANCHESTER

MANCHESTER BUSINESS SCHOOL WORLDWIDE

DEGREE EXAMINATIONS June 2005

MASTER OF BUSINESS ADMINISTRATION

COURSE – MANAGERIAL ECONOMICS

TIME ALLOWED: 3 HOURS plus 10 Minutes Reading Time*

NOTE TO INVIGILATORS

THIS IS AN OPEN BOOK EXAMINATION

*During the 10 minutes reading time, you may write on this paper but
not in the answer book

Instructions to students

1. Answer any THREE Questions, all questions carry equal marks.

2. Marks will be deducted for answers of an illegible nature.

3. Do not staple/attach any foreign materials into the examination answer books

4. Please ensure that you write your Exam number and paper reference number on the front of
your answer book. Failure to do so may result in non-marking of your script.
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NB: It is imperative that case study materials and/or examples be used where
appropriate in order to support your answers. Candidates are advised to select from
the case study materials distributed during your workshop session.

1. Either: (a) What insights, if any, do both the Marris and Williamson models of
managerial behaviour provide into the strategic behaviour of management today?

Or: (b) Critically examine the extent to which the models of Simon, Cyert and
March, and latterly Ricketts, provide a different insight into management decision
making.

2. Define and explain the economic concept of (price) elasticity. In your answer
please refer to Baumol pricing and the total revenue test. Give some examples as to
how it could assist in pricing decisions.

3. Evaluate the extent to which contemporary production techniques can deliver


sustainable cost leadership to firms. Be specific. Illustrate your answer with relevant
case studies where appropriate.

4. Identify the main economic principles of a national competition policy regime with
responsibility for monitoring the economic behaviour of competing firms in an
economy.

5. Either: (a) “Market definition (relevant market) and the measurement of market
shares form only one part of an anti-trust investigation. An investigation will normally
look at the potential for new entry, other evidence of market power, and the individual
behaviour of undertakings”. Discuss and critically examine this statement.

Or: (b) "Cartels are a form of anti-competitive activity. Detecting cartels and taking
action against their members is one of the top enforcement priorities under national
competition legislation". Critically examine the factors that may facilitate the
establishment, operation and detection of cartels. Use case study material to support
your answer.

6. It has been commented that “Game theory offers management a set of strategic
tools for decision-making”. Do you agree or disagree with this statement? Why?
Provide some example.

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