CA2-MANAGERIAL ECONOMICS(MICRO)-MB101

TOTAL MARKS:25=5*5

1. Find out the price elasticity of demand for rice from monthly demand
schedule for rice for a family is given below-

Price (Rs/Kg.) Quantity Demanded

12 21
13 18

2. Consumer demand function for good X is given by the equation P=100-

Q. What is the price elasticity of demand if the price of the good is
Rs.60?

3. The production function of a firm is estimated to be Q=√L√K. The cost of

inputs labour(L) and capital(K) are Rs.2 and Rs.4 per unit respectively. If
the firm producing Q has a budget constraint of Rs.80. What is the
maximum output?

4. A firm sells its output for Rs.20 per unit. The cost function is TC=16+17Q-
9Q2+Q3.What it its profit function?

5. A firm has the following production function.

Q=4L2+6K2-2LK
Budget constraint of the firm is Rs.720, the market going wage rate,
w=Rs.15 and cost of capital, r=Rs.15.Compute the optimum output.