Rift Valley University

Burayu Campus
MBA Program

Final Exam for the Course: Managerial Economics

 Switch off your Phone Time Allowed: 1:30hrs
 Attempt all questions Maximum Weight: 50%
 Any attempt for cheating can result in cancelation of result

Name: ----------------------------------------------------------- ID No. ----------------------------------

1. The term demand forecasting means predicting the future demand for a product; that is
estimation of the most likely future demand for product under given conditions with regard
to: production, sales and investment, expansion, employment of manpower etc. List and
discuss methods of demand forecasting. (10%)
2. The Qualitative methods of demand forecasting aims at collecting opinions of those
possessing knowledge of the market, such as the sales representatives, sales executives,
professional marketing experts, and marketing consultants. List and explain qualitative
methods of demand forecasting. (10%)
3. The firm is an organizational activity that transforms factors of production, or productive
inputs, into outputs of goods and services. Discuss in detail factors of production. (10%)
4. Suppose that the price elasticity of demand for a product is -2. If the price of this product fell
by 5%, by what percentage would the quantity demanded for a product change? (2%)
5. Suppose that the price and quantity demanded for a good are $5 and 20 units, respectively.
Suppose further that the price of the product increases to $20 and the quantity demanded falls
to 5 units. Calculate the price elasticity of demand and interpret the result (5%)
6. Consider the following sales data for product A for the past 10 yea
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Demand 10,000 12,000 14,000 17,000 18,000 20,000 21,000 22,000 23,000 28,000
a. State the sales forecast equation (8%)
b. Forecast sales for the next 6 years (5%)