M.B.A. DEGREE EXAMINATION, NOVEMBER 2017
Industry Integrated
ECONOMICS FOR MANAGERS
(2017 onwards)
Time 2 Hours Maximum 50 Marks
Part A (10 x 1 10)
Answer the following questions.
Each right answer scores 1 mark; each wrong answer carries
0.25 marks.
1. Demand is determined by
Price of the product
Relative prices of other goods
Tastes and habits
All of the above
2. When a firm's average revenue is equal to its average
cost, it gets ——————
Super profit Normal profit
Sub normal profit None of the above
3. Managerial economics generally refers to the integration
of economic theory with business
Ethics Management
Practice All of the above
Sub. Code
13
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4. Given the price, if the cost of production increases
because of higher price of raw materials, the supply
Decreases Increases
Remains same Any of the above
5. The cost recorded in the books of accounts are considered
as
Total cost Marginal cost
Average cost Explicit cost
6. A Joint Stock Company is managed by the Board of
Directors elected by ——————
Top management
Shareholders
Employees of company
None of the above
7. Under —————— price is determined by the
interaction of total demand and total supply in the
market.
Perfect competition
Monopoly
Imperfect competition
All of the above
8. Under perfect competition, price is determined by the
interaction of total demand and ——————
Total supply Total cost
Total utility Total production
9. The out of pocket costs are ——————
Sunk costs Marginal costs
Explicit costs Social costs
10. The shod run Average Cost curve is —————— shaped
V U
L Any of the above
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Part B x 5 25)
Answer any five questions.
11. Explain demand curve and the determinates of demand.
12. Explain different types of production function.
13. Explain the different market structure and its
characteristics.
14. Explain cost volume profit analysis with an example.
15. Describe the effects of inflation on output and
distribution of income.
16. Explain the concept of Macroeconomic policy and discuss
its various goals and objectives.
17. Explain the role of managerial economics in business
economy.
Part C x 15 15)
Case Study
18. IT sector has made significant contributions to India's
economic growth in terms of GDP increase in foreign
exchange earnings as well as employment generation. Its
contribution to GDP has increased tenfold in the last
decade from 0.6% to till 2009-10. The sector has
helped India transform from a rural and agriculturebased
economy to a knowledge-based economy. Besides
this, the lives of people have been positively influenced by
direct or indirect contribution of IT sector to various
parameters such as employment, standard of living, percapita
income etc. In the last ten years the IT sector in
India has grown at an average annual rate of 28%. India
accounts for almost 51% of the global sourcing market.
India has emerged as the preferred destination for IT
services owing to the cost advantage and talent pool.
Exports contribute around 75% of the total revenue from
the IT sector in India. However due to increased exportorientation
and lesser domestic consumption the sector
suffered a major hit in the recession that shook the globe
in 2008-09. In the year 2010, different economies have
started recovering but at varying pace. Indian companies
have subsequently begun tapping other geographical
markets and domestic consumption has also relatively
increased.
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According to NASSCOM, India can reach $130 Billion in
IT revenue by 2015, with CAGR of 14%. With this, it
would be contributing to of annual GDP and creating
14.3 million employment opportunities. With the
government taking active measures to stimulate the
growth of IT sector with the emergence of BPO and KPO
over last few years, India is expected to climb the global
value and knowledge chain. In long-term we can expect
the Indian IT sector to see good growth. Different
segments of the sector are set to experience different
growth rates. BPO industry has experienced high growth
but the Software and Information Technology Enabled
Services (ITES) segment is expected to see slower growth.
However, on an individual basis each company has to
compete with other domestic as well as global players.
They have to adapt new business models to compete with
global players e.g. Cloud, on-demand services, and SaaS.
With increased threat from countries like China, the
companies will suffer loss unless they change business
models.
It is very important that while investing in a company, an
investor selects a sector, where the long-term future
prospects are bright. In the above case, we have seen that
the IT sector is expected to have good growth in the long
run. Also, it is equally important that the company has
an excellent financial track record and its long-term
future prospects are Green (Very Good).
Questions:
What are the growth drivers of the IT sector in
India?
Why was the Indian IT industry hit more severely
during the US Recession?
Has Globalization helped India to gain employment
opportunities?
What is the role of Private sector in IT Industry?
Explain the role of IT sector in FDI of India.
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