Business Economics Question Paper

8819 WordsAug 1, 201336 Pages
eco NITIE, MUMBAI 400 087 I MODULE ENDING EXAMINATION PGDIM XIth BATCH EC01 BUSINESS ECONOMICS Date: 23 September 2004 Time: 9.30 am to 12.30 am Maximum marks: 60 Instructions: Attempt any three questions out of four. All questions carry equal marks. Start each answer on a fresh page. Parts of the question must be answered together. Use appropriate tables, diagrams, equations to support your answers. Assume suitable assumption wherever necessary. Q 1(a) Mrs. Palekar has Rs 1 million, which she must allocate between Indian government securities and common stocks. If she invests it all in the Indian government securities, she will receive a return of 5%, and there is no risk. If she invests it all in common stock, she…show more content…
ii) Interpret your results. iii) What will be your choice of system of production and why? 10 Q 2(b) Surgical Systems Limited makes a proprietary line of disposable surgical syringe. The company grew rapidly during the 1990s and continued to gain wider hospital acceptance as an alternative to reusable syringe as the use of reusable syringe leads to spread of infections and diseases. However, price competition in the medical supplies industry is growing rapidly in the increasing price-conscious new millennium. During the past year, Surgical Systems Limited sold 6 million units at a price of Rs 14.50 per unit, for total revenue of Rs 87 million. During the current year, Surgical Systems Limited unit sales have fallen from 6 million units to 3.6 million units following a competitor’s price cut from Rs 13.95 to Rs 10.85 per unit. i) Calculate the arc cross-price elasticity of demand for Surgical
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