14/16 AHMADU BELLO WAY, VICTORIA ISLAND, LAGOS

SCHOOL OF MANAGEMENT SCIENCES

MARCH 2014 EXAMINATION

COURSE CODE: BHM 303 CREDIT UNIT: 3

COURSE TITLE: Managerial Economics

TIME ALLOWED: 21/2 Hours

Instructions: 1. Attempt question Number one (1) and any other two (3).

2. Question number 1 is Compulsory and carries 30 marks, while

the other questions carry 20 marks each.

3. Present all your points in coherent and orderly manner.

1a. Suppose that the unit price of a commodity is defined by:

P=100 – 2Q

Then, TR= PQ = (100 – 2Q) Q

100Q – 2Q2

Suppose all so that the total cost of producing this commodity is defined

by the cost function TC = 100 + 0.5Q2

a. You are required to apply the first- order condition for profit maximization.

b. Determine the profit- maximizing level of output.

1b. State and Describe the 2 Scope of Managerial Economics.

2. Let the profit of an hypothetical firm be given as:

∏ = f(X, Y) = 100X – 2X2 – XY + 180Y – 4Y2

Where X and Y represent to products, X + Y= 30

Hint:

a. Express one of the variables (X or Y in this case) in terms of the other

and solve the constraint equation for one of them (X or Y).

b. Substitute the solution obtained into the objective function (that is, the

function to be maximized or the profit function) and solve the outcome for the other variable

3. List and Explain the important features of Decision Making in Business.

4. State and Discuss the 5 Theories of Profit.

5. Explain the Marginal conditions of Profit Maximization.

6. List and Describe the 4 types of Demand encountered in Business.

For the 2015 – till date past questions for this course CLICK HERE

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