Download Postgraduate Diploma in Marketing June 2016 Examination

Postgraduate Diploma in Marketing
June 2016 Examination
Economic and Legal Impact (Econ)
Date: 18 June 2016
)
Time: 0930 Hrs – 1230 Hrs
Duration: Three (03) Hrs
Total marks for this paper is 100 marks.
There are three parts in this question paper. All questions in Part One and Part Two are
COMPULSORY.
Part One includes 20 Compulsory multiple choice questions.
Select the most appropriate answer from the given choices and mark it in the given space in
the answer book.
Part Two includes 06 Compulsory short answer questions.
Part Three includes 02 Essay Type Questions. Answer only 01 Question from this part.
Instructions to candidates
1
State your Registration Number on the front cover of the answer book and on each
and every additional paper attached to it. Your name must not appear anywhere
in the answer book or answer scripts
2. Always start answering a question on a new page
3. You are reminded that answers should not be written in pencil or red pen except
in drawing diagrams
4. Answer the questions using:
 Effective arrangement and presentation
 Clarity of expression
 Logical and precise arguments
 Clear diagrams and examples where appropriate
5. Illegible hand writing and language errors will be penalised
PART ONE
Read the question and select the most appropriate answer out of the four
given choices.
Tick your choice in the given space in the answer booklet.
Question 01
Question 01.1
Production Possibility Curve cannot be a straight line because of:
a)
b)
c)
d)
Scarcity of resources
Price differences of resources
High opportunity cost of resources
Diminishing marginal rate of substitution
Question 01.2
Micro economics studies:
a)
b)
c)
d)
Allocation of scarce resources
How to satisfy unlimited needs and wants
Firm level economic behaviour
All of the above
Question 01.3
Economic inputs include:
a.
b.
c.
d.
Material, men, machine and methods
Land, machine, material and money
Land, labour, capital and entrepreneurship
All the above
Page 2 of 10
Question 01.4
The law of supply explains:
a.
b.
c.
d.
Income effect on the supply
Cost of production on supply
Price effect on supply
Technology effect on supply
Question 01.5
A totally inelastic demand curve is:
a.
b.
c.
d.
A horizontal line
Downward sloping line
A curve with a flat bottom
A vertical line
Question 01.6
The law of demand explains:
a) The relationship between supply and demand
b) The reason for price variations
c) The relationship between the price of a commodity and the quantity
demanded of the same while other factors remain constant
d) The reasons for the shift of the demand curve
Question 01.7
An excess demand refers to a situation where:
a.
b.
c.
d.
Demand is larger than the supply
Demand is equal to supply
Demand is lower than the supply
None of the above
Page 3 of 10
Question 01.8
Marginal cost (MC) is calculated by:
a.
b.
c.
d.
Total cost divided by total sales
Average cost divided by total quantity
Incremental cost divided by the total quantity
Incremental cost divided by the incremental quantity
Question 01.9
In economics, increasing returns to scale refers to:
a.
b.
c.
d.
Increasing revenue while cost remains constant
Declining average cost when production is increased
A large profit margin obtained by sales
A continuous increase of revenue while the cost is going up
Question 01.10
Cross elasticity of demand explains:
a. Relationship between consumer income and quantity demanded
b. Responsiveness of quantity demanded of a product to its price variations
c. Responsiveness of quantity demanded to the changes in prices of other
goods
d. All of the above
Question 01.11
The demand curve of a perfect competitive firm is:
a.
b.
c.
d.
A line sloping to the right of the graph
A line parallel to the horizontal axis
A parabolic curve
A line parallel to the vertical axis
Page 4 of 10
Question 01.12
Select the most inaccurate statement about a monopoly.
a.
b.
c.
d.
A monopoly is always innovative
A monopoly is always efficient
A monopoly is always concerned about quality
A monopoly never earns abnormal profits
Question 01.13
Consumer surplus can be defined as:
a.
b.
c.
d.
The total utility enjoyed by the customer when using a product/service
Satisfaction obtained when purchasing a good
Amount of money spent on a product
Satisfaction derived by the customer over and above the price he paid
Question 01.14
A perishable good is:
a.
b.
c.
d.
A product that can be used on behalf of another product
A product that is used together with another product
An inferior good
A good with a short shelf-life
Question 01.15
A perfectly competitive market is characterized by:
a.
b.
c.
d.
Homogenous goods
Free entry and exit
Perfect knowledge of the market
All of the above
Page 5 of 10
Question 01.16
The marginal cost curve of a firm is always:
a.
b.
c.
d.
Declining first and thereafter rises
Rising to the right
Convex to the origin
U-shaped with a flat bottom
Question 01.17
The demand curve of a perfect competitive firm is:
a. Indefinitely elastic
b. Unitary elastic
c. Totally inelastic
d. None of the above
Question 01.18
Marginal Cost (MC) is calculated by:
a.
b.
c.
d.
Total cost divided by total sales
Average cost divided by total quantity
Incremental cost divided by the total quantity
Incremental cost divided by the incremental quantity
Question 01.19
In economics, increasing returns to scale refers to:
a.
b.
c.
d.
Increasing revenue while cost remains constant
Declining average cost when production is increased
A large profit margin obtained by sales
A continuous increase of revenue while the cost is going up
Page 6 of 10
Question 01.20
Return on investment is a measure of:
a.
b.
c.
d.
Returns on capital invested
Business profitability
Equity capital requirement
Investment recovery period
(Total 20 Marks)
Page 7 of 10
PART TWO
This part includes SIX compulsory short answer questions.
Answer all questions.
Question 02
a. What are the basic economic problems that must be addressed in an
economy?
(05 Marks)
b. How does the capitalistic system solve the general economic problems of a
country?
(05 Marks)
(10 Marks)
Question 03
a. What are the factors that determine the demand of fish in Sri Lanka?
(04 Marks)
b. What is the difference between the change of demand and the changes in
the quantity demanded? Graphically explain your answer.
(06 Marks)
(10 Marks)
Question 04
a. Briefly explain what is meant by “Economies of Scale”?
(04 Marks)
b. How does a monopolistic firm reach market equilibrium? Support your
answer with a suitable graph.
(06 Marks)
(10 Marks)
Page 8 of 10
Question 05
a. What is income elasticity of demand?
(03 Marks)
b. How can a marketing manager of a firm use the concept of elasticity to
improve sales?
(07 Marks)
(10 Marks)
Question 06
a. What is an oligopoly?
(02 Marks)
b. Briefly discuss the behaviour of an oligopolistic firm using theoretical models
and citing an example from Sri Lanka.
(08 Marks)
(10 Marks)
Question 07
a. What are the three cost attributes shown by the shape of a long run average
cost curve?
(05 Marks)
b. How does a perfectly competitive firm reach long run equilibrium? Support
your answer with a suitable graph.
(05 Marks)
(10 Marks)
(Total 60 Marks)
Page 9 of 10
PART THREE
This part includes TWO Essay Type Questions
Answer only ONE question from this part
Question 08
a. What are the basic economic decisions that are to be made by different
countries? Briefly describe your answer.
(10 Marks)
b. What are the differences between the centrally planned and the
command economies? Give examples to illustrate your answer.
(10 Marks)
(Total 20 Marks)
Question 09
a. What are the main functions of money? Briefly explain your answer
providing relevant examples.
(10 Marks)
b. How do you define the fixed cost and the variable cost? Describe your
answer and graphically illustrate the behaviour of two cost curves.
(10 Marks)
(Total 20 Marks)
(Total 100 Marks)
-END-
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