Assignment for first semester CM

Submission date: 2076-01-20

1. What is economic efficiency? How it is maintained in construction

industry as a regulator of the economy? [8]
2. Analyse the significance of economics for construction managers in
contrast of your professional practices with help of tools and
techniques you have learnt. [7]
3. What is opportunity cost? Explain its relevancy in construction with
an example.
4. A company has the following demand and cost functions:
Demand function: P = 200 – 8Q
Cost function: C = 18 + 8Q + 8Q2
a. If the objective of the firm is to maximize profit, what quantity
should it sell and at what price? What is the total profit it
earns?
b. If the objective of the firm is to maximize Sales revenue, what
quantity should it sell and at what price? What is the amount of
profit and loss the firm has at this price?
c. The management of the firm decides that the firm must earn
$ 400 as the minimum profit to keep the shareholders satisfied.
What quantity should the firm produce despite its objectives to
maximize sales revenue? What price should it charge?
5. List out the various techniques of demand forecasting. Highlight the
purpose of demand forecasting in business decision making.
6. Define Non-collusive oligopoly. Explain the kinked demand curve
model.

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 7. A construction firm has spent Rs. 5 crores developing and testing a
new admixture. The head of marketing department now estimates
that it will cost Rs. 3 crores in advertising to launch this new
product. Total revenue from all future sales is estimated at Rs. 6
crores, and therefore, total costs will exceed revenue by Rs. 2
crores. He recommends that this product be dropped from the
firm’s product offerings. What is your reaction to this
recommendation? The head of the accounting department now
indicates that Rs. 3.5 crores of corporate overhead expenses also
will be assigned to this product if it is marketed. Does this new
information affect your decision? Explain.
8. Complete the following table and answer the given question. [8]

Output TFC TVC TC AFC AVC AC MC

0 200
1 20
2 36
3 48
4 64
5 100
6 160
7 248
8 360
9 520
From the given table explain the relationship between Average Cost
(AC) and Marginal Cost (MC)

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9. A market consists of three consumers A, B and C whose individual
demand equations are as follows:
QdA = 40 – 1.5p
QdB = 50 – 0.75p
QdC = 20 – 1.25p
And the market supply equation is given by QS = 45 + 1.5p
a. Find the market demand function and derive market
demand curve. [3]
b. Determine the equilibrium price and quantity. [2]
c. Determine the quantity demanded by the each individual A,
B and C. [3]
10. Out of profitability index, IRR, NPV and payback period for the
economic appraisal of a project, you have to be reliable on any of
the above economic indicator, which you will consider and why? [9]
11. Answer the questions based on given data of a firm. [15]

Output 0 1 2 3 4 5 6 7 8
Price 10 10 10 10 10 10 10 10 10
Total Revenue 0 10 20 30 40 50 60 70 80
Total Cost 12 14 15 17 20 25 35 50 81

a.How could be said that the firm is competitive?

b.Calculate marginal cost, marginal revenue and profit.
c.Find the profit maximization output from TR-TC approach?
d.Find the profit maximization output from MR-MC approach?
e.What is the relation between MC and Price at 6 units of
output?
12. What are the objectives of fiscal policy in developing countries?
13. What are the objectives of monetary policy?

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 Write Short Notes

Project appraisal process

Cost benefit analysis
Elasticity of Demand
Non-price competition
Variables affecting supply
Features of monopoly market
Principles of Engineering Economics
Business Cycle
Consumer Price Index
E-Business