TOPIC : ECONOMICS/MANAGERIAL ECONOMICS

CLEAR FORMATTING

Q2. a) Distinguish between law of returns to scale and the law of returns. (2 marks) b) The law of variable proportions holds good under certain circumstances. Examine four of these circumstances giving relevant examples where necessary (8 marks) c) Using suitable diagrams/graphs, discuss the three stages of the law variable proportions. (10 marks) Q3. a) "Managerial Economist's responsibility is to know about the nature and type of expenditure which can better be analyzed by understanding the cost function and various cost concepts". In view of this statement, explain how the Managerial Economist is able to determine cost in the firm. (10 marks) b) Explain the relationship between Marginal Cost and Average Costs of a firm. (5 marks) CS CamScanner c) What do you understand by "Optimum Size of the Firm" and how significant is this concept to the management