APPENDIX. 4 DIM Master Semester: Fall Ee MSc. Construction Management Year: 2021 se: Economics for Construction Managers Full Marks: 100 i Pass Marks: 60 (New Course) : ‘ z Time: 4 hi ‘are required to give their answers in their own is fer . : Rec sisicstunimans words as far as practicable. : Attempt all the questions | a) What are the basic principles of engineering economics? Explain. a 5) Explain the role oftengineers in making ceonomic efficiency. 8 8) A market consists of three consumers; A, B and C whose individual demand equation are as follows: 8 (Qa) : 40 - 1.5P (Qa)p : 50—0.75 P Aa (Qc: 20-1.25 P ‘And the market supply equation is given by Qs= 45 + 1.5P i) Find the market demand function. ii) Determined the equilibrium price and quantity. iii) Determine the quantity demanded by each consumer A, BandC iv) Find the price elasticity of demand at equilibrium point. v 5) Explain the law of variable proportion with suitable illustration. F ') Describe the concept of short-run engineering costs. _ 8 5) What do you mean by monopoly market? In what respect is it different from perfect 4 Competition market? ‘ > 4) A company has the following demand and cost function; ‘Demand function P = 4,000 ~ 20Q \ Cost function TC = 2,000+ 400Q i the objective of the firm is to maximize profit, what quantity should it sell and at ,,. What price? What i fit earned? i . Ee ees ze sales revenue, What quantity should it sell If the objective of the firm is to maxim” iit 4nd at what price? What is the amour If the objective of the firm is to maximize St 1,59,000, What quantity should it sell and sunt of profit or loss the firm has at this price? 2 Jes revenue with profit constraint of Rs. at what price?a s compared with of 2019 b) Compute the cost of living index number of 2020 as comp Using following dat — — 5 Tk ~~] Weight [Base year 2019 |Current year 20%" ep a eee eee) 250 Rent aes 10% | 48 es [Clothing 15% UO TSLy Education 25% a 5 Miscellaneous 20% 40 Ifan employee's salary of Rs. 10,000 per month is raised to Rs. 11,000 is it adequate? Why? 5. 8) Critically evaluate the theories of profit. 5 >) High speed computer (Pvt) Ltd. is considering these two projects A and B, Each Project has a cost of Rs. 20,000 and the MARR is 12 percent. Calculate Payback Period, net present value and internal rate of return (IRR) from the following cash flow data and suggest which project should be accepted if both Projects are mutually exclusive. What will be the decision if they are independent? 10 Year Project A Project B 0 20,000 20,000 1 13,000 7,000 2 6,000 7,000 3 6,000 7,000 4 2,000 7,000 6. a) The total cost function ofa firm is given as; TC =200 + 5Q-0.04@? + 0.0019. ate TFC, TVC, TC, AFC, AVC, AC and MC if the firm producing 10 units of b) Explain about the economies of scale. ; 7. Write short notes on any two: a) Business cycle Cai b) Monetary policy ©) Opportunity cost oon ss!’ IIT Master Semester: S| : : ster: Sprin, fe, MSo. Construction iacement ons oe Year: 2020 es —Bconomies for Construction Managers Pull Marks: 100 (New Course) ’ Pass Marks: 60 Patio: ‘ = 1 7 are required to give their answers in their own words as far tos a Is as far as practicable in the margin indicate full marks. ites fi Attempt all the questions tare the basic principles of enginceri a eariutttie ba engineering economics? Explain. 7 » EP b s economic system with their characteristics. 9) Amarket consists of three consumers; A, B and C whose individual dems : are as follows: idual demand equation 10 A:P=35-0.50 Qa B:P=50—0.25 Qs €:P=40—2.00 Qc ‘The market supply equation is given by Qs= 40+ 3.5P j) Find the market demand function ii) Determined the equilibrium price and quantity ii) Determine the quantity demanded by each consumer, iv) Find the price elasticity of demand at equilibrium price b) What are the significance of ‘demand forecasting? 5 |) The total cost function of a firm is given 4%, 10 TC = 200 + Q— 0.03" + 0.007" : Let the firm is currently producing 100 units of output. Now answer the following questions; i: What is the average fixed cost of the firm at this level of output? fer Whats the average variable cost of the firm at this level of output? ? iii If the market price of the product 6 Rs. 68, does the firm make profit or loss 5 Tiplsinaboutthe economies OSH, ker truce g 8) State and explai ‘or features of oligopoly : ; 4) Find the ee a Pee tee enue, total cost od total profit under the given conditions; Demand function P = 20 - Cost function TC = Q+8Q +2 i, Profit maximization tRs. 10 ii. a, «sot to the profit constraint ; ee ucezevenue maximization pe fit. fees the significance of profit n Meee profit. and busines? profit. Jes revenue, What quantity should it sell 8 construction project: . ' mize sa ) Ifthe objective of the firm ea mf profit and Hoss the and at what price? What is the amoun firm has at this price? Es6. a) Explain the process of project appraisal, b) Calculate payback period and net present val j 5 lue from the following cash flow data and suggest which project should be accepted if both projects are mutually exchysiy,, ‘What will be the decision if they are independent? 10 Project A Project B 50,000 LE 2 7. Write short notes on any two: a) Cardinal utility analysis b) Breakeven analysis 2x5=10TIMI , Master Semest i : fer: Sy evel : M.Sc. Construction Management ma rat it: er c Economics for C - ; oar Onstruction Managers Paws Marka: 60 Ca (New Course) Times idates are required to give their answers in their own word practi ‘he figures in the margin indicate full marks, a Attempt all the questions 1. a) Define engineering economics. What are the basic principles of 7 economics? Explain. b) Explain the concept of Production Possibility Curve for efficient use of resources. What are the causes for shift in Production Possibility Curve? z 2. a) What is demand forecasting? Discuss the different methods of demand forecasting with example. 8 b) Define price elasticity of demand. Compute the point price elasticity of demand for a commodity if the demand function of the commodity is x = 600 ~ Sp. The commodity is initially priced at 90. a 3. a) Fillup the following table. Plot ee finding. 8 Output TFC TV AFC AVC AC MC 0 1 8 10 Z. 12 4 3 10 25 4 27 5 4 6 4 g. s 8 a 9 48 6.44 10 70 pane r The total cost function is C = 2500 + 340x — Sx +™3-. At what quantity the average 2 ‘variable cost and marginal cost are minimum? - How price and output are determined under monopoly by TR-TC approach? 8 cas the economies of scale? How a firm can achieve the economies of scale? 2 the example. ae erfect Bective market? How equilibrium quantity and price are ined in this market? :b) If the demand function of any fitm is, P = 40 0.4Q and cost function is TC = 299 , 8Q. Find the price, quantity, total revenue, total cost and ieotalk profit under the objective of i- Profit maximization ii- Sales revenue maximization. 7 6. a) Explain the meaning and uses of price and price indices. Also calculate the cost og living index number by using following data. _ ol Items Weight Base year (2017) Current year (2018) Food 10 150 225) Household 5 50, 150 2 Clothing Dine 30 o FF Fuel and lighting 3 30 — Miscellaneous 5 30 75 | 5 ——_] b) Explain briefly the discounting methods to analyze an investment. Calculate both types of payback period from the following cash flow data and suggest which project is feasible. 7 Year Project A Project B q 0 +75,000 -75,000 I 24,000 25,000 | 2 24,000 23,000 3 24,000 24,000 q 4 24,000 25,000 5 24,000 29,000 7. Write short notes on any two: 2x5=10) a) Fiscal policy b) Techniques of demand forecasting c) Breakeven analysis d) Returns to scale ongevel program: course: Ih Master Semester: ster: Spring Year: 2018 MSc. Construction Management Full Marks: 100 Economies for Construction Managers Pass Marks: 60 (New Course) Time: 4 hrs candidates are required to give their answers in their own words as far as practicable, ‘the fi a) b) a) b) a) b) a) b) ures in the margin indicate full marks. Attempt all the questions Define economic efficiency. How the knowledge of principles of engineering economics helps indecision making? Discuss. 7 Mention the various techniques of demand forecasting as a construction manager and discuss which one is more relevant. Why? Suppose there are 1000 identical individual consumers and 100 identical producers in the market. Given the individual demand for iron nail (X) is 8 — P, and individual supply of iron nail (X) is 2P, — 4 respectively. a i) Find market demand function and market supply function. ii) Obtain the equilibrium price & quantity of iron nail. Construct the cost of living index number for 2017 on the basis of 2015 of the middle class families in Lamjung district in Nepal having the following information. 8 Expenses on Food Fuel | Construction | Rent | Misc. 35% 10% 20% 15% 20% Price in Rs. (2015) 150 25 15 30 40 Price in Rs. (2017) 145 23 65 30 45 2 Explain with suitable example. 7 ‘The short-run total cost is; TC = 200 + 5Q- 0.04Q? + 0.001Q° and Q = 10. 8 Find; (3) Total fixed cost (TFC) (ii) Total variable cost (TVC) (it) Total cost (TC) (iv) ‘Average variable cost (AVC) (v) Average fixed cost (AFC) (vi) Marginal cost (MC). What do you mean by explicit cost and implicit cost and marginal cost and total cost Define economics of scale. What are the causes for economies of scale? 7 Find the price quantity, total revenue, total cost and total profit under given conditions: a Demand Function; P = 20 Q Total Cost Function; TC = V+8Q+2 i) Profit Maximization n subject to the profit constant Rs. 10 ii) Sales-Revenue maximizatiol Gm ReHheance of profi,Pa DTI evel: ener Semester: Fall Year: 2018 ee elon Management Full Marks: 100 course: Economics for Construction Managers Pass Marks: 60 (New Course) ee candidates are required to give their answers in their own words as far as practicable. ‘he figures in the margin indicate full marks. Attempt all the questions 1, a) Define engineering economics. Discuss the important features of engineering economics. 8 b) What is meant by economic system? Briefly explain the merits of Market (capitalist) economy. wi 7 2 a) Suppose market demand and supply equations for a product is given as; Qa= 10000(12-2P) and Q, = 1000 (12P) i) Determine the equilibrium price and quantity. ii) Suppose the demand equation changes to Qd = 15000(12-2P); What will be the new equilibrium price and quantity? Explain the result. b) Explain following costs; explicit cost & implicit cost and marginal & sunk cost with suitable example. 8 3. a) Define demand forecasting. Briefly explain the various steps of demand forecasting. 7 wn? Explain the law of variable proportion with the b) What is meant by production functio 8 help of a hypothetical table and diagram. 4. a) Suppose a total cost function is C = 2x? 3X" + 9X. At what quantities the average cost and marginal cost are minimum? 7 b) Define economic and business profit. Briefly explain role of profit in business decision. 8 BRS fiiwiat ieimonopoly market? How equilibrium quantity and price|are\deteemined snithe monopoly market? 8 b) The demand and total cost functions for the output of a monopolist are 7 Demand function, X = 50 — 0.5P Cost function, C = 50 + 40X a eee eee6. Estimate the firm's profit maximizing output level'end the price per unit of output, Wy, the profit at this output level? ‘ 6 2) Whatis business cycle? Explain the various phases of business cycle. 1 b) Briefly describe the methods and importance of estimating the Payback Period (Ppp), Net Present Value (NPV), Benefit Cost Ration (BCR), and Internal Rate of Retun, IRR). 8 7. Write short notes on any two; 2xs a) Cost of living index b) Returns to scale ©) Monetary and Fiscal policyLevel: program: Course: TIT Master Semester: Spring Year: 2016 M.Sc. Construction Management Full Marks: 100 Economies for Construction Managers Pass Marks: 60 (New Course) Time: 4 hrs Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks. 1 a) ») 2) b) 3. a) b) b) b) Attempt all the questions Discuss about the importance of engineering economies in decision making. 8 What is production possibility curve? What do you mean by economic efficiency? 7 What is the use of demand forecasting? What are the major considerations for commercial building demand forecast? 7 Show the relationship between the Average Cost (AC) and Marginal Cost (MC) with the help of a hypothetical schedule and graph. 8 Given the total cost function for infinity RMP Enterprises. 7) TC = 1000Q -397+0.1Q° i) Determine the average cost function and the rare of output that will minimize average cost. ii) Determine marginal cost function and the rate of output that will minimize marginal cost. iii) At what rate of output does AC equals MC? Explain the price and output determination under Monopolistic competition market. 8 Find the equilibrium price, quantity, total revenue, total cost and total profit under the given condition. 8 i) Profit Maximization ii) Revenue Maximization iii) Profit Constraint where P = 12 — 0.4 Q & C= 0.6 Q’ + 4Q +5 and Constraint at 10. Define project. Critically evaluate the theories of profit. ” What is index number? Describe the steps and problems of construction of price index. 7 What is the managerial application of Break Even Analysis? A pin manufacturing determines that the production cost associated with each pin Rs. 5 and the fixed cost is Rs. 7,000. Assuming each pin can be sold at Rs 7, Find the Break Even point. 8= RR) Methods dictory results? yp.ae Pull Marks: 100 evel: program: Construction Management Pass Marks: 60 gybjeet: Beonomics for Construction Managers Time: 4 hrs Attempt any seven questions: Lo a we mean by economic efficiency? Explain it by using production possibility b. Compare different economic system with their features. >, a Define demand and law of demand? What are the factors affecting demand? . Suppose market demand and supply equations are; Qy= 40000 — 20P and Q, = 20000+30P i) Determine equilibrium price and quantity. ii) Suppose change in demand equation Qs = 50000 — 20P, What will be the new equilibrium price and quantity? 3, a. Why demand forecast is needed? What are the techniques for demand forecasting? b. Forecast likely sales for 2001 with following data. Year 1995 | 1996 | 1997 | 1998 1999 2000 Sales (Million) 20 30 25 20 40 35 4. a. Define explicit & implicit cost, historical & replacement cost, private & social cost, separable & common cost with suitable example. b. What do you know about economies of scale? Explain the causes for economies of scale. Se ics is a science, an art and both’, Justify this| states b. Distinguish between cardinal and ordinal utility approach. How does equilibrium exist through demand and supply approach? 6 a. What do you mean by direct and indirect, ‘opportunity, sunk, total, fixed and variable cost? b. Explain the concept of returns to scale. 1. a, What is price index? What are the importance of it? Enlist steps to construct price indices. b. Whatare the important aspects (process) for project appraisal? es eeHow do you make decision from NPV, payback period, B/C ratio and IRR? Explain briefly monetary and fiscal policy. What are the uses of cost analysis? Enlist difficulties in determination of cost function, 3 a b. The short-run total cost is; TC = 200 + 5Q = 0.04Q? + 0.001Q" and Q = 10. Find; (i)Total fixed cost (TFC) (ii) Total variable cost (TVC) (iti) Total cost (TC) (iy) Average variable cost (AVC) (v) Average fixed cost (AFC) (vi) Marginal cost (Mc), ve S . a. Explain features of perfect competition, monopoly and monopolistic competition market? b. I P= 12-04QC= 069 +4Q+5 Find equilibrium price, quantity, total revenue, total cost and total profit under the Profit maximization condition. - Write short notes on any two. a) Relation between AC and MC curves b) Importance of demand forecasting ©) Business cycle ooast eas Full Marks: 100 program: Construction Management Pass Marks: 60 subject: Economics for Construction Managers Time: 4 hrs Antempt any Seven questions: 1. a Explain origin and principles of engineering economics. b. Differentiate between capitalistic and socialistic economic system. 2, a Whatdo you mean by elasticity of demand? What are the factors affecting supply? b. Suppose market demand and supply equations are; Qs = 10000 (12 — 2P) and Q, = 1000 (20P) i) Determine equilibrium price and quantity. ii) Suppose change in demand equation Qy = 15000 (12 ~ 2P) What will be the new equilibrium price and quantity? 3, a. What are the steps in demand forecasting? Explain the techniques for demand forecasting? b. You are given the following data; EK 3 6 8 10 13 13 ieee eat Y 8 6 10 12 12 14 14 | 20 Estimate the regression equation for Y =a +b X 4. a. Define cost, explicit and implicit cost, direct and indirect cost, fixed and variable cost with suitable example. b. What do you know about short-run and long-run? Explain the applications of cost analysis What do you mean by economic efficiency? Explain the concept of production possibility curve. b. What is cardinal and ordinal utility approach? Show economic equilibrium through demand and supply approach? What do you mean by revenue? Derive TR, AR and MR curves under competition and p 2 S monopoly markets. pt of economies of scale. b. Explain the coneges ‘ah a) es? Calculate average (compound) inf, lation ver the past 3 years. 7 What is price index? What are its featur rate when CPI has risen from 176 to 216 01 Why project appraisal is needed? What are the process for it? Explain the concept of break-even analysis. How do you make investment decision under NPV and IRR? Define business cycle. What are its important phases? If the total cost function; C = Q/3 - 8.5 Q + 60Q + 27. Find at what level of outpy cost is minimum? Also find the minimum cost amount. Explain uncertainty bearing theory of profit. A firm has following cost and demand function; C=55Q—8Q’ and P= (10—Q) Find profit maximizing level of output and total profit at this level of output, . Write short notes on any two. Application of cost analysis b) E-business 2) Profit policy oooevel: program: subject: La b. 2a b. i b. * a. b. Sea b. TEEN Master ’ Full Marks: 100 Construction Management Pass Marks: 60 Beonomies for Construction Managers ‘Time: 4 hrs Attempt all questions What do you mean by economic efficiency? Explain the concept of efficiency using roduction possibility curve 7 Define economic system. Compare different economic system with their features. & What is demand and law of demand? What are the factors affecting demand? 7 Suppose the market demand and supply equations for plywood are given as; a Qu= 40000 - 20P Q,=20000+30P i) Determine the equilibrium price and quantity. ii) Suppose an increase in housing results in a new demand equation Qs = 50000 — 20P; What will be the new equilibrium price and quantity? Why demand forecast is needed? What are Techniques for demand forecasting? 7 ‘A company is interested to know the likely sales for next year with following sales data. Year 1995 | 1996 | 1997 | 1998 1999 2000 Sales (Million) 20 30, 25 20 40 35 Forecast the sales for 2001 Define explicit cost & implicit cost, historical & replacement cost, private & social cost, separable & common cost with example. ; What do you know about economies of scale? Explain the causes for economies of scale. 8 What are the applications of cost analysis? Enlist difficulties in determination of cost function. 3 TC = 200 + 5Q — 0.04 + 0.001Q' and Q = 10. 8 The short-run total cost is; Find; (iyTotal fixed cost (TFC) (i) Total variable cost (TVC) (ii) Total cost (TC) (iv) Average variable cost (AVC) (v) Average fixed cost (AFC) (vi) Marginal cost (Mc). ee |a. What are the main features’ of competition, monopoly and monopolistic competi, market structure? Explain. 3 7 b. Find equilibrium price, quantity, total revenue, total cost and total profit under the given condition. 8 i) Profit maximization objective ii) Revenue/ sales maximization objective iii) Profit constraint objective where, P = 12 - 0.4Q C = 0,.6Q? + 4 Q + 5 and profit constraint at 10 Write short note on any two. 2x5=10 a) Relation between AC and MC curves b) Importance of demand forecasting c) Elasticity of demand enprose set: ae b. 2& b. 3a b. 4a. b. Soa b. TEMA Master : Full Marks: 100 Construction Management Pass Marks: 60 Economics for Construction Managers Time: 4 hrs Attempt all questions Analyse the significance of economics for construction managers in contrast of your professional practices with help of tools and techniques you have learnt. 7 Refer the various concept of supply as a construction manager and discuss which one is more relevant for market analysis and why? (8) what are the major determinants of new construction and what is their expected effect? 71 What is opportunity cost? Explain its relevancy in construction with an example. Describe the relation of revenue and cost with help of graph. i) Find the price, quantity, total revenue, total cost and total profit under given condition. [8] i) Profit Maximization ii) Revenue Maximization iii) Profit Constraint at Rs 22. Where P = 25-0.5Q&C =15Q? + 5Q+10 onstruction project in Nepal should be determined at Do you agree that price for c .? Explain with suitable reason and graph. [7] market period of perfect competition’ studies have suggested that the marginal cost function is Some empirical ut conventional cost curve is U shaped provide an approximately horizontal b explanation for this apparent inconsistency. [8] ‘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 Jndicates 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] Describe the similarities and differences of major theories of profit. ee eee6. a. What are merits and demerits of NPV and IRR? For mutually exclusive projec, proposals, what should be selected of- NPV or IRR? Why? [8] b. Compute consumer price index by using both the methods and analyse the result, _[7) Base Year " Current Year Commodities Price “Quantity z 3 Quantity 4 3 “ 5 4 0 4 3 2 71 2; 9 S 2 3 1 5 D 7. Write short notes on any two: (2 *S= 10] a. Kinked demand curve b. Economic feasibility c. E-Business qQooMaster evel : Full Mark: 100 " ~ hha Management Pass Mark: 60 course: Economics for Construction Managers ‘Time: 4Hrs Candidates are required to give their answers in thelr own words as far as practicable. The sjguresin the margin indicate full marks Attempt all Questions, 1, a) What is economic efficiency? How it is maintained in construction industry as a regulator of the economy? 8 b) what are the difficulties of a theoretical approaches of demand for social type constructions? Describe in brief. ie: 2, a) what is the use of demand forecasting? What are the major considerations for commercial building demand forecast? Bs b) Describe the change in short run unit costs below and above output at or near optimum level of output of a construction firm. 8 3. a) Given the total cost function for infinity RMC Enterprises. 7 Tc = 100Q — 3Q? + 0.19? (i) Determine the average cost function & the rate of output that will minimize average cost. (i) Determine marginal cost function and the rate of output that will minimize average cost (iii) At what rate of output does AC equals MC? b) What do you mean by cost function? What are their managerial applications? Determine cost function for maintenance of a house based on given information. Cost in Nepali currency Area in Sq.Ft 2900 200 3100 400 4. a) Find the equilibrium price, quantity, total revenue, total cost and total profit under given condition. B () Profit Maximization ii) Revenue Maximization (iii) Profit Constraint Where P = 12-0.4Q&C = 0.6Q? + 4Q +5 & Constraint at 10. .es of goods over their costs.” Discuss. 7 b) “Profit is the excess of the pric 5. a) What is index number? Describe the steps and problems of construction of price index. P? A pin manufacturing Rs9 and the fixed ogg te Even point.ters ester: a Mast Pci emester: Spring Full Marks; 100 ja Construction Management Pass Marks: 60 F i 188 Marks: 6 Economics for Construction Managers ‘Time: 4 hrs gi ates are required to give their answers in their own words as far as practicable. 6 fw. a) * Write short note on any two. 4) Business cycle >) Consumer price index ©) Origin of Engineering Economics. ong fees indicate full marks, Attempt all the questions. Define economic system & explain its type. Which economic framework is present in :) Nepal? Explain. fi] ) Describe the concept of PPC for efficient use of resources with an example of puildings & infrastructure. (8) How important the elasticity of supply or demand is to forecast the demand or supply. [6] ) what are the typical costs of construction industry? Demonstrate with example and classification based on sunk and variable. 19] . Explain the relation of average cost and marginal cost in construction industry. [7] ) Pokhara Brick Industry has demand function P =20-Q & total cost function C=Or 8Q + 2, Determine Optimal output, Price, total profit & total revenue under profit maximization, revenue maximization & sales maximization subject to profit constraint Rs. 8. OR, Let the cost function of a firm is given by C(x) = 300x — 10x*+ ax” Find out 1. Output at which marginal cost is minium 2. Output at which average cost is minium 3. Output at which average cost is ‘equal to marginal cost 15] Show the factors affecting demand & its impact on equilibrium under following conditions (A) demand for industrial & commercial building (B) infrastructure & public sector construction (C) repair & maintenance iy b) What are the uses of price indices. [4] 2) State & explain the market structure that typify the construction industry of Nepal in 19] your view. : How the theories of profit are applicable in our construction industry? [6] 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 a) you will consider and why? ‘ 19] ¥) What shold be the required sales volume to get.a net income Rell, 500 after 30percent tax where fixed cost is 16,000? (él 2x5=10AE Level: Master Full Mark: 109 Program: M.Sc. Construction Management Lig Mark: 60, Subject: Economics for Construction Managers (BCO501) Time: 4hrs Attempt all questions. 1. a) What is construction economics? How engineering econom: linked with economic efficiency? b) Explain the different ways to address the demand of housing. (6 2. a) How demand of construction could be forecasted? Explain with the suitable example of infrastructure construction? (5+3=8] b) Describe the relation between MC, ATC, AVC & AFC along with graph. fal 3. a) ABC Company has following demand & cost functions: p = 2000—10Q , TC = 1000 + 200Q Calculate total profit and total revenue under profit maximization and maximization of y and design process are (247-9) sales. [3] b) How economics & diseconomies of scale affect the shape of average cost curve? [7] Or, ‘Answer the questions based on given data of a firm. (15) Output Ol, Deo aes tor as Price 10 10 10 10 10 10 10 10 10 Total revenue 10 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? ©) What is the relation between MC and Price at 6 units of output? 4, a) How do you typify the market structure of Nepalese construction industry? () b) Describe the steps and problems in construction of price indices. (6) 5. a) The pricing policy of a company follows the demand equation p = D(x), D(x) being the price per unit when the x. If units are demanded. After studying the market trends the company determines the price function, D(x) = 1000 — 2x. if the FC IS Rs 30,000 and VC Rs 300. At what sales level can the company expect to recover ifs costs? (6) b) suppose that the market supply and demand equations for plywood are given by Qs= 20000 + 30p , @d = 40000 — 20p a eeea) Graph the supply and demand equations and show the equilibrium price and quantity. b) Determine the equilibrium price c) Suppose an inc and quantity algebraically. e in the housing starts results in a new demand equation. Qd = 50000 — 20p What is the new equilibrium price and quantity? (91 a) which evaluation technique, NPV or IRR, is better to use when selecting the best project among a number of mutually exclusive projects, and why? {10} b) What is the different between fiscal and monitory policy? 6) Write short note on any two. 2x5=10 a) Cost benefit analysis b) Risk theory of profit ©) Social cost ooo" Full mark: 199 Level: Master Program: M.Sc. Construction Management Subject: Economies for Construction Managers Attempt all questions > 1. a) Define economic system & explain its type: Pass mark: 69 Time: 4 hours Which economic framework is present jn Nepal? Explain. Mth an m7 b) Describe the concept.of PPC for efficient use of resources with an example of buildings & infrastructure. [8] v a) How important the elasticity of supply or demand is to forecast the demand or supply (6] b) What are the typical costs of construction industry? Demostrate with example ang classification based on sunk and variable. (9) 3. a) Explain the relation of average cost and marginal cost in construction industry 7 b) Pokhara Brick Industry has demand function of brick p = 20—Q & total cost functione = Q + 8Q + 2, Determine Optimal output, Price, total profit & total revenue under profit maximization,revenue maximization & sales maximizationsubject to profit constrant Rs 8. (8) Or, Let the cost function of a firm is given by C(x) = 300x — 10x*+ tx Find out 1. Output at which marginal cost is minium 2. Output at which average cost is minium 3. Output at which average cost is equal to marginal cost (5) 4. a) Show the factors affecting demand & its impact on equilibrium under following conditions (A) demand for industrial & commercial building (B) infrastructure & public sector construction(C) repair & maintenance. (uy b) what are the uses of price indices. [4] 5. a) State & explain the market structure that typify the construction industry of Nepal in your view. 9] b) How the theories of profit are applicable in our construction industry? (6] 6. a) 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) b) What should be the required sales volume to get a net income RsI1, 500 after 30percent tax where fixed cost is 16,000? (4) 7. Write short note on any two. a) Business cycle b) Consumer price index c) Origin of Engineering Economies. 2x5=10 ong aS| il subject: Program: Level: semester: ») a) b) b) 4a) b) Economics for Construction Managers Full Mark: 100 MSc. Construction Management Pass Mark: 60 Sha ‘Time: 4hrs 1 Attempt alll questions. What is economic efficiency? What are its types? How it is insured in our construction industry? a How economics helps in decision making? Justify the scope of economics with a suitable example. 13] Would elasticity be constant for the demand curve represented by the equation Q = 4000 — 0.4p? 7) Describe the factors affecting demand of housing under given conditions. [8] a) Owner occupied b) Social housing c) Privately rented housing d) Industrial & commercial building The client frequently initiates the project and the contractor has to determine the price before the work is completed in construction industry. If you are the contractor, what are the top three factors that a contractor should consider at the time of bidding? [7] What are causes of economies and diseconomies of cost curve in construction? _ [8] Or RMC Company is analyzing the demand for its new plastic. Preliminary results indicate that the average daily demand in thousands units, Q is a function of price, p, as given by the equation Q = 600 — 3p a) Assume that the company plans to sell 300 units a day. What price must it charge? b) How many units can the company sell at price Rs 50? c) At what price will the sales drop to zero? 4) What would be the demand for free supply? ®) Derive the TR & MR function from the demand function & there by determine point price elasticity at p=Rs 100. How would you determine the price under oligopoly? a Describe Consumer Price Index along with its formulation and problems us formulations.programme: MSc. Construc course: Beonomies for tion Management (First Semester) Full Marks: 100 ‘onstruction Managers Time: 4 Hours Pass Marks:60 Candidates are required to give their answers in their own words as far as practicable ‘fhe figures in the margin indicate full marks, lL 7. Beh on " Attempt ALL Questions a) ine economic system & explain its type. Which economic framework is present in Nepal? Explain. (3) b) Explain price elasticity of demand with its affecting factor & deferent values. 7 a) Why is demand forecasting necessary for business firm? How would you forecast the demand for construction industry in Nepal? Explain step by step. 7; b) Show how the long run average cost curve is derived with the help of short run average cost curve. (8) a) Distinguish between prim and overhead cost. How the concept of indirect cost is essential for economic analy: 7 b) Distinguish between economic cost & accounting cost. Describe the concept of fixed cost. (3) OR, a) Describe the concept of decreasing returns to scale with its causes. b) Explain the concept of production & revenue. a) what are the characteristics of an oligopoly market? How price & quantity determined under such a market. b) What is an equilibrium price? Show how it is determined in a free market economy. [7] a) Explain un-weighted & weighted index number along with its construction & limitations. m7 b) Discuss the strength & weakness of different theories of profit. [3] 2) Eden Nepal Ltd Company furnishes you the following data relating to the current year, [8 First half of the year ‘Second half of the year Rs 35,000 Rs 40,00 Total Costs Rs 30,000 33,000 Assuming that there is no change in prices variable costs & that the fixed expenses aescanenred equally in the two half year periods, calculate forthe year: (1) the profit 4 expenses, (3) Break-even sales, (4) Percentage margin of Sales volume ratio, (2) fixe Safety. b) What s! 30percent tax? 7] Write short note on any two. eee a) Business cycle b) Features of monopoly market ©) Principles of Engineering Economics. should be the required sales volume to get a net income Rs12, 500 after ooo me ee