Tuesday, November 27, 2018

You're Wasting Time Writing Your Cover Letter If You Don't Do This!



Do you feel like you’re wasting your time writing your cover letter? You’re probably doing it wrong.

You’re not alone in your struggle, though. A while back, I had a client who was really struggling writing her cover letter for a company. No matter what she tried, she just couldn’t get something out on paper (sound familiar?). The funny thing is, both of us are writers, so you’d think it would be an easy thing to create. However, it was like pulling teeth trying to get this thing written. She was racking her brain for what to write, but she was completely uninspired.

After about a half hour of back and forth, I had an idea. I think I figured out what was wrong.

“Okay, let’s forget about this company for a second,” I told her. “If you could work for ANY company, whether it was hiring or not, which one would it be?”

Literally three seconds later, she lit up and started raving about this one publishing company that she absolutely adored. She told me what it did, why it was a great fit for her, and why she would excel there.

“You realize you just told me what your cover letter is going to say, right?” I said to her.

After that, she was able to bust out a rockin’ cover letter. But the problem she had with her first cover letter was clear: she was trying to write about a company she didn’t love.

If you don’t apply to companies you get excited about, you’re wasting your time on your cover letter.

If you’re struggling to write a cover letter, chances are, you’re writing it for the wrong company. In order to confidently prove that you’d be a good fit for a company, you need to believe it yourself. You need to stand behind it. Companies are focusing on “fit” more than ever. They don’t just want butts in chairs, they want butts who are passionate about the company in chairs. So, if you’re not excited about the company and what it does, it will show (and it will be hard to write a great cover letter that stands out).

Just because a company isn’t hiring now, doesn’t mean it won’t later.

“But the company I want to work for isn’t hiring right now,” you might say.

The reason my client didn’t even think to apply for a job at this company is because it wasn’t hiring at that moment. However, just because the company you want to work for isn’t hiring right now doesn’t mean there won’t be opportunities there later.

If you really want to work there, you need to get your foot in the door somehow. You can use your cover letter as a conversation starter when you’re trying to network your way into a company. It’s a great way to convey your passion for the company without trying to suck up to it.

Discovering what companies you get excited about can lead you to similar companies.

Moreover, it’s important to understand what qualities you look for in companies so you can find similar ones that ARE hiring. This is where your Interview Bucket List comes into play. For example, if you really want to work for Google, think about all of the qualities Google has that you respect, admire, or appreciate. Why Google? Once you clearly understand why you want to work there and what the major draws are for you, you can start researching companies that share similar traits. So, if Google isn’t hiring right now, you can find a similar company that IS hiring.

So, if you find yourself with writer’s block when it comes to cover letters, you might want to reconsider the company to which you’re applying. Ask yourself, “Why THIS company?” If you can’t get excited about it, it will be harder to write about it (and sell yourself in the process).

Dear Reader, visit the below website for your dream job:
www.mylelojobs.com

SHINE YOUR EYE - VOLUME 5

FINAL YEAR STUDENTS, YOU CAN VISIT:https://www.mylelojobs.com

You're Wasting Time Writing Your Cover Letter If You Don't Do This! 

Visit:

https://britstutors.blogspot.com/2018/11/youre-wasting-time-writing-your-cover.html

                                     Patriot Odunaro B. J.
                                      08038454008

SHINE YOUR EYE - VOLUME 4

TYPE "YES" IF YOU AGREE OR COMMENT!

SHINE YOUR EYE- VOLUME 3

As a student you need to know that learning is garmane to your academic development.
There is a concept known as Learning Curve Theory, it will be of important if you follow the theory judiciously.
No one is perfect, they make an attempt to be but it took them many days to realize the secret of learning process. After a lot of mistakes, they are able to adjust to the process. No wonder why pencils have erasers.
No short cut to learning, so learn!
Attend classes
Pay attention to details
Ask question
Write your notes
Do your assignment in time if any
Prepare for quiz or test at anytime
Forget the past mistakes in your academic pursuit and plan ahead
Future belongs to those who prepare for it.

Patriot Odunaro B.J
08038454008

 

SHINE YOUR EYE - VOLUME 2


SHINE YOUR EYE-VOLUME 1


HBF 417/BAM 412-REVIEW QUESTIONS ON MANAGERIAL ECONOMICS 1

1.  Managerial Economics uses economic concept and decision science
     techniques to solve managerial problems. Discuss

2.  What do you understand by Managerial Economics and enumerate the
      functions of Managerial Economics.

3.  What is the value of a firm, and briefly state the constraints and
      limitations of the theory of firm.

4.      Write short notes on the following:
         i.   Economic Concepts          ii.    Decision Science Techniques  
        iii.  Managerial Problems        iv.   Optimal Solution

5.    Managerial Economics is sacrosanct to the development of your discipline.
      Discuss.

6.   Managerial Economics is the discipline which deals with the application of
      economic theory of business management. Discuss.

7.   Give reasons for the emergence of managerial economics as a separate study
      of management study.

8.   a.   Distinguish between goal and objective of a firm.
      b.  Outline strategies a firm could adopt to attain growth.
     c.   SWOT Strategy is a reference point for sound strategy in planning.
           Discuss

9.   a.   Define Managerial Economics.
                b.   State factors responsible for the emergence of Managerial Economics as
                      a separate course of management studies.

10.     Examine at least three ways the knowledge of Managerial Economics has
         been useful in business decision.

11.  Managerial Economics is the integration of economic theory with
        business practices for the purpose of facilitating decision making and
        forward planning by management. Discuss

12.  a. What is forecasting?
          b.   Explain the Baumol Theory of sales revenue maximisation.
          c.  In what way is this theory superior to the conventional theory based on the profit maximisation hypothesis.

13.     a.  Justify your contribution as a manager in relation to the controversy over profit maximisation objectives (Theory vs Practice).
          b.  Outline some important objectives set by management of business other than profit maximisation. At least five.

14.     a. Explain how Managerial Economics bridges the gap between economic theory and economics in practice.
          b.  Differentiate between profit maximisation objective and shareholders` wealth maximization objective of a firm.

15.     Ajimatanrareje Nigeria Limited provides the following information.
          The total revenue for the first three years is N100,000 while the total cost for the the first three years is N80,000.
          Due to economic issues, both the total revenue and cost for the fourth year and fifth year change as shown below:
Year
Total Revenue
N
Total cost
N
4
170,000
165,000
5
200,000
175,000
The interest rate for each of the year is given as follow:
Year
Interest Rates
1-3
10%
4
12%
5
15%
Required: Calculate the value of Ajimatanrareje Nigeria Limited.

16.       What is the value of firm when in its first five years of its operation, it recorded a total cost of N75,000 and total revenue of N85,000 at 15% interest rate for the first year and for year 2 to year 5, it recorded the following:    

Year 2
N`000
Year 3
N`000
Year 4
N`000
Year 5
N`000
TR
70
80
90
100
TC
40
30
70
60
Interest Rate
14%
13%
12%
10%

17.     What is the value of firm when in its first three years of its operation, it recorded a total cost of N75,000 and total revenue of N85,000 at 15% interest rate for the first year and for year 2 to year 5, it recorded the following:

Year 2
N`000
Year 3
N`000
TR
70
80
TC
40
30
Interest Rate
12%
10%

18.      The demand and supply functions of Otisese Nigeria Limited are given
          as:
          Quantity Demand (Qd) = 20-3P
          Quantity Supply (Qs) = 6P -16
           Where P= Price in naira
a.       Compute the equilibrium price and quantity respectively.
b.       If price falls to N2 , determine the excess demand.
c.       If price rises to N6, what is the excess supply?

19.       If the demand and supply function of Ajiboluwasoro Product are:
          QD  =  4,000 + 100P
          QS   =  6,000 + 20P
          Where P = Price of the product    QD = Demand Function    
           QS= Supply Function
           Required:
           a.     Compute the equilibrium price and quantity respectively.
           b.    If price falls to N20,what is the excess supply?
           c.    If price rises to N30, determine the excess demand.

20.        If the demand and supply function of Sogbae Product are:
          QD  =  4,000 - 100P
          QS   =  6,000 - 20P
          Where P = Price of the product    QD = Demand Function    
           QS= Supply Function
           Required:
           a.     Compute the equilibrium price and quantity respectively.
           b.    If price rises to N25,what is the excess supply?
           c.    If price rises to N15, determine the excess supply.

21.     With the aid of diagram, explain the following cost concepts:
          i. Fixed Cost                  ii.  Average cost   iii. Total cost
          iv.  Average cost  v. Marginal cost

22.       Distinction between Economist`s view and Accountant`s view of cost.

23.        The following table relates the application of fertilizer to fixed hectare of land in the production of yam. Use the table to answer the question that follow:
Tonnes of fertilizer applied
Hectare of land
Total product (Tubers)
Marginal Physical Product (MPP)
0
1
10,000
-
1
1
11,000
100
2
1
12,500
1,500
3
1
15,000
2,500
4
1
-
4,000
5
1
-
2,500
6
1
-
1,200
7
1
23,500
-
8
1
23,800
-
9
1
23,300
-
(a)  What is the total product of yam when no fertilizer is applied to the land?
(b) Calculate the total output after the application of the following quantities of fertilizer:
i.                   4 tonnes                ii. 5 tonnes            iii. 6 tonnes
(c)  Calculate the marginal physical product after the application of the following quantities of fertilizer:
i.                   7 tonnes               ii. 8 tonnes           iii. 9 tonnes
(d) After what level of application of fertilizer does diminishing marginal returns set in?

24.      Define the law of diminishing marginal utility and state three relationship
          between total utility and marginal utility.

25.     Write short note on the following:
          i. Consumer  Surplus                   ii. Utility Maximization     
iii. Indifference Map.                   iv. Market Demand Schedule             
v. Demand Curve

26.      In the production of plastic, the average variable cost is N1.75 and the
          total fixed cost  is N50,000 while the price per unity of the product is N2.
           Determine the break-even quantity.

27.      Ajimatanrareje & Co. has information about the demand that would be
 generated by certain selling price as follow:
Selling Price
(N)
22
18
14
12
10
8
4
0
Demand
(`000)
0
4
8
10
12
14
18
22
The cost of producing each unit is N6 and the company incurred annual fixed cost of  N30,000.
            Using the tabular approach to calculate the:
i.        Optimal Selling Price
ii.       Optimal Output
iii.       Optimal Profit

28.     a. What is production Function?
          b. Outline factors of production and their economic reward.
          c.  Using the table below:
Output
0
1
2
3
4
5
6
7
Total Cost
150
250
280
310
330
350
390
490
Required: Calculate:
          i. Marginal Cost   ii. Average Total Cost    iii. Average Fixed Cost
          iv. Total Fixed Cost       v. Total Variable Cost

29.   Assume a price function as P= 90- Q and a cost function as C= 10 + 0.5Q2.
    Required:
 a. Profit maximizing output and price
 b. Maximizing Profit.

30. Assume a market consist of three people whose demand for a product is as follows:
i.        Q= 1,250 – 2.5P
ii.       Q= 1,150 – 1.5P
iii.      Q= 1,200 – 2P
if the industry supply is 1,400units.
Required:
a. Find the market demand and price that each should be sold.
b. What is the share of each buyer.
         
31.  a. Define demand and carefully relates it to explain utility, total utility and
Marginal utility with the aid of graphical illustration.
b. Suppose price and cost function of a business firm is given as:
P= 400 – 2Q
T= 40 + 5Q2
Find:
i. Profit maximizing output and price
ii. Total revenue and average revenue function and profit made.

32.  a. Suppose the demand for a commodity is given as:
Qd =  200 -4.5P
Find the price elasticity of demand when price is N10
b. Given that a price of N612.50, 70units of commodity x was demanded but a rise in the price of commodity of N682.50 led to increase in quantity demanded to 78units.  Calculate the price elasticity of demand for the commodity x and interpret the nature of commodity.

33. No alternative hypothesis explain and predict the behaviour of firm better than profit maximisation. Justify this statement or otherwise.

34. Given a firm total cost function C= 4Q2 -8Q +450 and the product P= 30-Q.
You are required to show the output which profit is maximised by the firm.

35.  a. State the law of demand
 b.  With the aid of graph or diagram, differentiate between change in demand and increase in demand.
c. Discuss five factors affecting quantity demanded of a product.
d. Explain five types of demand.

36.  a. Briefly, explain ways the application of economic theories facilitates business decision making.
b. Suppose the demand for a commodity x is statistically estimated as:
Qx = 68- 1.6Px + 0.6Py + 0.08E
Where Px = N20, Py = N40 and E = N1,000
Required:
i. Calculate price elasticity of demand for commodity x.
ii. The cross elasticity of demand for commodity x to change in commodity y.
iii. The income elasticity of demand.

37. a. State the pre-requisites of a perfect competitive firm.
b. Suppose a producer of beverage has the following cost and sales expenditures.
Fixed cost = N500,000, Variable cost per unit= N30, expected unit sales is 50,000 if the manufacturer decides to add a 30% mark-up on sales. Calculate the mark-up price.

38. a. Define and list types of production isoquants.
b. Differentiate between the following:
i. Explicit cost and implicit cost
ii. Sunk cost and incremental cost
c. Given the short run cost function of an investoral.
C= 0.1Q3 – 2 Q2 + 15Q + 10
Required: Calculate:
i. Average variable cost
ii. Marginal cost

39. Given the Cobb Douglas Production Function
Q= 4K0.5L0.5, where K= 64, P = N10 and W= N8 per hour.
Required:
a. Determine the profit maximizing level of employment.
b. How many workers will be employed if wages increase to N10 per hour?

40. a. Discuss the pre-requisite of the existence of a perfectly competitive firm.
b. Outline differences between perfect competitive firm and monopolistic competitive firm.
c. List operational problems of a business firm.
d. Explain condition necessary and sufficient for business profit to be maximized.

41. A project requires an initial investment outlay of N10,000 and its generate cash flows of N4,000, N5,000 and N6,000 in the first three years of operations. If the cost of capital is 10%.
Required: Calculate:
a. The Net Present Value
b. The Accounting Rate of Return
c. The Pay Back Period
d. The Internal Rate of Return
e. The Profitability Index

42. a. Define Capital Budgeting.
b. Consider an investment which has the following cash flow:
Year
0
1
2
3
4
5
Cash Flow
(31,000)
10,000
20,000
10,000
10,000
5,000
Required: Calculate:
i. Pay Back Period
ii. Net Present Value at 14% cost of capital
iii. internal Rate of Return and advice if the project should be accepted or not.

43.  Calculate the net present value of two projects and suggest which of the two projects should be accepted assuming a discount rate of 11.5%.

Project A
Project B
Initial Investment
N35,000
N56,00
Estimated Life
5years
5years
Scrap Value
N2,000
N5,000
Cash flows are given as follow:
Year
Cash Inflow

Project A
N
Project B
N
1
10,000
40,000
2
15,000
30,000
3
8,000
10,000
4
6,000
5,000
5
4,000
4,000

44.  a. State four assumptions of CVP Analysis
b. The following information as extracted from the records of Fesojaiye Nigeria limited.
Fixed Cost                               N80,000
Selling Price/Unit           N60
Variable Cost/Unit                  N46
You are required to:
i. Use the information above to prepare a Break Even Chart.
ii. Indicate the Margins of Safety if unit sold is 8,500
iii. Established the Break Even Point in naira if fixed cost rises to N84,000 and selling price falls to N58 per unit.

45. Suppose a linear relationship exist between students intake and sales of pocket calculators in Lagos City Polytechnic.
Using Least Square Method (Y = a +bx) forecast calculator`s sales if the admission intake for the next session would be 2,500students.
Years
2011
2012
2013
2014
2015
2016
2017
2018
Calculator`s Sales
200
200
300
400
500
600
800
1,00
Student enrolment
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200

46. a. Define demand forecasting
b. Distinguish between qualitative forecasting and quantitative forecasting

47.  a. Explain how the concept of the theory of firm enhance productivity in manufacturing companies.
b. Identify seven differences between perfect competition and monopolistic competition.
c. Explain five factors to be considered before fixing price in a firm.

48. a. Define Series
b. Explain how fluctuations in time series data could be minimised.
c.  Estimate the sales for the year 2017 and 2018 from the data given below:
Years
2012
2013
2014
2015
2016
Sales
1,120
1,430
1,635
1,842
1,738


49. a. Differentiate between partnership form of business and a Limited Liability Company.
b. Why is Limited Liability Company preferred to partnership business?
c.  List internal and operational problems confronting managers of business enterprises.

50. a. You are given the following data:
X
3
6
8
10
13
13
14
16
Y
8
6
10
12
12
14
14
20
Estimate the regression equation Y = a + bx
b. Discuss properties of indifference curve.
c.  Write short note on the following terms:
i. A Company and Firm
ii. A Partnership Business
iii. Public Corporation



51.  Ajimaronu embark on two projects and you are required to calculate the net present value of two projects and suggest which of the two projects should be accepted assuming a discount rate of 11.5%.

Project A
Project B
Initial Investment
N35,000
N56,00
Estimated Life
5years
5years
Scrap Value
N2,000
N5,000
Cash flows are given as follow:
Year
Cash Inflow

Project A
N
Project B
N
1
10,000
40,000
2
15,000
30,000
3
8,000
10,000
4
6,000
5,000
5
4,000
4,000

52.   Ojutonsoro recently convinced her friends and relatives to grant her a loan of
N2,400,000 which she intends to invest in a farming project.
She estimates that the project will yield the following returns annually as
 follow:
          Year                     N`000
          1                               100
          2-5                            300
          6                               400
          7                               700
          8-10                      1,000
Ojutonsoro`s cost of capital is 20%.
As a student of Lagos City Polytechnic, Ikeja, Lagos. You are require to calculate using the following methods of capital budgeting techniques under certainty:
a.     Accounting Rate of Return (ARR)
b.     Payback Period (DPBP), assumed the initial investment to be half of the loan granted to Ojutonsoro.
c.      Net Present Value (NPV)

d.     Advice Ojutonsoro based on your results in (a-c) above.

53.Aiyegbaogbon Nigeria Limited provide the following data:

Year
Cashflow
0
(12,000)
1-6
4,500
7
3,000
8-10
2,500
 The cost of capital is 20%. 
Required: Calculate:
a. Net Present Value (NPV)
b. Internal Rate of Return (IRR)
c. Discounted Pay Back Period (DPBP)
54. SogbaeNigeria Limited provide the following data:

Year
Cashflow
0
(75,000)
1-3
10,000
4
15,000
5-8
5,000

9-10
13,000
The cost of capital is 12%. 
Required: Calculate:
a. Net Present Value (NPV)
b. Internal Rate of Return (IRR)
c. Discounted Pay Back Period (DPBP)
55.  Aiyele Nigeria Limited provide the following data:

Year
Cashflow
0
(12,000)
1-6
4,500
7
3,000
8-N
2,500
 The cost of capital is 5%. 
Required: Calculate:
a. Net Present Value (NPV)
b. Internal Rate of Return (IRR)
c. Discounted Pay Back Period (DPBP)

................................................................................................................................................
.................................................................................................................................................

PILOT ON MANAGERIAL ECONOMICS 1 (HBF 417/BAM412)


ILLUSTRATION 1
Ajimaronu embark on two projects and you are required to calculate the net present value of two projects and suggest which of the two projects should be accepted assuming a discount rate of 11.5%.

Project A
Project B
Initial Investment
N35,000
N56,00
Estimated Life
5years
5years
Scrap Value
N2,000
N5,000
Cash flows are given as follow:
Year
Cash Inflow

Project A
N
Project B
N
1
10,000
40,000
2
15,000
30,000
3
8,000
10,000
4
6,000
5,000
5
4,000
4,000

SUGGESTED SOLUTION
       Ajimaronu
Project A
Year
Cashflow
Dcf@11.5%
PV

N

N
0
(35,000)
1.000
(35,000)
1
10,000
0.897
8,970
2
15,000
0.804
12,060
3
8,000
0.721
5,768
4
6,000
0.647
3,882
5
4,000
0.580
2,320
5
2,000
0.580
1,160
Net Present Value (NPV)
(840)

Project B
Year
Cashflow
Dcf@11.5%
PV

N

N
0
(56,000)
1.000
(56,000)
1
40,000
0.897
35,880
2
30,000
0.804
24,120
3
10,000
0.721
7,210
4
5,000
0.647
3,235
5
4,000
0.580
2,320
5
5,000
0.580
2,900
Net Present Value (NPV)
19,665

Decision: Accept project B because it has the highest positive NPV of  N19,665

ILLUSTRATION 2
 If the demand and supply function of Ajiboluwasoro Product are:
QD  =  4,000 + 100P
QS   =  6,000 + 20P
Where P = Price of the product    QD = Demand Function    
         QS= Supply Function
Required:
a.     Compute the equilibrium price and quantity respectively.
b.    If price falls to N20, what is the excess supply?
c.    If price rises to N30, determine the excess demand.

SUGGESTED SOLUTION
Ajiboluwasoro
a.  The equilibrium price and quantity respectively is calculated as follow:
QD  =  4,000 + 100P
QS   =  6,000 + 20P
Where P = Price of the product    QD = Demand Function    
         QS= Supply Function

QD  =   QS
4,000 + 100P  =  6,000 + 20P
100P-20P  =  6,000 – 4,000
80P = 2,000
P  =  2,000    =  N25
             80
QD  =  4,000 + 100P
Since P= N25
QD  =  4,000 + 100(25)
QD  =  4,000 + 2,500  = 6,500
QS   =  6,000 + 20P
QS   =  6,000 + 20(25)
QS   =  6,000 + 500  =  6,500
The equilibrium Price is N25
The equilibrium Quantity is 6,500 Units
b.    If price falls to N20, the excess supply is calculated thus:
Since price fall to N20,  P= N20
QD  =  4,000 + 100(20)
QD  =  4,000 + 2,000  = 6,000
QS   =  6,000 + 20P
QS   =  6,000 + 20(20)
QS   =  6,000 + 400  =  6,400
The excess supply = Quantity Supply – Quantity Demand
The excess supply = 6,400 – 6,000 =   400 Units
c.    If price rises to N30, the excess demand is calculated thus:
Since price rises to N30,  P= N30
QD  =  4,000 + 100(30)
QD  =  4,000 + 3,000  = 7,000
QS   =  6,000 + 20P
QS   =  6,000 + 20(30)
QS   =  6,000 + 600  =  6,600
The excess demand = Quantity Demand - Quantity Supply
The excess supply = 7,000 – 6,600 =   400 Units

ILLUSTRATION 3
(a)  In the production of plastic, the average variable cost is N1.75 and the total fixed cost
           is N50,000 while the price per unity of the product is N2.
           Determine the break-even quantity   
(b) Ajimatanrareje & Co. has information about the demand that would be generated by
           certain selling price as follow:
Selling Price
(N)
22
18
14
12
10
8
4
0
Demand
(`000)
0
4
8
10
12
14
18
22
           The cost of producing each unit is N6 and the company incurred annual fixed cost of
            N30,000.
            Using the tabular approach to calculate the:
i.                    Optimal Selling Price
ii.                  Optimal Output
iii.                Optimal Profit

SUGGESTED SOLUTION
  (a)  The break-even quantity = Total Fixed Cost
                                                     Contribution Margin
Contribution Margin =  Selling Price per unit -  average variable cost
Contribution Margin =  N2 – N1.75  = N0.25
The break-even quantity = N50,000   =   200,000 Units
                                               N0.25
  
(b) Ajimatanrareje & Co.

Demand
Price
Total Revenue
Total Fixed Cost
Total Variable Cost
Total Cost
Profit
0
22
0
30,000
0
30,000
(30,000)
4,000
18
72,000
30,000
24,000
54,000
18,000
8,000
14
112,000
30,000
48,000
78,000
34,000
10,000
12
120,000
30,000
60,000
90,000
30,000
12,000
10
120,000
30,000
72,000
102,000
18,000
14,000
8
112,000
30,000
84,000
114,000
(2,000)
18,000
4
72,000
30,000
108,000
138,000
(66,000)
22,000
0
0
30,000
132,000
162,000
(102,000)
Note:
Total Revenue = Demand x Price
Total Variable Cost = Unit Cost x Demand i.e  6X
Total Cost = Total Fixed Cost + Total Variable Cost
Profit = Total Revenue – Total Cost
i.          Optimal Selling Price = N14
ii.        Optimal Output = 8,000Units
iii.      Optimal Profit = N34,000

ILLUSTRATION 4
a. Define demand and carefully relates it to explain utility, total utility and Marginal utility with the aid of graphical illustration.
b. Suppose price and cost function of a business firm is given as:
P= 400 – 2Q
T= 40 + 5Q2
Find:
i. Profit maximizing output and price
ii. Total revenue and average revenue function and profit made.

SUGGESTED SOLUTION
a. Demand is defined as the amount or quantity of goods and services which a consumer is willing to buy coupled with the ability to pay at a given price and at a particular time.
Utility is defined as the ability of a commodity or services to satisfy consumer`s wants.
 Total Utility is the total amount of satisfaction a consumer derives from the consumption of a particular commodity at a point in time.
 Marginal utility is the additional satisfaction a consumer derives from the consumption of additional unit of a particular commodity.




With the aid of graphical the above is illustrated.
Units of        MU                          TU
Utility




 
                  Unit of commodity consumed
b. i. Profit maximizing output and price is calculated thus:
P= 400 – 2Q
T= 40 + 5Q2
Profit = Total Revenue – Total Cost
Profit = (P x Q) – (40 + 5Q2)
Profit = (400 -2Q) x Q -  (40 + 5Q2)
Profit = 400Q- 2Q2 -40 -5Q2
Profit = 400Q-7Q2 -40
 d (profit)  =  d (400Q-7Q2 -40)   =   400 – 14Q
  d Q                  d Q
Let  d (profit)  = 0
         d Q        
0 =   400 – 14Q
14Q =  400
Q = 400  =   28.57142857    =  29 units
         14
Profit maximizing output is 29 units
Profit maximizing price is:
P= 400 – 2Q
P= 400 -2(29)
P = 400 – 58 =  N342

ii. Total revenue and average revenue function and profit made.
Total Revenue = 400Q- 2Q2
Total Revenue = 400 (29) – 2(29)2
Total Revenue = 11,600 – 1,682  = N9,918
Average Revenue Function = Total Revenue
                                                 Output
Average Revenue Function = 400Q- 2Q2  =   400 – 2Q
                                                     Q
Profit  made = 400Q-7Q2 -40
Profit = 400(29)-7(29)2 -40
Profit = 11,600  - 5,887 – 40 =  N5,673


ILLUSTRATION 5
(a)  Define the law of diminishing marginal utility and state three relationship between
           total utility and marginal utility.
(b)  Write short note on the following:
            i. Consumer  Surplus                    ii. Utility Maximization      iii. Indifference Map.
            iv. Market Demand Schedule       v. Demand Curve

SUGGESTED SOLUTION
(a)  The Law of Diminishing Marginal Utility is defined as a consumer consumes more and more units of a particular commodity, utility will increase up to a certain point when decrease in satisfaction or disutility will set in as a result of continuous consumption of the same commodity.
Three relationship between total utility and marginal utility are as follows:
i. When total utility is increasing, marginal utility is also increasing but must be below total utility except when the first unit is consumed.
ii. When total utility is maximized, marginal utility is usually zero.
iii. When total utility is decreasing, marginal utility is usually negative.
(b)  i. Consumer Surplus: Consumer Surplus is the difference between the amount a consumer budgeted to pay for a commodity based on the anticipated level of satisfaction. 
ii. Utility Maximization: Utility Maximization is a point where a consumer derives maximum satisfaction when his marginal utility equates the price of the commodity consumed.
iii. Indifference Map: Indifference Map is where two or more indifference curves are drawn on single diagram.
iv. Market Demand Schedule: Market Demand Schedule shows the relationship between the quantity of goods demanded at a particular time and the given market price of the same goods at the same time.
v. Demand Curve: Demand Curve is a diagrammatical representation of the relationship between price and quantity demanded at any point in time.

ILLUSTRATION 6
 (a)  Managerial Economics uses economic concept and decision science techniques to
           solve managerial problems. Discuss
(b)  What is the value of firm when in its first five years of its operation, it recorded a
             total cost of N75,000 and total revenue of N85,000 at 15% interest rate for the first
             year and for year 2 to year 5, it recorded the following:      

Year 2
N`000
Year 3
N`000
Year 4
N`000
Year 5
N`000
TR
70
80
90
100
TC
40
30
70
60
Interest Rate
14%
13%
12%
10%


SUGGESTED SOLUTION
(a)  Managerial Economics uses economic concept and decision science techniques to
solve managerial problems.
Managerial Economics is the application of economic theory and methods to business and administrative decision making. It uses the tools and techniques of economic analysis to solve managerial problems.
The Economic concepts which are the framework for decisions include the following among others:
i. Theory of Consumer Behaviour     ii.  Theory of the firm   iii. Theory of market structure and pricing.
The decision science techniques are tool and techniques of analysis include:
i. Numerical Analysis   ii. Statistical Estimation   iii. Forecasting     iv.  Game Theory
v. Optimization     vi. Simulation
The management decision problems include:
i. Product Price and Output   ii. Make or Buy    iii. Production Techniques  iv. Stock Levels
v. Production Techniques   vi. Advertising Media and Intensity     vii. Labour Hiring and
Training    viii. Investment and Financing.
Conclusively, based on the above analysis, Managerial Economic uses Economic Concepts
and Decision Science Methodology to solve Managerial Decision Problems

      (b) 

Year
Total Revenue
(TR)
Total Cost (TC)
Profit
Interest Rate
Present Value

N
N
N
%
N
1
85,000
75,000
10,000
15%
8,696
2
70,000
40,000
30,000
14%
23,084
3
80,000
30,000
50,000
13%
34,653
4
90,000
70,000
20,000
12%
12,710
5
100,000
60,000
40,000
10%
24,837
Value of a firm
103,980


ILLUSTRATION 7
Ajimatanraeje recently convinced her friends and relatives to grant her a loan of  N2,400,000 which she intends to invest in a farming project.
She estimates that the project will yield the following returns annually as follow:
          Year                     N`000
          1                               100
          2-5                            300
          6                               400
          7                               700
          8-10                      1,000
Ajimatanraeje `s cost of capital is 20%.
As a student of Lagos City Polytechnic, Ikeja, Lagos. You are require to calculate using the following methods of capital budgeting techniques under certainty:
     a.     Accounting Rate of Return (ARR)
     b.     Payback Period (PBP), assumed the initial investment to be half of the loan granted to Ajimatanraeje.
     c.      Net Present Value (NPV)
     d.     Advice Ajimatanraeje based on your results in (a-c) above.

SUGGESTED SOLUTION
a.     Ajimatanraeje
Option 1:  
Accounting Rate of Return (ARR) = Average Profit          x 100
                                                           Average Investment       1
Average Profit  = 100,000 + 300,000 + 300,000 + 300,000 + 300,000 + 400,000 + 700,000
                              + 1,000,000 + 1,000,000 + 1,000,000
                                                                        10
Average Profit  =   5,400,000   =   N540,000
                                      10
Average Investment = Initial Investment
                                                2
Average Investment = 2,400,000    =   N1,200,000
                                                2
Accounting Rate of Return (ARR) =  540,000    x  100     =    45%
                                                          1,200,000          1
Option 2:  
Accounting Rate of Return (ARR) = Average Profit          x 100
                                                            Initial Investment       1
Accounting Rate of Return (ARR) =  540,000    x  100     =    22.5%
                                                          2,400,000          1

     b.      Ajimatanraeje
PayBack Period (PBP)
Year
Cash flow
Cumulative Cash flow
0
(1,200,000)
(1,200,000)
1
100,000
(1,100,000)
2-5
300,000

6
400,000

7
700,000

8-10
1,000,00

PayBack Period (PBP)  =  4 years + 200,000  years
                                                           300,000
PayBack Period (PBP)  =   4years + 0.7 years
PayBack Period (PBP)  =  4.7years
Alternative solution:
PayBack Period (PBP)  =  4 years + 200,000  x 12months
                                                           300,000
PayBack Period (PBP)  =   4years + 8 months
PayBack Period (PBP)  =  4years 8 months

     c.      Net Present Value (NPV)
Year
Cash flow
DCF@20%
PV
0
(2,400,000)
1.000
(2,400,000)
1
100,000
0.833
83,300
2-5
300,000
2.158
647,400
6
400,000
0.335
134,000
7
700,000
0.279
195,300
8-10
1,000,00
0.587
587,000
Net Present Value (NPV)
(753,000)

     d.    Based on the results in (a-c) above, Ajimatanraeje accept the project using both accounting rate of return and payback period but reject the project when using net present value because it has negative NPV of N753,000.

ILLUSTRATION 8
The demand and supply functions of Otisese Nigeria Limited are given as:
Quantity Demand (Qd) = 20-3P
Quantity Supply (Qs) = 6P -16
Where P= Price in naira
a.       Compute the equilibrium price and quantity respectively.
b.       If price falls to N2, determine the excess demand.
c.       If price rises to N6, what is the excess supply?

SUGGESTED SOLUTION
.  Otisese Nigeria Limited
Quantity Demand (Qd) = 20-3P
Quantity Supply (Qs) = 6P -16
Where P= Price in naira
a.  The equilibrium price and quantity respectively is calculated below:
Qd   =  Q s
20-3P   =  6P -16
20 + 16  = 6P + 3P
36  =  9P
P =  36     =  N4
        9
Since P = N4
Qd = 20 – 3P
Qd = 20 – 3(4)
Qd = 20 – 12 = 8 units
Qs = 6P – 16
Qs = 6(4) -16
Qs = 24 - 16   =  8 units
The equilibrium price is N4
The equilibrium quantity is 8units
b.  If price falls to N2, the excess demand is calculated thus:
Since P = N2
Qd = 20 – 3P
Qd = 20 – 3(2)
Qd = 20 – 6 = 14 units
Qs = 6P – 16
Qs = 6(2) -16
Qs = 12 - 16   =  -4 units
The excess demand = quantity demanded  -   quantity supply
The excess demand = 14 –( -4)
The excess demand = 14 + 4  =  18 units
c.  If price rises to N6, the excess supply is calculated thus:
Since P = N6
Qd = 20 – 3P
Qd = 20 – 3(6)
Qd = 20 – 18 =  2 units
Qs = 6P – 16
Qs = 6(6) -16
Qs = 36- 16   =  20 units
The excess supply =  quantity supply -quantity demanded 
The excess supply = 20 –2  =  18 units

ILLUSTRATION 9
a. Define demand and carefully relates it to explain utility, total utility and Marginal utility with the aid of graphical illustration.
b. Suppose price and cost function of a business firm is given as:
P= 400 – 2Q
T= 40 + 5Q2
Find:
i. Profit maximizing output and price
ii. Total revenue and average revenue function and profit made.

SUGGESTED SOLUTION
a. Demand is defined as the amount or quantity of goods and services which a consumer is willing to buy coupled with the ability to pay at a given price and at a particular time.
Utility is defined as the ability of a commodity or services to satisfy consumer`s wants.
 Total Utility is the total amount of satisfaction a consumer derives from the consumption of a particular commodity at a point in time.
 Marginal utility is the additional satisfaction a consumer derives from the consumption of additional unit of a particular commodity.
With the aid of graphical the above is illustrated.
Units of        MU                          TU
Utility




 
                  Unit of commodity consumed
b. i. Profit maximizing output and price is calculated thus:
P= 400 – 2Q
T= 40 + 5Q2
Profit = Total Revenue – Total Cost
Profit = (P x Q) – (40 + 5Q2)
Profit = (400 -2Q) x Q -  (40 + 5Q2)
Profit = 400Q- 2Q2 -40 -5Q2
Profit = 400Q-7Q2 -40
 d (profit)  =  d (400Q-7Q2 -40)   =   400 – 14Q
  d Q                  d Q
Let  d (profit)  = 0
         d Q        
0 =   400 – 14Q
14Q =  400
Q = 400  =   28.57142857    =  29 units
         14
Profit maximizing output is 29 units
Profit maximizing price is:
P= 400 – 2Q
P= 400 -2(29)
P = 400 – 58 =  N342

ii. Total revenue and average revenue function and profit made.
Total Revenue = 400Q- 2Q2
Total Revenue = 400 (29) – 2(29)2
Total Revenue = 11,600 – 1,682  = N9,918
Average Revenue Function = Total Revenue
                                                 Output
Average Revenue Function = 400Q- 2Q2  =   400 – 2Q
                                                     Q
Profit  made = 400Q-7Q2 -40
Profit = 400(29)-7(29)2 -40
Profit = 11,600  - 5,887 – 40 =  N5,673


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