Modern College of Business and Science Construction Economics Questions Economics ………………………………………………………

Modern College of Business and Science Construction Economics Questions Economics

………………………………………………………………… HIGHER COLLEGE OF TECHNOLOGY
DEPARTMENT OF ENGINEERING
SECTION:
CAE
EEE
MIE
Final Assignment
Semester: 2 A. Y: 2019 / 2020
1st May 2020
Time: 10:00 AM
3rd May 2020
Time: 10:00 AM
Date of Assignment posting:
Date of Uploading:
Student Name
Student ID
Specialization
Quantity Surveying
Level
Higher Diploma
Course Name / Course Code
CEQS3231 – Construction Economics
Section No.
1&2
Moderator’s Approval:
PC’s Approval:
48 hours
Question No.
PART- 1
Q 1.
Q 2.
Q 3.
Q 4.
PART- 2
Q 1.
Q 2.
Sub-Total
Marks
Max. Marks
Obtained
Marks
Question No.
Max. Marks
Q 3.
Q 4.
5
7
PART- 3
Q 1.
Q 2.
Q 3.
9
7.5
3.5
2
3.5
2.5
2
3
5
18
Grand Total
Marks
Course Lecturer: Ms. Sreevidhya M S
Sub-Total Marks
32
____ / 50
Second Marker:
Student’s Declaration: (to be filled by student)
Student Name: __________________
ID: _________
Signature: _________
(Digital Signature)
Page 2 of 6
Obtained
Marks
PART – 1 (10 marks)
Q 1.
Muscat bakery in Al Khuwair is supplying cakes and donuts on a large scale. If the
[2]
bakery has upgraded their baking machine to a new automated version with increased
capacity, explain how the Production Possibility Frontier varies after the installation of
this new machine.
Q 2.
The demand & supply schedule for a market is given in Table 1.
Table 1: Demand & Supply Schedule
Price (OMR)
Demand (thousands)
Supply (thousands)
30
44
28
40
40
32
50
36
36
60
32
40
Calculate:
i.
The price elasticity of demand when the price is OMR 40 from the initial price
[1]
chart.
ii.
The price elasticity of supply when the price is OMR 50 from the initial price
[1]
chart.
iii.
Suppose the government sets a price value of OMR 30. Will there be a
[1.5]
shortage or surplus condition, and, if so, how large will it be?
Q 3.
Mr. Khalil borrowed OMR 8,000 from HSBC bank at an interest rate of 8.5%.
Calculate how much interest will be due in 73 weeks using the following interest
methods:
Q 4.
i.
Simple interest method if the rate of compounding is done annually.
ii.
Compound interest if the interest is compounded quarterly.
Assume a country in which the factors of production are owned by the private sector
and the government gets involved in decisions like what type of infrastructure is to be
built, any regulations on labor wages etc. Identify what type of economic system the
Page 3 of 6
[1]
[1.5]
[2]
country follows and give any 2 reasons to support your answer.
PART – 2 (20 marks)
Q 1.
Mr. Hussain makes a monthly deposit of OMR 100 into an annuity for a period of 30
[3]
years. Calculate the annual rate compounded monthly, so that after 30 years his
account will be credited by OMR 160,000.
Q 2.
Al Zahira company is evaluating a project that would last for 3 years. The project’s
[5]
internal rate of return is 9.71%. Its Net Present Value is OMR 6,700 and the expected
cash flows are presented in the Table 2. Calculate X.
Table 2: Cash Flow
Q 3.
Years from today
0
1
2
3
Expected cash flow
65,000
52,000
13,000
X
Mr. Ammar and Mr. Akbar have decided that both will save OMR 4,000 each
[5]
annually. Mr. Ammar open his savings account at the age of 22 and continues it till he
reaches 32. In addition, the total of 10 deposits that he made is compounded annually
at an interest rate of 11% and then he deposits nothing till his retirement at age 65 (33
years afterwards). Mr. Akbar begins at age 31 depositing OMR 4,000 a year until
retirement at age 65 (34 deposits). How much amount will each of them have at the
age of retirement?
Q 4.
Ray International company has planned to invest OMR 100,000,000 into the
construction industry. The company has received four investment proposals from firms
A, B, C & D. After a detailed evaluation, the company has accepted the proposal from
the firm C. What are the factors that the company has analyzed to accept the
investment proposal from C?
Page 4 of 6
[7]
PART – 3 (20 marks)
Q 1.
You are evaluating an investment project with the following cash flows in Table 3.
Table 3: Cash Flow
Period (Years)
Cash Flow (OMR)
0
100,000
1
35,303
2
35,303
3
35,303
4
35,303
5
35,303
Calculate the following:
i.
Payback period.
[1]
ii.
Internal rate of return. (Take the lower rate of return as 18% & the higher rate
[8]
of return as 24%).
Q 2.
The demand equation for a product is given as Qd = 8X-20P+50Y where X=175, Y=8
and P stands for the price. Table 4 shows the price-supply schedule for the product.
i.
Using the demand equation, frame a demand schedule for the product.
Table 4: Price-Supply Schedule
Price
(OMR)
Quantity
supplied
70
1800
60
1600
50
1400
40
1200
30
1000
20
800
10
600
0
400
Quantity demanded
Page 5 of 6
[2]
ii.
Using the demand and supply schedule draw a market equilibrium graph with
[4.5]
all the details.
iii.
Q 3.
What is the price and quantity at the equilibrium point?
[1]
Table 5 shows the production possibilities of pillows and blankets. Show these data
[1.5]
graphically and mark the points A, B, C, D, E & F on the graph.
Table 5: Production table for pillows & blankets
Type of
Production
A
B
C
D
E

F
Pillows
50
47
42
35
20
0
Blankets
0
1
2
3
4
5
Calculate the opportunity cost for each of the following:
i.
A to C.
[0.5]
ii.
D to F.
[0.5]
iii.
E to B.
[0.5]
iv.
D to A.
[0.5]
__________________ End of the Assignment __________________
Page 6 of 6

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