Brief Answer Questions: Attempt ALL questions.
[10×2=20]Why does production possibility curve slope concave downwards?
Write any four factors that cause rightward shifts in demand curve.
Let, ey (mobile set) =2.3 ey(potato) =-0.8. Describe the nature of these two goods.
List out any four assumptions of indifference curve analysis.
Let, CA = Rs. 400000, CB = Rs. 200000, CA+B = Rs 500000. Determine degree of economies of scope.
Prepare a list of examples of explicit costs.
State the relationship between price elasticity of demand and marginal revenue.
Why do firms involve in cartel?
What are the causes for interest rate differentials?
Let c = Rs. 2000, r = Rs. 50, w = Rs. 40. Determine the slope of iso-cost line.
Descriptive Answer Questions: Attempt any FIVE questions.
[5×10=50]Describe the nature and scope of business economics. [5+5]
What is an economic efficiency? How can it be measured? [2+8]
Let, production function, Q=14L + 7L2 - L3. Compute TP, AP and MP, graph them and explain three stages of production with proper reasons. [2+3+5]
Explain the concept of incremental cost pricing with suitable examples.
What are the motives of demand for money according to Keynes? Explain.
Consider the following cost schedule:
| Q: | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| TVC: | 0 | 20 | 36 | 48 | 64 | 100 | 160 | 248 | 360 | 520 |
a. Compute TC, AFC, AVC, AC and MC at TFC = Rs. 200.
b. Graph AC and MC and describe their relationship.
Analytical Answer Questions: Attempt any TWO questions.
[2×15=30]What is price effect? How can it be decomposed into income effect and substitution effect? [2+13]
State the characteristics of monopolistic competition. How are the price and the output determined under it in short-run? In what respects, monopolistic competition differ from perfect competition? [3+9+3]
Consider the following table
| Points: | A | B | C | D | E |
| Px: | 8 | 6 | 4 | 2 | 0 |
| Qsx: | 50 | 40 | 30 | 20 | 10 |
| Qdx: | 0 | 15 | 30 | 45 | 60 |
a. Derive linear demand and supply functions. [2]
b. Graph Qsx and Qdx and determine equilibrium price and quantity. [2]
c. Compute price elasticity of supply at movement from B to D and D to B by (i) percentage method and (ii) arc method. Which method is more appropriate and why? [4+2]
d. How do business firms use the concept of price elasticity of demand in business decision making? Explain. [5]