Dibrugarh University Question Paper: Business Economics (May' 2015)

2015 (May)
(General / Speciality)
Course: 202
Time: 3 hours
(Business Economics)
Full Marks: 80
Pass marks: 24

The figures in the margin indicate full marks for the questions
(New Course)
1.       Answer the following as directed :                                                                   1x8=8
(i)            Elasticity of demand at the midpoint of a straight line demand curve is >1 / 1 / <1. (Choose the correct answer.)
(ii)          Perfectly inelastic demand curve is parallel / vertical to the vertical axis. (Choose the correct answer.)
(iii)         An assumption to the law of supply is ‘there will be no change in input prices’.  (State True or False)
(iv)        Production function shows the physical relationship between _____ and _____. (Fill in the blanks)
(v)          Internal economies are enjoyed by a business firm due to a decrease / increase in its scale of operation. (Choose the correct answer)
(vi)        Under perfectly competitive market AR is not equal MR. (State True or False)
(vii)       The short-run supply curve of a firm under perfect competition always slopes downward / upward. (Choose the correct answer)

(viii)     Market price in a long-run / short-run / very short-run price. (Choose the correct answer)

2.       Write on the following in brief :                                                                         4x4=16
(a)    Basic problems of an economic system.
(b)   Cross-elasticity of demand.
(c)    Properties of isoquants.
(d)   Normal profit and supernormal profit.

3.       (a) Discuss the nature and scope of business economics.                                      14
(b) Explain the working of price mechanism. Discuss whether price mechanism can be ensure maximum social welfare.                                                                                 10+4=14

4.       (a) Explain the concept of income elasticity of demand. Discuss the importance of income elasticity of demand concept in business economics.                                  8+6=14
(b) What are factors that determine price elasticity of demand? What role does price elasticity of demand play in the decision-making by business firms?                                                                         8+6=14

5.       (a) Explain the law of variable proportions with suitable diagram. In which stage a rational producer will seek to produce?                                                                                             10+4=14

        (b) Discuss the internal and external economies of a business firm.                          14

6.       (a) Explain Baumol’s sales revenue maximization hypothesis and mention some of the criticisms leveled against it.                                 9+5=14
(b) Discuss the features of perfectly competitive market. Explain the process of price output determination in the short-run under such market.                                                5+6=14

(Old Course)
Full Marks: 80
Pass Marks: 32

1.       Answer the following as directed :                                   1x8=8
(i)         Business Economics is micro / macro economics in nature. (Choose the correct answer)
(ii)       The mechanism of price determination by the free play of forces of demand and supply is knows as _____ mechanism. ( Fill in the blank )
(iii)      The marginal rate of technical substitution increases as more and more of one input is substituted for the other input. ( State True or False )
(iv)     A firm under perfect competition can / cannot determine the price. (Choose the correct answer)
(v)       Very short-run price is knows as normal price. (State True or False)
(vi)     A firm under perfect competition in the long-run earns only _____ profit.  (Fill in the blank)
(vii)    Price discrimination will be profitable only when the monopolist funds that the price elasticity of demand for his product is different in the different markets. ( State True or False )
(viii)  When the firms under oligopoly reach and understanding in price and output determination, it is knows as pure oligopoly / collusive oligopoly. ( Choose the correct answer )

2.       Write on the following in brief :                                         4x4=16
(a)    Relationship between business economics and traditional economics.
(b)   Isoquants.
(c)    Price discrimination.
(d)   Baumol’s sales revenue maximization hypothesis.

3.       (a) Discuss the characteristics and scope of business economics.                       6+5=11
(b) Discuss the basic problems of an economic system. Explain how are the basic problems solved through the price mechanism.                                                       6+5=11
4.       (a) What is meant by price elasticity of demand? How is the price elasticity of demand measured on a linear demand curve?                                                                  3+8=11
(b) Define cross-elasticity of demand. Discuss its importance in business economics.                       5+6=11
5.       (a) State the assumptions of the law of diminishing returns. Explain the theory with the help of suitable diagram.                     3+8=11
(b) Discuss the internal economies and diseconomies of a business firm.                                                               8+3=11
6.       (a) Explain the profit maximization objective of business firms. On what grounds it has been criticized in recent times?                                8+4=12
(b) What are the features of perfect competition? Explain how is the price outputs determined under such market in the short –run.                                         4+8=12
7.       (a) Discuss the differences between monopoly and perfect competition. Explain how are the price and output determined under monopoly.                   3+8=11
(b) Discuss the characteristics of oligopoly. Explain the price output determination process under ‘price leadership’ in oligopoly.                                                            3+8=11