We have TU BBS 1st Year Model Question of Micro-Economics.
Model Question of Micro-Economics
Subject: Business Economics
Subject Code: MGT 207
Year: 2019
Full Marks: 100
Pass Marks: 35
Time: 3 hrs
Group A ( 10*2= 20 )
Brief Answer Question ( Attempt all the questions )
1. What is incremental analysis in economics?
2. What is the effect of increase in tax in equilibrium price and quantity?
3. Define cost elasticity of demand?
4. Differentiate between cardinal approach and ordinal approach for demand analysis.
5. Draw the budget line if income of the consumer is Rs. 20,000, Price of good X is Rs.100 and price of good Y is Rs. 200.
6. Why does isoquant slope downward?
7. Differentiate between explicit cost and implicit cost.
8. Define predatory pricing.
9. Calculate the equilibrium level of output of the firm when the marginal revenue is MR = 300 – 0.002Q and marginal cost is MC = 20+0.0008Q
10. Prepare a list of factors that causes wage differentials.
Group B ( 5*10 = 50 )
Descriptive Question Answer ( Attempt only 5 questions )
11. How the production possibility curve is useful to illustrate the economic concepts?
12. What is demand function? Explain its type.
13. Explain the degrees of price elasticity of supply. Value of price elasticity of demand of milk is calculated as -0.7 and price elasticity of demand of coffee is calculated as – 2.0, interpret the results and explain the nature of the goods.
14. Explain the law of returns to scale.
15. Explain the Consumer’s equilibrium in cardinal approach under one-commodity model. Find the consumer’s equilibrium if the price of the is Rs. 20, price of banana is Rs. 10, the consumer spends the whole income Rs. 110 on apple and banana with following marginal utility (MU) schedule.
| Units of Consumption | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| MU of Apple | 800 | 700 | 600 | 500 | 400 | 300 | 200 |
| MU of Banana | 500 | 450 | 400 | 350 | 300 | 250 | 200 |
16. Consider the following table of labor productivity
| Labor | 0 | 1 | 2 | 3 | 4 | 5 |
| Total Product | 0 | 10 | 18 | 24 | 28 | 30 |
Price of the product is Rs. 5 and wage rate is Rs. 30 Find the marginal physical product and marginal product revenue of labor. How does a firm employ profit maximizing number of labor? If wage rage increases to Rs. 40 , What will be the equilibrium situation.
Group C
Analytical Question Answer ( Any Two )
17. Define Cartel. Explain its type. How price is determined under centralized cartel?
18. Consider the following schedule of a competitive firm:
| Output | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
|---|---|---|---|---|---|---|---|---|
| AVC | 30 | 27 | 24 | 24 | 30 | 39.9 | 53.1 | 67.5 |
| AC | 300 | 117 | 123.9 | 99 | 90 | 90 | 96 | 105 |
| MC | 30 | 24 | 18 | 24 | 54 | 90 | 132 | 168 |
a. Graph AVC, AC and MC. What is the position of the firm’s profit at price Rs. 132, 90, and Rs. 54? What is the position of the firm at price Rs. 24? Does this point refer to the shut down point ? Give Reason.
b. Using the cost schedule, explain the relationship of AC with AVC and AFC.
19. ” Price effect is the sum of income effect and substitution effect”. Explain with the example of Giffen goods.
Other Important Links
Notes of BBS 1st Year Microeconomics: CLICK HERE
Microeconomics Notes in Nepali: CLICK HERE
