Introductory Microeconomics-BBA | Old Question Paper 2008| Semester – Fall

questionIntroductory Microeconomics
BBA Second Semester
Old Question Paper
Year: 2008 | Semester : Fall
Pokhara University
Management Notes

Exam 2008 Fall

1. a. ‘Scarcity is the cause of all economic problems’. Discuss. [7]
b. Define market demand and explain the determinants of market demand. [8]

2. Consider the following hypothetical table: [4+4+4+3]

Combination A B C D
Price 10 14 18 20
Quantity Demanded 20 15 8 2

On the basis of information given above, calculate

a. Price elasticity of demand from A to B
b. Price elasticity of demand from D to C
c. Average elasticity of demand from B to D and interpret your results.
In what situation we prefer average elasticity instead of point elasticity.

3. a. Define indifference curve and explain consumer’s equilbrium with the help of ordinal utility analysis. [8]
b. Segregate price effect into income and substitution effects. [7]

4. a. Explain the methods of finding out the least cost combination of inputs in the production theory. [7]
b. The short run total cost is
TC=200+5Q-0.040Q^2+0.001Q^3 [4+4]
If Q=10
Find,
i. Total fixed cost
ii. Average variable cost
iii. Average fixed cost
iv. Marginal Cost

5. a. How are average revenue (AR) and marginal revenue (MR) curves are related with one another in perfect competitive and monopolistic competitive markets? [8]
b. Distinguish between short-run and long-run of the firm under perfect competition. [7]

6. a. Determine equilibrium price and output under monopoly. [7]
b. What is derived demand? How marginal revenue productivity (MRP) plays an important role to derive the demand curve for labour? Explain. [8]

7. Write short notes on (Any Two) [2×5]
a. Opportunity Cost
b. Variable Inputs
c. Monospsony in the Labour market
d. Efficient firm

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