Business Economics — DU B.Com (P) Previous Year Question Papers

1. (a) "Other things remaining same, the price and quantity supply of any commodity are directly related." In light of this statement, explain the others things. (9) Also, explain why supply curve is upward sloping? (b) Explain the following statements/situations with the help of demand and supply (9) (i) The effect on demand of a policy measure tolban the sale of cigarette - and alcohol near university campus. (i: Promoting the fruits export should increase the fruits price in domestic market. (Ili) Promotion of electric vehicle will decrease the demand for petrol/ diesel vehicle. (c) Given three demand schedules, Identify and explain the situation of total expenditure method of price elasticity of demand. 1(9). Quantity Commodity A 100 120 150 200 300 600 (d) "Elasticity of supply measures the responsiveness of supply of any goods to change its own price". In light of this statement, explain with diagram the different degrees vi price elasticity of supply. (9) 2. (a) What is budget line? In what circumstances it will shift? Explain with diagram. (9) (b) Explain the consumer equilibrium with the help of indifference curve? Also i explain with diagram that what will happen if at the point of equilibrium, the indifference curve is concave to origin? • (9) (c) Suppose the price of good X is 75 per unit and price of goods Y is 110 per unit. The monetary income is $100: You are required to! (i) Calculate the intercept and slope (i) Write budget equation. (iii), Show and comment on equilibrium. (iv) On this budget line, what is the slope of indifference curve at equilibrium point. (9) (d) With help of budget line and indifference curve prove that government policy of lump-sum subsidy has better effect on welfare of consumer than excise-subsidy. (9) 3. (a) Describe different types of returns to scale with the help of suitable diagrams. Discuss the factors responsible for the occurrence of each. 19) (b) Distinguish between short-run and long-run expansion paths of a firm. Explain how each shows the firm's optimal input combinations as output increases. ...) (c) Discuss how Long-run Average Cost (LAC) curve is derived from a family of Short- run Average Cost (SAC) culves. Explain why LAC curve is referred to as the firm's planning curve. (9) (d) Explain the relationship between production and cost curves. How an understanding of this relationship is relevant for making effective business decisions? Discuss. (9) Under what condition does a perfectly competitive firm shut down in the Short run? Explain with the help of a diagram. (9) (b) "The supply curve under monopoly is indeterminate". Discuss this statement in the absence of the unique relationship between price and quantity supplied. (9) (c) Discuss long-run equilibrium in monopolistic competition. Explain the -managerial implications of the entry of new firms into the industry in the long-run. (9)