F D192001 Pages:2

Reg No.:_ Name:
APJ ABDUL KALAM TECHNOLOGICAL UNIVERSITY
FOURTH SEMESTER B.TECH DEGREE EXAMINATION(S), DECEMBER 2019

Course Code: HS200
Course Name: BUSINESS ECONOMICS

Max. Marks: 100 Duration: 3 Hours
PARTA

Answer any three questions, each carries10 marks. Marks

1 a) What are the central problems of an economy? (6)

0) Suppose a country's actual production is at a point inside the PPC. Explain the (4)
implications of this situation with a diagram.

2 a) What is marginal utility? State the law of diminishing marginal utility. Point out (6)
any four assumptions of the law.

b) Draw a demand curve and state the law of demand. Explain any two exceptions (4)
of the law.

3 9) What is demand for a commodity? Suppose the demand of a commodity (6)
decreases without any change in its price. What are the possible reasons?

b) Suppose a consumer purchases 50 units of a commodity X when his monthly (4)
income is Rs.25000/- If he purchases 40 units only when his monthly income
increases to Rs.30000/-, estimate income elasticity of demand? What type of a
commodity is this?

4 9) How is the equilibrium price of a commodity determined? Suppose there is a (6)
technological improvement. How does it affect supply, equilibrium quantity as

well as price of the commodity? Substantiate your answer with a diagram.

0) In the Cobb-Douglas production function ച KP » define Q and 8. (4)

If ©+ 8 - 1, what does it mean?
PART 13
Answer any three questions, each carries10 marks.

5 2) Suppose the fixed expense of a firm includes rent Rs.10000 and interest payment (6)
Rs.5000. It produces note books and sells it at a price of Rs.20. If the average
variable cost per note book is Rs.10, estimate break-even level of output and the
profit earned when it sells 2000 note books.

b) Selling price of a product is Rs.20, AC=22 and AVC=18. Will this firm continue (4)

its production or shutdown in the short run? Give reason

Page 1 of 2