F F4860 Pages: 2

Reg No.: Name:

APJ ABDUL KALAM TECHNOLOGICAL UNIVERSITY
THIRD/FOURTH SEMESTER B.TECH DEGREE EXAMINATION, APRIL 2018

Course Code: HS200
Course Name: BUSINESS ECONOMICS

Max. Marks: 100 Duration: 3 Hours
PART A
Answer any three questions, each carries 10 marks. Marks

1 2) Examine the meaning and scope of Business Economics (6)

b) Suppose an economy’s production is at a point inside its PPC. What does it (4)
mean? Draw a diagram and explain.

2 2) Define total utility and marginal utility. Suppose a boy consume more and more (5)
ice creams Prepare a hypothetical total utility schedule and derive marginal
utilities from it.

b) What are the central problems of an economy? (3)

c) What is opportunity cost? (2)

3 a) How is equilibrium price of a commodity determined? Suppose the number (6)
of buyers of a commodity increases. How does it affect market demand and
equilibrium price? Draw a diagram and explain.

b) Suppose the finance minister increases the tax on those commodities where (4)
demand is highly elastic. What happens to total tax revenue? Why?

4 a) What is a production function? Distinguish between fixed proportion and (6)
variable proportion.

b) Suppose the production function is given as 0 = 317147? Find average and (4)
marginal product of labour when L(labour) equals 9 and K(capital) equals 4.

PART B
Answer any three questions, each carries 10 marks.
5 98) Complete the following short run cost schedule. Cost is given in rupees. (6)
Output(units) TC TFC TVC MC
0 100 −−− −−−−
↕−−−−− −−−− 50 ----
BO oe ಎ ---- 40

b) Derive the relation between MC and AVC in the short run with the help of a diagram. (4)

6 a) What is perfect competition? Demand curve facing a firm under perfect competition is (6)
perfectly elastic. Why?

b) Suppose the PV Ratio of a firm is given as 0.25 and its total fixed cost is Rs. 10,000/-. (4)
What is the break-even sales of the firm? If the actual sales is Rs. 60,000/-, what is the
margin of safety?

7 a) What 18 inflation? What are the fiscal policy measures to control inflation? (6)

b) What is repo rate? How does RBI use it as a measure to control inflation? (4)

8 2) National income of a country is given as 2850. If the annual depreciation is 300, net (6)

factor income from abroad -50 and net indirect tax 100, estimate 0102௫. (All figures are

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