APJ ABDUL KALAM TECHNOLOGICAL UNIVERSITY
THIRD SEMESTER B.TECH DEGREE EXAMINATION, JANUARY 2017

HS200: BUSINESS ECONOMICS
Max marks: 100 Time: 3 hours

PARTA
(Answer any three questions. Each carries 10 marks)
1. a) What is a production possibility curve? With the help of a production possibility curve, explain
i) Under utilisation of resources ii) Full employment of resources (6)
b) How will you use a production possibility curve to explain opportunity cost? (4)
2. a) What is marginal utility? Suppose a consumer consumes more and more apples.
What happens to his marginal utility and total utility? Substantiate your answer with the help of a
schedule and diagram. (8)
b) A product may be useful or harmful but it may possess utility. Do you agree? If yes give
reason. (2)
3. a)Aconsumer purchased 10 units of a product in the month of June. At the same price he purchases
15 units of the same product in the month of July. Give four reasons for this increase in demand.(6)
b) What is price elasticity of demand? Surpose elasticity of demand of a product is 2. If the price
of the product increases by 10 percentage at what percentage its demand will decrease? (4)

4. a) How is equilibrium price of a commodity determined? (4)

ಚ = 123102 ,
b) In a production function 25 217. (४ , if L=36 how many units of capital are needed to

produce 60 units of output? (2)

c) In the production function Q=2L'?K'” determine the percentage increase in output

if labour is increased by 10 percent assuming that capital is held constant. (4)
PART B

(Answer any 3 questions. Each carries 10 marks)
5. a) What is break-even analysis? (2)

b) Suppose a Company produces batteries and its fixed cost is Rs. 50,000/-.
If variable expense per battery is Rs.3/- and price of battery is Rs 8/- estimate

i. Break-even level of output. (3)

ii Number of batteries to be produced to get a total profit of Rs. 25000/- (3)

iii What is the margin of safety if the planned sales is 12000 batteries? (2).
6. a) Distinguish between fixed cost and variable cost. (3)

Page 1 of 3