BBS Microeconomics for Business

Business economics normative in character. Why?

What is microeconomics? Explain its uses in solving operational problems faced by business firms.

Write any four uses of microeconomics.

Describe the nature of business economics.

What are the characteristics of business economics?

Describe the nature of microeconomics.

Why does production possibility curve slope concave downwards?

Describe the nature and scope of business economics.

What are the uses of microeconomics?

Write any four principles of economics.

Draw a production possibility curve and show the efficient and inefficient combinations of production of an economy on the curve?

(उत्पादन सम्भाव्यता वक्रको रेखाचित्र बनाउनुहोस् र एउटा अर्थतन्त्रको कुशल र अकुशल उत्पादन संयोगहरूलाई रेखाचित्रमा देखाउनुहोस् ।)

Differentiate between static and dynamic analysis in microeconomics.

(सूक्ष्म अर्थशास्त्रमा स्थिर र गतिशील विश्लेषण बिच भिन्नता छुट्ट्याउनुहोस् ।)

Write any four scopes business economics.

(व्यवसायिक अर्थशास्त्रका कुनै चारवटा क्षेत्रहरु लेख्नुहोस् ।)

Draw the production possibility curve.

(उत्पादन सम्भाव्यता वक्र खिच्नुहोस् ।)

Differentiate between micro static and comparative micro static analysis.

(सूक्ष्म स्थिर र तुलनात्मक सूक्ष्म स्थिर विश्लेषण बिच भिन्नता छुट्ट्याउनुहोस् ।)

Explain the economics tools that help to measure economic efficiency.

a. Complete the table and determine equilibrium price and quantity . [3.5]

b. What Will be effect on equilibrium price and quantity when demand and supply function increase to Qd'x=120-5Px and Q'sx = 40+5Px, respectively ? [3.5]

c. Compute price elasticity of demand at both equlibrium price and compare the results . [3]

Consider the demand function, \( Qd = a - bP \) and interpret the components.

Explain the factors that cause shift in supply curve.

Consider the supply function \( Qs = a + bP \) and interpret the components.

Explain the factors that cause shift in demand curve.

Write any four factors that cause rightward shifts in demand curve.

What is an economic efficiency? How can it be measured?

Consider the following table:

a. Derive linear demand and supply functions. 
b. Graph Qsx and Qdx and determine equilibrium price and quantity. 
c. Compute price elasticity of supply at movement from B to D and D to B by (i) percentage method and (ii) arc method. Which method is more appropriate and why? 
d. How do business firms use the concept of price elasticity of demand in business decision making? Explain. 

Define consumer's surplus?

Explain the scope of business economics.

State the factors causing leftward shift of supply curve of an apple farm.

(एउटा स्याउफार्मको पूर्तिवक्र बायाँतिर सर्ने कारणहरू उल्लेख गर्नुहोस् ।)

Describe the market efficiency? How is market efficiency measured by consumer surplus and producer surplus?

(बजार कुशलताको वर्णन गर्नुहोस्। उपभोक्ता बचत र उत्पादक बचतबाट बजार कुशलताको मापन कसरी गरिन्छ ?)

What is consumer surplus?

(उपभोक्ता बचत भनेको के हो ?)

Complete the following schedule if the market demand function is D = 1000 - 10P and the market supply function is S = 100 + 20P. (4+3+4+4). 

(यदि बजार मागफलन D = 1000 - 10P छ र बजार पूर्ति फलन S = 100 + 20P छ भने, दिइएको सूची पूरा गर्नुहोस्।)

a) Plot the market demand curve and the market supply curve in a figure. Show the equilibrium price and quantity both in schedule and figure.

(एउटा चित्रमा बजार मागवक्र र बजार पूर्तिवक्र खिच्नुहोस् । सूची र चित्र दुवैमा सन्तुलन मूल्य र परिमाण देखाउनुहोस् ।)

b) Calculate price elasticity of demand

(i) when price increases from 10 to 20 and,

(ii) when price decreases from 20 to 10.

(मागको मूल्यलोच गणना गर्नुहोस् (अ) जब मूल्य रु. १० बाट बढेर रु. २० हुन्छ र (आ) जब मूल्य रु. २० बाट घटेर रु. १० हुन्छ ।)

c) Calculate price elasticity of supply

(i) when price increases from 10 to 20 and,

(ii) when price decreases from 20 to 10.

(पूर्ति लोच गणना गर्नुहोस्

 (अ) जब मूल्य रु. १० बाट बढेर रु. २० हुन्छ र ,

 (आ) जब मूल्य रु. २० बाट घटेर रु. १० हुन्छ ।)

How do the tax policy, subsidy policy and price control policy of the government affect the market equilibrium?

(सरकारको कर नीति, अनुदान नीति र मूल्य नियन्त्रण नीतिले बजार सन्तुलनलाई कसरी प्रभाव पार्दछन् ।)

How is price elasticity of supply computed by arc method?

Prepare a list of uses of price elasticity of demand in taking business decisions.

Let, eXY = 4 and eAB = -0.8. Describe the nature of goods X and Y and goods A and B.

Consider the following demand schedule:

a) Compute the income elasticity of demand at movement from B to D and D to B by proportion method 

b) Compute the income elasticity of demand at midway between B and D and D and B by arc method. Why is arc method considered as more appropriate method than proportion method? 

c) How do firm use price elasticity of demand in business decision making? Explain with suitable examples.

State the relationship between TR and price elasticity of demand.

Consider the following supply schedule:

a. Compute the price elasticity of supply at movement from B to D and D to B by proportion method. 
 b. Compute the price elasticity of supply at midway between B and D and D and B by arc method. Why is arc method considered as more appropriate method than proportion method? 
c. How do firms use price elasticity of demand in business decision making? Explain with suitable examples. 

Let, \( ey(\text{mobile set}) = 2.3, ey(\text{potato}) = -0.8 \). Describe the nature of these two goods.

Write formula for calculation of elasticity of supply by using average method.

a) Demand function of Chokobite Chocolate is \( Q_d \) = 1000 - 20P and supply function of Chokobite chocolate \( Q_s \) = 100 + 40P, find equilibrium price and quantity of Chokobite chocolate. Also compute price elasticity of demand at equilibrium price.

b) Fill the following table by using the demand and supply function of Chokobite chocolate and find equilibrium price and quantity of Chokobite chocolate in table.

Aradhya's demand schedule of ice-cream is given as:

a. Calculate price elasticity of demand of ice-cream for Aaradhya when the price of ice-cream increases from Rs. 180 to Rs. 220 at both income levels Rs. 20,000 and Rs. 25,000.

b. Calculate income elasticity of demand of ice-cream for Aaradhyas income increases from Rs. 20000 to Rs. 25,000 at prices Rs. 180 and Rs. 220.

c. Compare and interpret the above results.

Define advertisement elasticity of demand.

(मागको विज्ञापन लोच परिभाषित गर्नुहोस् ।)

Explain the degrees of elasticity of supply.

(पूर्तिलोचका श्रेणीहरुको व्याख्या गर्नुहोस् ।)

State the areas of uses of the price elasticity of demand.

(मागको मूल्यलोच प्रयोग हुने क्षेत्रहरु उल्लेख गर्नुहोस् ।)

Explain the types of price elasticity of supply.

(पूर्तिलोचका प्रकारहरु व्याख्या गर्नुहोस् ।)

Write any four assumptions of indifference curve.

 Let a consumer selects two goods, i.e. x and y for consumption having prices of Rs. 1600 and Rs. 800 respectively and fixed income with Rs. 16,000.a. Derive budget line and determine equilibrium point when he allocates entire budget equally on two goods.b. Let, price of x good falls to Rs, 800. Derive the two budget line and determine new equilibrium point when he spends Rs. 6,400 on x good and Rs. 9,600 on y good.c. Derive price demand curve for x good. 

State the condition for equilibrium under cardinal approach.

Explain the income effect for inferior and normal goods.

Write any four assumptions of cardinal approach.

Explain the price effect for normal substitutes. How can it be decomposed into income and substitution effects? Explain.

List out any four assumptions of indifference curve analysis.

What is price effect? How can it be decomposed into income effect and substitution effect?

Derive budget line if budget of consumer is Rs. 10000, Price of good X is Rs. 100 and price of good Y is Rs. 200.

Explain the consumer's equilibrium by using indifference curve approach.

Why do indifference curves not intersect each other?

(तटस्थ वक्ररेखाहरू एकआपसमा किन काटिदैनन् ?)

Explain the consumer's equilibrium in cardinal approach. Price apple is Rs.20, price of banana is Rs. 10 and the consumer spends whole income Rs.110 on apple and banana. Find the consumer's equilibrium when the marginal utilities (MU) of apple and banana are as follows: 

(संख्यात्मक उपयोगिता विश्लेषण विधिमा उपभोक्ता सन्तुलनको व्याख्या गर्नुहोस् । स्याउको मूल्य रु.२० छ, केराको मूल्य रु. १० छ र उपभोक्ताले आफ्नो सबै आम्दानी रु.११० स्याउ र केरामा खर्च गर्दछ । स्याउ र केराको सिमान्त उपयोगिताहरु निम्नानुसार भएको अवस्थामा उपभोक्ताको सन्तुलन पत्ता लगाउनुहोस् ।)

Define the marginal rate of substitution.

(सिमान्त प्रतिस्थापन दरलाई परिभाषित गर्नुहोस् ।)

Explain the consumer's equilibrium in indifference curve analysis approach.

(तटस्थ वक्ररेखा विश्लेषण विधिमा उपभोक्ताको सन्तुलन व्याख्या गर्नुहोस् ।)

What are the causes for the operation of law of increasing returns to scale?

Using IQ map and Iso-cost line, explain the concept of least cost combination of two inputs under given total cost outlay. What will be the effect on output when total cost outlay changes? [10+5]

Prepare a list of assumptions of isoquant.

Consider the following production schedule:

a. Compute AP_L  and MP_L

b. Graph TP_L  AP_L  and MP_L  and explain three stages of production with proper reasons

What are the causes for the operation of the law of increasing returns?

Describe the significance of production function in business decision-making. How do firms achieve optimal employment of two variable inputs? Explain.

Let \( c = \text{Rs. } 2000, r = \text{Rs. } 50, w = \text{Rs. } 40 \). Determine the slope of iso-cost line.

Let, production function, \( Q = 14L + 7L^2 - L^3 \). Compute TP, AP and MP, graph them and explain three stages of production with proper reasons.

What is production function?

Explain the laws of returns to scale.

Derive isocost line when total cost outlay is Rs.4000, wage rate is Rs.200 and rental rate of capital is Rs.400.

(कुललागत खर्च रु.४०००, ज्यालादर रु.२०० र पूँजीको भाडादर रु.४०० भएको अवस्थामा सम लागत रेखा व्युत्पन्न गर्नुहोस् ।)

Write the formula for calculation of marginal product of labor\( (\text{MP}_\text{L}) \) and average product of labor \( (\text{AP}_\text{L}) \).

(श्रमको सिमान्त उत्पादन र औसत उत्पादन गणना गर्ने सूत्र लेख्नुहोस् ।)

The production function of Langtang Cheese Pvt. Ltd. is \( Q = 4L + 11L^2 - L^3 \). Complete the following table.

(लाङटाङ चिज प्रा.लि.को उत्पादन फलन \( Q = 4L + 11L^2 - L^3 \) छ । दिइएको तालिका पूरा गर्नुहोस् ।)

a) Analyze the three stages of the Law of Variable proportion for Langtang Cheese Pvt. Ltd. by using above data.

(माथिको तथ्याङ्क प्रयोग गरी लाङटाङ चिज प्रा.लि.का लागि परिवर्तनशील अनुपातको नियमका तीनवटा चरणहरुको विश्लेषण गर्नुहोस् ।)

b) Market price of cheese is Rs.1000 per kg. and the wage rate is Rs 34,000 per month. Using data of the second stage of the Law of Variable proportion, find the equilibrium level of labour and output of the cheese. 

(चिजको बजार मूल्य प्रति केजी रु.१००० छ, र ज्याला दर प्रति महिना रु.३४००० छ । परिवर्तनशील अनुपातको नियमको दोस्रो चरणको तथ्याङ्क प्रयोगगरी, श्रम र चिजको उत्पादनको सन्तुलनस्तर पत्ता लगाउनुहोस् ।)

State the Cobb-Douglas production.

(कब-डग्लस उत्पादन फलन उल्लेख गर्नुहोस् ।)

Consider the following two production preference schedules of a producer:

(उत्पादकका निम्न दूईवटा उत्पादन प्राथमिकता सूचीहरुमा ध्यान दिनुहोस् :)

a. Compute total cost for each combination of capital and labor if price of use of capital is Rs.10, price of labor is Rs.5 and the producer has total cost outlay Rs.400 and identify the least cost combination. 

(यदि पूँजीको प्रयोगको मूल्य रु. १० श्रमको मूल्य रु. ५ छ र उत्पादकसँग कूल लागत खर्च रु. ४०० छ भने पूँजी र श्रमको हरेक संयोगको कूल लागत गणना गर्नुहोस् र न्यूनतम लागत संयोग पत्ता लगाउनुहोस्।)

b. Sketch the isoquants \( \text{IQ}_1 and \text{IQ}_2 \) by using schedule 1 and schedule 2 respectively and sketch the isocost line also. Identify the optimal combination of capital and labor in figure.

(सूचि १ र सूचि २ प्रयोग गरेर सम उत्पादन रेखाहरू क्रमशः \( \text{IQ}_1 र \text{IQ}_2 \) खिच्नुहोस् तथा सम लागत रेखा समेत खिच्नुहोस् । चित्रमा पूँजी र श्रमको अधिकतम संयोग पत्ता लगाउनुहोस् ।)

Write any two examples of explicit costs.

How is economies of scope measured?

Let Cost function TC = 50+6Q², Revenue function TR = 100Q - 4Q².a. Compute TFC, TVC, TC, TR and profit at output range of 0 to 10 units. [5]b. Using schedules, explain the behaviour of TFC, TVC and TC with proper reasons. [5]c. Graph TR, TC and profit, and explain TR- TC approach of firm equilibrium. [5]

What are the characteristics of LAC?

Write any four examples of accounting cost.

Write any two relationships between price elasticity of demand and marginal revenue.

Consider the following cost schedule:

a) Graph AFC, AVC and AC and explain their behavior. 

b) Is the trend of AC is influenced by law of variable proportions? Explain

Why is LAC - U shaped?

Write any four examples of explicit costs.

How is degree of economies of scope computed?

Let revenue function, \( TR = 100Q - Q^2 \), cost function, \( TC = 50 + 6Q^2 \)

a) Compute\( TR \), \( TC \) and profit \( \pi \) at the output range of 0 to 10 units.

b) Graph \( TR \), \( TC \) and \( \pi \) and explain profit maximization goal of the firm.

Consider the following cost schedule:

a) Graph TFC,TVC,and TC and explain their behavior . 

b) Is the trend of TC or TVC is influenced by the law of variable proportions ? Explain . 

Let, \( C_A = \text{Rs. } 400000, C_B = \text{Rs. } 200000, C_{A+B} = \text{Rs. } 500000 \). Determine degree of economies of scope.

Prepare a list of examples of explicit costs.

State the relationship between price elasticity of demand and marginal revenue.

Consider the following cost schedule:

 a. Compute TC, AFC, AVC, AC and MC at TFC = Rs. 200.
 b. Graph AC and MC and describe their relationship.

Differentiate between economic cost and accounting cost.

Complete the following table, Graph AR and MR and explain the relation between AR and MR curve.

A firm's average revenue is Rs.200, average cost is Rs.220 and average variable cost is Rs.175. The firm, suffering from loss, should shut down or stay in business in short run.

(एउटा फर्मको औसत आय रु.२००, औसत लागत रु.२२० र औसत परिवर्तनशील लागत रु.१७५ छ । घाटामा रहेको उक्तफर्म अल्पकालमा बन्द गर्नु पर्छ वा संचालनमा रहनुपर्छ ?)

Make a list of internal diseconomies of scale.

(स्तरको आन्तरिक वैमितव्ययिताहरुको सूचीबनाउनुहोस् ।)

Why do some long run average cost curves are U-shaped but some are L-shaped? Differentiate with the reasons.

(किनकुनै दीर्घकालिन औसत लागतवक्र U आकारका हुन्छन् तरकुनै दीर्घकालिनऔसत लागतबक्र L आकारका हुन्छन् ? कारणहरु सहित छुट्ट्याउनुहोस् ।)

Complete the following table. Graph total revenue, average revenue and marginal revenue curves. Explain the relation of total revenue and marginal revenue with price elasticity of demand.

(दिइएको तालिका पूरा गर्नुहोस् । कुलआय, औसतआय र सिमान्त आय वक्रहरूको ग्राफ बनाउनुहोस् । मागको मूल्यलोचसँग कुल आय र सिमान्त आयको सम्बन्ध व्याख्या गर्नुहोस् ।)

Differentiate between explicit cost and implicit cost.

(व्यक्त लागत र अव्यक्त लागत बिच भिन्नता छुट्ट्याउनुहोस् ।)

Calculate the degree of economies of scope when total cost of production of goods A and B separately are\( C_A = \text{Rs. } 50000, C_B = \text{Rs. } 60000 \) respectively but total cost for producing both A and B is \( C_{A+B} = \text{Rs. } 100000 \) while producing jointly.

(वस्तु A र B छुट्टा छुट्टै उत्पादनगर्दा क्रमशः\( C_A = \text{रु.} \text{५००००} \) र \( C_B = \text{रु.} \text{६००००} \) पर्छ तर दुबै वस्तु संयुक्त रुपमा उत्पादन गर्दा \( C_{A+B} = \text{रु.} \text{१०००००} \) पर्दछ भने क्षेत्रको मितव्ययिताको श्रेणी गणना गर्नुहोस् ।)

Complete the following table and explain the relation between average cost and marginal cost. 

(दिइएको तालिका पूरा गर्नुहोस् तथा औसत लागत र सिमान्त लागत बिचको सम्बन्ध व्याख्या गर्नुहोस् ।)

Write the formula for pricing the product under cost - plus pricing.

 Describe the characteristics of oligopoly. How are the price and the output determined under cartel? 

Mention the types of oligopoly.

Derive shortrun supply curve of a competitive firm.

How are the price and the output determined under monopoly in short run? Is monopoly price is always higher than competitive price? Give reasons.

Prepare a list of characteristics of oligopoly.

How is the price determined under "joint profit maximization cartel"? Explain.

Why do firms involve in cartel?

Explain the concept of incremental cost pricing with suitable examples.

State the characteristics of monopolistic competition. How are the price and the output determined under it in short-run? In what respects, monopolistic competition differ from perfect competition?

What is meant by predatory pricing?

Calculate the equilibrium level of output of the firm when marginal revenue is MR = 300 - 0.002Q and marginal cost is MC = 20 + 0.0008Q

How price and output is determined under joint profit maximization goal of cartel?

What is monopoly? How the price and output is determined under it?

Write the conditions for equilibrium of a firm in monopolistic market in short run.

(अल्पकालमा एकाधिकारात्मक बजारको फर्म सन्तुलनका शर्तहरु लेख्नुहोस् ।)

How does a cartel determine the price to maximize the joint profit? Evaluate the advantages and disadvantages of cartel for consumers and producers.

(संयुक्त नाफा अधिकतम गर्नका लागि कार्टेलले कसरी मूल्य निर्धारण गर्दछ ? उपभोक्ताहरू र उत्पादकहरूको लागि कार्टेलका फाइदाहरू र बेफाइदाहरू मूल्याङ्कन गर्नुहोस् ।)

Write any four features of perfect competition market.

(पूर्ण प्रतिस्पर्धा बजारका कुनै चारवटा विशेषताहरु लेख्नुहोस् ।)

How does a monopoly firm determine price in short run? Explain.

(अल्पकालमा एउटा एकाधिकार फर्मले मूल्य निर्धारण कसरी गर्दछ ? व्याख्या गर्नुहोस् ।)

Let Q = 14L + 7L² - L³. Compute VMPL at P = Rs. 10 and L = 5 units.

Economic rent is the surplus of actual earnings over transfer earnings. Explain with suitable examples.

Identify the factors that cause wage differentials and explain them. 

\( \begin{matrix} 1 & 2 & 3 \\ 2 & 5 & 1 \\ 9 & 3 & 2 \end{matrix} \)

What are the determinants of supply of loanable funds?

What are the factors that cause interest rate differentials?

Explain the concept of accounting profit and economic profit with suitable examples.

Define value of marginal productivity of labour.

What is economic rent? How is it determined?

What are the causes for interest rate differentials?

What are the motives of demand for money according to Keynes? Explain.

What are the dynamic changes to arise the profit?

Explain the liquidity preference theory of interest. What are its criticisms?

Give examples of demand-increasing innovations in Innovation Theory of Profit.

(नाफाको नवप्रवर्तन सिद्धान्त अनुसार मागविस्तार नवप्रवर्तनका उदाहरणहरु दिनुहोस् ।)

Critically analyze the Loanable Fund Theory of interest.

(ब्याजको ऋण योग्य कोषको सिद्धान्तको आलोचनात्मक विश्लेषण गर्नुहोस् ।)

What is the meaning of rent?

(लगानको अर्थ के हुन्छ ?)

Critically analyze the Marginal Productivity Theory of Wages.

(ज्यालाको सीमान्त उत्पादकत्वको सिद्धान्तको आलोचनात्मक विश्लेषण गर्नुहोस् ।)