Microeconomics for Business

bbsfirst year

This course covers the fundamentals of microeconomics, including market equilibrium, demand and supply elasticity, consumer behavior, production theory, cost and revenue analysis, product pricing, and factor pricing.

Chapter Wise Notes Question Banks Syllabus Chapter Wise Questions

Faculty of Management

2077

Bachelor of Business Studies

Microeconomics for Business

MGT 207

Full Marks: 100

Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.

"Section A"

Attempt All Questions .

[10*2=20]

What are the uses of microeconomics?

Define consumer's surplus?

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

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.

What is production function?

Differentiate between economic cost and accounting cost.

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 $MC = 20 + 0.0008Q$

What are the dynamic changes to arise the profit?

10.

Write any four principles of economics.

"Section B"

Descriptive Answer Questions. Attempt any FIVE questions.

[5*10=50 ]

Explain the scope of business economics.

a) Demand function of Chokobite Chocolate is $ Q_d $ $Q_d = 1000 - 20P$ and supply function of Chokobite chocolate $ Q_s $ $Q_s = 100 + 40P$ , 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.

Price	Quantity Demanded (Qd)	Quantity Supplied (Qs)	Surplus/shortage
5
10
15
20
25

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

Explain the laws of returns to scale.

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

Quantity Q	Price (P)	TR	AR	MR
0	22
1	20
2	18
3	16
4	14
5	12
6	10
7	8

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

"Section C"

Analytical Answer Questions. Attempt any TWO questions.

[2*15=30 ]

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

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

Price (RS)	Quantity Demanded (Income = Rs. 20000)	Quantity Demanded (Income = Rs. 25000)
180	80	100
220	60	80

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.

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