Microeconomics for Business

Business economics normative in character. Why?

How is price elasticity of supply computed by arc method?

Write any two examples of explicit costs.

How is economies of scope measured?

Write any four assumptions of indifference curve.

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

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

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

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

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

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

Explain the economics tools that help to measure economic efficiency.

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

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]

Identify the factors that cause wage differentials and explain them. 

 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. 

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]

18. Describe the characteristics of oligopoly. How are the price and the output determined under cartel? [5+10]

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]