Microeconomics Model Question-1

Level:-BBA-BI, 1^stsem.                                            Full Marks -100

Faculty:-Management                                              Pass Marks -40

Sub:- Introductory Microeconomics                  Time:-3 : 00 hrs.

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

Attempt All Questions

Group – A

Answer the following questions briefly.                      (10 x 2=20)

1. Define micro-statics.

2. Given the demand function of a commodity as, `Q=50–3P`, find out the quantity demanded at Rs. 10.

3. Define price elasticity of demand.

4. Why does the budget line shift to the right and the left?

5. What is Iso-quant?

6. Given the cost function as; `TC=10+2Q-0.5Q^2`, find out  MC at 2 units of output.

7. In which condition does a firm leave the industry in the short run under perfect market structure?

8.  Define the indifference map with its figure.

9.  What do you mean by the price discrimination?

10. What do you mean by bilateral monopoly?

Group –B

Answer any six of the following questions.               (10 x 6 = 60)

11.What is microeconomics? Explain the importance of microeconomics in business decision making.

12.Suppose that the weekly market demand and supply functions for fish in kg. in Dhangadhi are `Qd=9000–10p` and     `Q<sub>s</sub>=3000+20p`.

a. What are the equilibrium price and quantity of fish?

b. What is the demand and supply situation if the price of fish increases by Rs. 20 per kg.

c. Determine price elasticity of demand at the equilibrium price and interpret the result.

13.Separate income and substitution effects from price effect in case of normal and inferior goods.

14.Explain the law of variable proportion with its three stages. Which stage of production is relevant for a rational producer?

15.What are the features of monopolistic competition? Explain how the price and output are determined under monopolistic competition in the long run.

16.Find the profit maximizing output and maximum profit from cost function and price function `TC=50+6Q^2` And `P=100-4Q`, also find MC & MR.

17.What is brain drain? Discuss the causes and consequences of brain drain in context of Nepal.

Group – C

18.Read the situation given below and answer the questions that follow. 

There is a famous bread producing firm named "Ajanta Bread Udhyog" in Dhangadhi-8. Every day it supplies dozens of bread to the most of tea-stalls and grocery shops in Dhangadhi city. It could sell bread at an equilibrium price Rs. 80/- per dozen. Given the demand for bread, its weekly revenue was Rs.24,000/- in the last a few months. However, due to ongoing virus-caused pandemic of covid-19, the most of bread-consumers have recently postponed demand for bread for breakfast at tea-stalls as they are scared of the transmission of virus and want to be away from the grip of deadly virus. Consequently, the demand for bread has adversely influenced and per dozen price of bread has fallen by Rs.20/- these days, resulting a fall in its revenue by Rs.7200/- in each weekend.

 

Questions:-                                                                        (4 x 5 = 20)

a   1. Calculate the equilibrium quantity of bread sold at per dozen price Rs. 80/- and present the result in a diagrammatic form.

b   2. What is the equilibrium price and quantity demanded of bread after the demand postponed by some consumers?

c.   3. Explain the causes of shift in demand curve with reference to the above situation.

d   4. What would happen to the equilibrium price and quantity of bread if it were taken as a necessary commodity? Explain with figure. 

The End