B.Com-COMMERCE 1st Sem BUSINESS ECONOMICS(Bangalore University, Bangalore-2008)

I Semester B.Com. Examination, May 2008
COMMERCE
Business Economics - I

Time : 3 Hours Max. Marks : 90

SECTION - A

Answer any ten sub-questions from the following. Each sub-question carries two marks : (10x2=20)

1. a) What do you mean by Business Economics ?
b) What is Consumer Surplus ?
c) Differentiate Cardinal and Ordinal Utility.
d) What is Veblen effect ?
e) What is producer’s equilibrium ?
f) What do you mean by Delphi Method ?
g) What do you mean by money cost and real cost ?
h) What is cross elasticity of demand ?
i) Give the meaning of price line.
j) What are internal economics of sale ?
k) What is meant by opportunity cost ?
l) Give the meaning of increase in supply and contraction of supply.

SECTION - B

Answer any five questions. Each question carries five marks : (5x5=25)

2. Explain the various types of price elasticity of demand.

3. With the help of the following data, adopting total outlay method, find out the price elasticity of demand. Show the graphic representation.

Price per unit (in Rs.) Quantity demanded (in units)

a) 10.00 1,000
9.00 2,000
8.00 3,000

b) 10.00 900
9.00 1,000
8.00 1,125

c) 10.00 1,000
9.00 1,050
8.00 1,000

4. Write a note on consumer surplus.

5. Who is a Business Economist ? Discuss the role of Business Economist in a firm.

6. A cement factory reports the following sales of cement as shown against various years. Estimate the sales for the next two years i.e. for 2007 and 2008 with the help of Least Square Method.

Year : 2002 2003 2004 2005 2006
Sales : 90 80 70 80 60
(in tones)
(in 000’s)

7. What are the determinants of demand ?

8. What is consumer sovereignty ? Write its limitations.

9. With the help of the data given below, calculate TFC, TVC, AC, AVC and MC.

Output (in units) 0 1 2 3 4 5 6 7 8
Total Cost (in Rs) 500 580 650 690 750 720 830 920 1,150

SECTION - C

Answer any three questions from the following. Each question carries fifteen marks : (3x15=45)

10. Explain the Law of Equi-Marginal Utility with the help of table and diagram along with its limitations.

11. What are economies of scale ? Explain internal and external economies of large scale production.

12. Define indifference curves. Explain how the consumer reaches equilibrium with the help of indifference curves.

13. What is an elasticity of demand ? Explain the various factors that determine the elasticity of demand.

14. Explain the scope of Business Economics.