University of Delhi 2008 B.Com PRINCIPLES OF ECONOMICS - Question Paper

B.COM./I/NS
PAPER IV--PRINCIPLES OF ECONOMICS
Attempt any 5 ques..
all ques. carry equal marks(20 per ques)

Q1.(a)if demand function is provided by Qd=50-0.5P and supply function is Qs=-10 + P, then obtain out
equilibrium price and equilibrium quantity?
(b)of 2 intersecting straight line demand curves, show that the steeper has lower elasticity?
(c)what is the relationship ranging from the short run and long run consumer demand curve of a durable good?

Q2.(a)What shall be shape of the indifference curves:
(i) if 2 goods perfect substitutes?
(ii) if 2 goods perfect complements?
(iii) if 1 of the goods is absolute necessity?
draw diagrams to support your answer?

(b).show that the
price effect=substitution effect+income effect for:
(i)normal good
(ii)giffen good

Q3.What is the relationship ranging from short run avg. cost curve(SRAC) and long run avg. cost curve(LRAC)? how does improvement in the level of technology affect the cost curves?

Q4.show the equilibrium position of a firm in short run in perfect competion indicating its equilibrium price/output and super-normal profits. what will happen to industry's SS curves, if many firms join the industry? show the long run equilibrium of the firm in question?

Q5.Show the profit maximizing equilibrium of a monopoly firm. how does a monopoly maximize its profits by selling in various markets?

Q6.What are the assumptions of the theory of monopolistic competition? how does a firm in monopolistic competition achieve equilibrium in SR and LR? Show the excess capacity of the firm. is long run equilibrium inefficient?

Q7.Analytically discuss 3 situations in which market system fails to allocate resources efficiently. what type and quantum of taxes you would propose on (i) house owners/households,
(ii) industrial units to abate the pollution in the river flowing around the city?

Q8.Explain the concept of economic rent. why does the SS curve of labour bend backward beyond a particular wage rate?

Q9.Why is the protection of industries considered crucial in a developing economy? briefly define the role played by GATT. WTO in global commercial policies?

Q10.Write short notes on any 2 of the following:
(i) production possibility boundary.
(ii)public goods.
(iii)entry barriers.
(iv)law of variable proportions.

Earning:   Approval pending.