University of Delhi 2008-1st Year B.Com BCom – Principles of Economics (External/Correspondence) - Question Paper

B. Com Ist Year –2008
Paper IV
Principles of Economics
(External/Correspondence)


Time allowed three Hours Maximum Marks: 100

Attempt 5 ques. in all. All ques. carry equal marks.

Q.1
a. If demand function is provided by Qd =50-0.5 P and supply function is provided by
Qd =-10 +P , then obtain out equilibrium volume.

b. Of 2 intersecting straight lie 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?

Q. two
a. What shall be the shapes of indifference curves in the subsequent situations:
(i) If the 2 goods are perfect substitutes.
(ii) If the 2 goods are perfect complements.
(iii) If 1 of the good is absolute necessity
Draw a diagram to support your ans .

b. Show that the
Price effect = Substitution effect + Income effect for:
A Normal good
A giffen good

Q. three 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?

Q.4 Show the equilibrium position of affirms in short run in perfect competition indicating its equilibrium price/ output and super-normal profits. What will happen to industrys’ SS curve, if many firms join the industry? Show the long run equilibrium of the firm.


Q.5 Show the profit maximizing equilibrium of a monopoly firm. How does a monopoly maximize its profits by selling in various markets ?

Q.6 elaborate the assumptions of the theory of monopolistic competition? Ho does a firm in monopolistic competition achieve equilibrium in SR and LR? Show the excess capacity of the firm. Is LR equilibrium inefficient?



Q.7 Analytically discuss 3 situations in which market system fails to allocate resources efficiently. What type and quantum of taxes you would propose on
a. Households
b. Industrial units
to abate the pollution in the river flowing around the city?

Q.8 discuss the concept of Economic rent. Why does the SS curve of labour bend backward beyond a particular wage rate?

Q.9.Why is the protection of industries considered crucial in a developing economy?

Q 10. Write short notes on any two:
a. Production possibility boundary
b. Public goods
c. Entry barriers
d. Law of variable proportion

Earning:   Approval pending.