University of Delhi 2007-1st Year B.Com BCom – Principles of Economics - Question Paper

B. Com Ist Year –2007
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 What is Production possibility curve? How is it used to discuss the central issues of an economy?

Q. two
a. Explain the meaning of price elasticity of demand.
b. If 2 straight line demand curves intersect every other, which of them will have higher elasticity of demand at the point of intersection?

c. Explain cross- elasticity of demand and income elasticity of demand.

Q. three Using suitable diagrams, discuss how the burden f excise duty varies on buyers and sellers on the basis of elasticity of demand for a provided elasticity of supply.

Q.4
a. What is meant by indifference curves ? discuss why it is generally convex to origin?
b. Explain equilibrium of a consumer with the help of a indifference curves technique.

Q.5
a. Distinguish ranging from Diminishing returns to a factor and diminishing returns to scale.
b. Why is the SR AC curve U-shaped?


Q.6 discuss the term economic rent according to Modern Theory Rent. Why economic rent arises? Under what conditions a factor of production does not earn economic rent? Use diagrams

Q.7 discuss how international trade takes place when there are:
a. Absolute cost differences and
b. Comparative cost differences
Also discuss the criticism of the theory of Comparative cost differences?

Q 8. How do equilibrium price and equilibrium volume respond to modifications in prices of raw materials and change in technology? discuss Diagrammatically.

Earning:   Approval pending.