University of Delhi 2008 B.Com Pass-Principles of Economics IV - Question Paper

B. Com Ist Year –2008
Paper IV
Principles of Economics
(Regular)


Time allowed three Hours Maximum Marks: 100

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

Q.1 discuss the effect on equilibrium price and volume of colour television when
I. Income of consumers increases and
II. Technological improvements decrease cost of production.

Use suitable diagrams

(b) obtain out equilibrium market price and volume for the subsequent demand and supply schedules:
Demand schedule: P=100-2x
Supply schedule: P=10+ 2x

Q. two
a. Distinguish ranging from cross elasticity of demand and price elasticity of demand
b. Calculate the price elasticity when demand of a commodity x increases from 90 to 130 when price of that commodity is reduced from 30 to 25. Use avg. method.
c. Two straight line demand curves intersect at a provided price. Prove that the steeper curve has the lower elasticity of demand at the point of intersection.

Q. 3
a. Using marginal utility concept, discuss the condition for maximizing utility when a consumer consumes more than 1 commodity
b. Using improper diagram define the concept of consumer surplus

Q.4
a. Draw and discuss the shapes of indifference curves in the subsequent situations:
(i) x and y are perfect substitutes.
(ii) x and y are perfect complements.
(iii) X is vegetable and y is meat and the consumer is a strict vegetarian

b. Can 2 indifference curve intersect every other?

Q.5
a. Discuss the relationship ranging from total product (TP), Marginal Product (MP) and avg. Product of a variable factor
b. Explain the lowest cost method of producing a provided amount of output
Q.6
a. How does a competitive market ensure super –normal profit to be zero for a firm in the long run?
b. State the concept of Game theory?

Q.7 define the determination of equilibrium price and output under monopoly. Is there any allocative inefficiency obtained under monopoly?

Q.8 ans any two:
a. What are the option methods used by a government to control pollution creating firms?
b. Economic rent is related to inelasticity of supply of a factor. what are
c. What are the arguments provided for protectionism?

Earning:   Approval pending.