B. Com. (Pass) 1st Year
Question: 1. What is production possibility Curve? Explain how this illustrates the concepts of scarcity, choice and opportunity cost and solves the problem of allocation of resources. 6,6,8 Marks
Question: 2. (a) Outline the main determinants of elasticity of demand and supply.
(b) Given the following data, calculate and compare the elasticity for the three commodities X, Y and z.
Commodity Original Price New Price Original Demand New Demand
X 10 11 50 45
Y 02 12 10 08
Z 90 92 40 35
(c) Two straight line demand curves intersect at a given price. Prove that the steeper curve has the lower elasticity at the point of intersection. 8,6,6 Marks
Question: 3. (a) Show that the Price Effect is a combination of income effect and substitution effect with the help of indifference curve analysis.
(b) In which case is the negative income effect greater than substitution effect? 14, 6 Marks
Question: 4. (a) Explain the law of Diminishing Returns. Why does this law operate?
(b) Why are the Short run and long run Average cost curves U-Shaped 8, 12 Marks
Question: 5. (a) Describe the assumption on which the theory of perfect competition is based.
(b) Distinguish between short run and long run equilibrium of the firm under perfect competition.
8, 12 Marks
Question: 6. (a) Why does government fix maximum or minimum level of prices? How do they affect price and output level? Explain with the help of diagram.
(b) Explain how can government stablise incomes of the farmers. 12, 8 Marks
Question: 7. Describe the determination of equilibrium price and output under monopoly. Is there any allocative inefficiency found under monopoly? 14,6 Marks
Question: 8. Write short notes on any two of the following:
(1) Consumer’s Surplus
(2) Relation between short run Average cost curves and long run Average cost Curves.
(3) Returns to a factor and Returns to scale 10, 10 Marks
BY RAJIV BHATIA