B.COM I Economics

INSTRUCTIONS
Attempt any FIVE questions. Selecting TWO from Micro Economics, TWO from Macro Economics and ONE from Economic System. Marks are indicated against each questions.

MICRO ECONOMICS

Q.1. “The change in Relative Prices alone leads to SUBSTITUTION EFFECT real income of the Consumer remaining the same”. Explain with the help of indifference Curves Technique. (20)

Q.2. What is “Least Cost Combination of factors”? How the Least Cost Factor Combination is achieved in terms of ISO QUANT graph? Explain. (20)

Q.3 (a). Differentiate between PURE COMPETITION and PERFECT COMPETITION. (08)
Q.3 (b). Under what conditions a firm under PERFECT COMPETITION stops its production. Explain with the help of a suitable diagram. (12)

Q.4. Write short notes on any TWO of the following. (20)
1. Types of Elasticity of Demand
2. Economics of Scale
3. Micro and Macro Economics
4. Law of Variable Proportions

MACRO ECONOMICS

Q.5 (a). What is CONSUMPTION FUNCTION? Distinguish between Average Propensity to consume (APC)and Marginal Propensity to consume (MPC). (12)
Q.5 (b). Explain the importance of Consumption Function in Macro Economic Analysis. (08)

Q.6. How Equilibrium Level of Income is determined? In this Equilibrium achieved only at full employment level? Discuss. (20)

Q.7 (a). Explain the concept of MULTIPLIER with a numerical example. (12)
Q.7 (b). How each of the following will later the Multiplier. (08)
i. An increase in Average Propensity to Consume (APC)
ii. An increase in Marginal Propensity to Save (MPS).
iii. An increase in Marginal Propensity to Consume (MPC)

Q.8. Write short notes on any TWO of the following: (20)
1. Nominal GNP and Real GNP
2. Average and Marginal Propensity to save (APS & MPS)
3. ACCELERATION PRINCIPLE
4. Marginal Efficiency of Capital (MEC)

ECONOMIC SYSTEM

Q.9. How does Price Mechanism help in performing the basic functions of an Economic System under Free Enterprise Economy? Discuss. (20)

Q.10. Describe the objectives of Economic System of Islam. (20)