IMPORTANT QUESTIONS OF MICRO ( BUSINESS ECONOMICS)

u   IMPORTANT QUESTIONS FOR BUSINESS ECONOMICS

u   MICRO ECONOMICS

u   SECTION A

u   SYLLABUS FOR SECTION A

I.        THEORY OF DEMAND

II.        PRICE ELASTICITY

III.        CONSUMER BEHAVIOR

IV.        INDIFFERENCE CURVE

V.        THEORY OF PRODUCTION

VI.        THEORY OF COST

METHOD OF ATTEMPTING THE PAPER

I.        ALLOT EACH QUESTION 35 MINUTES

II.        AND 35 MINUTES TO SHORT QUESTIONS

III.        WRITE YOUR ROLL NUMBER ACCURATELY

IV.        QUESTION NUMBER ACCURATELY

u   QUESTIONS FROM SECTION A

v QUESTION  WHAT DO YOU MEAN BY DEMAND. EXPLAIN THE LAW OF DEMAND WITH SIGNIFICANCE.? OR

v  EXPLAIN THE LAW OF DEMAND WITH EXCEPTIONS?

o    ANSWER

•               MEANING OF DEMAND

•               LAW OF DEMAND

•               ASSUMPTIONS

•               EXPLANATION: INDIVIDUAL DEMAND CURVE AND MARKET DEMAND CURVE

•               EXCEPTIONS

•               SIGNIFICANCE IF ASKED IN QUESTION

v   Q. EXPLAIN VARIOUS METHODS TO MEASURE ELASTICITY OF DEMAND

v   ANSWER:-

o    MEANING OF ELASTICITY,PRICE ELASTICITY

o    DEGREES VERY BRIEF

o    METHODS TO MEASURE ELASTICITY OF DEMAND

v   DISCUSS THE EQUI MARGINAL UTILITY APPROACH  OR EXPLAIN THE LAW OF EQUI MARGINAL UTILITY APPROACH

v   ANSWER:-

•                  MEANING OF EQUI MARGINAL UTILITY AND DEFINITION

•                  ASSUMPTIONS

•                  EXPLANATION WITH PROPER DIAGRAMS

•                  CRITICISM

v   QUESTION DISCUSS THE LAW OF DIMINISHING MARGINAL UTILITY

v   ANSWER:-

•                  MEANING OF MARGINAL UTILITY ,DIMINISHING MARGINAL UTILITY AND DEFINITION OF DMU

•                  ASSUMPTIONS

•                  EXPLANATION

•                  EXCEPTIONS

•                  CRITICISM

v   EXPLAIN THE LAW OF VARIABLE PROPORTIONS?

v   ANSWER:-

•                  MEANING OF SHORT RUN,GENERAL MEANING OF LAW OF VARIABLE PROPORTIONS AND DEFINITION

•                  EXPLANATION:

•               TABLE

•               DIAGRAM

•               RATIONAL DECISION

v   QUESTION EXPLAIN THE LAW OF RETURNS TO SCALE

v   ANSWER:-

•                  MEANING OF LONG PERIOD

•                  MEANING OF RETURNS TO SCALE

•                  TABLE

•                  EXPLANATION

v   QUESTION EXPLAIN THE SHORT RUN AND LONG RUN THEORY OF COST

•                  TOTAL COST

•                  SHORT RUN COST

•                  LONG RUN COST

v  QUESTION WHY THE SHORT RUN COST CURVE ARE U SHAPED

v  ANSWER ALONG WITH REASONS

v   QUESTION EXPLAIN THE RELATIONSHIP BETWEEN AC AND MC

•                  MEANING OF TC,AC AND MC COST

•                  TABLE

•                  RELATIONSHIP BETWEEN AC AND MC

v   QUESTION EXPLAIN THE CONSUMER ‘ EQUILIBRIUM WITH THE HELP OF INDIFFERENCE CURVE OR ORDINAL UTILITY APPROACH?

•               MEANING OF CONSUMER’S EQUILIBRIUM

•               ASSUMPTIONS

•               EXPLANATION OF CONDITIONS OF EQUILIBRIUM WITH PROPER DIAGRAMS

v   QUESTION  EXPLAIN PRICE EFFECT IS A COMBINATION OF INCOME AND SUBSTITUTION EFFECT ?

•         INCOME EFFECT

•         POSITIVE

•         NEGATIVE

•         SUBSTITUTION EFFECT

•         PRICE EFFECT

v   SHORT QUESTIONS FROM SECTION A

v   EXPLAIN OR DEFINE THE FOLLOWING

1. DEMAND
2. LAW OF DEMAND
3. EXTENSION AND INCREASE IN DEMAND
4. CONTRACTION AND DECREASE IN DEMAND
5. TYPES OF DEMAND
6. INCOME ELASTICITY
7. CROSS ELASTICITY
8. PRODUCTION FUNCTION
9. SHAPE OF MODERN COST CURVE
10. INDIFFERENCE CURVE
11. REVEALED PREFERENCE THEORY
12. WEAK ORDERING,STRONG ORDERING
13. PRICE LINE
14. INCOME EFFECT
15. PRICE CONSUMPTION CURVE
16. INCOME CONSUMPTION CURVE
17. GIFFEN GOODS
18. SUBSTITUTION EFFECT

v   QUESTIONS FROM SECTION B

v    QUESTION EXPLAIN THE PRICE OUTPUT DETERMINATION UNDER PERFECT COMPETITION. ?

v   ANSWER:-

•         MEANING OF PERFECT COMPETITION

•         FEATURES

•         PRICE DETERMINATION WITH THE HELP OF DEMAND AND SUPPLY

v   QUESTION EXPLAIN THE FIRM ‘S EQUILIBRIUM UNDER PC?

o    MEANING OF FIRM,PC

o    CONDITIONS OF EQUILIBRIUM

o    SHORT RUN

o    LONG RUN

v   QUESTION EXPLAIN THE INDUSTRY’S EQUILIBRIUM UNDER PERFECT COMPETITION ?

•                  MEANING OF INDUSTRY

•                  CONDITIONS OF EQUILIBRIUM

•                  SHORT RUN

•                  LONG RUN

v   QUESTION HOW PRICE OUTPUT DETERMINED UNDER MONOPOLY?

•               MEANING OF MONOPOLY

•               FEATURES

•               CONDITIONS

•               SHORT RUN

•               LONG RUN

v   QUESTION EXPLAIN PRICE OUTPUT DETERMINATION UNDER DISCRIMINATING MONOPOLY?

•                  MEANING OF DISCRIMINATING MONOPOLY

•                  DEGREES

•                  CONDITIONS

•                  EXPLANATION

v   QUESTION EXPLAIN THE PRICE OUTPUT DETERMINATION UNDER MONOPOLISTIC COMPETITION?

•               MEANING OF MONOPOLISTIC COMPETITION

•               FEATURES

•               SHAPE OF AR,MR AND COST CURVES

•               SHORT RUN

•               LONG RUN

v   QUESTION WHAT ARE SELLING COSTS? HOW DO THEY INFLUENCE THE FIRM OPERATING UNDER CONDITIONS OF MONOPOLISTIC COMPETITION?

•                  MEANING OF SELLING COST

•                  SHAPE OF SELLING COST

•                  ASSUMPTIONS OF SELLING COST

•                  EXPLANATION WITH DIAGRAMS

v   QUESTION EXPLAIN THE LAW OF PSYCHOLOGICAL CONSUMPTION?

•                  MEANING THE LAW OF PSYCHOLOGICAL CONSUMPTION

•                  ASSUMPTIONS

•                  PROPOSITIONS OF THE LAW

•                  IMPLICATION

•                  CRITICISM

v   QUESTION DISCUSS THE MEASUREMENT AND PROBLEMS OF CALCULATING NATIONAL INCOME.?

•                  MEANING OF NATIONAL INCOME

•                  PRODUCT METHOD

•                  EXPENDITURE METHOD

•                  INCOME METHODS

•                  PROBLEMS

v   QUESTION EXPLAIN THE MEANING OF PROPENSITY TO CONSUME. DISCUSS THE FACTORS WHICH  DETERMINE THE PROPENSITY TO CONSUME?

•                  MEANING OF CONSUMPTION,PROPENSITY TO CONSUME,AVERAGE PROPENSITY TO CONSUME,MARGINAL PROPENSITY TO CONSUME

•                  SUBJECTIVE FACTORS

•                  OBJECTIVE FACTORS

v   SHORT QUESTIONS FOR SEC B

1. DIFFERENCE BETWEEN PERFECT AND PURE COMPETITION
2. MONOPOLY POWER
3. DIFFERENTIATE BETWEEN PERFECT COMPETITION,MONOPOLY AND MONOPOLISTIC COMPETITION
4. DIFFERENCE BETWEEN COST OF PRODUCTION AND SELLING COST
5. EXCESS CAPACITY UNDER MONOPOLISTIC COMPETITION

f.      PRODUCT DIFFERENTIATION

7. MONOPOLY
8. DISCRIMINATING MONOPOLY
9. NATIONAL INCOME
10. PERSONAL INCOME
11. PRIVATE INCOME
12. MONOPOLISTIC COMPETITION
13. PROPENSITY TO CONSUME
14. AVERAGE PROPENSITY TO CONSUME
15. PSYCHOLOGICAL LAW OF CONSUMPTION
16. DIFFERENCE BETWEEN NORMAL PRICE AND MARKET PRICE
17. MARKET FORCES
18. DEGREES OF DISCRIMINATING MONOPOLY
19. MARKET
20. SHUT DOWN POINT
21. RESERVE PRICE UNDER PERFECT COMPETITION