| ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS) | ||||||||||||||||||||
| END SEMESTER EXAMINATION – SEPT/OCT. 2015 | ||||||||||||||||||||
| B.COM(BPM) – I SEMESTER | ||||||||||||||||||||
| C3 15 AR103 : BUSINESS ECONOMICS | ||||||||||||||||||||
| Duration: 3 Hours Max. Marks: 100 | ||||||||||||||||||||
| SECTION – A | ||||||||||||||||||||
| I) | Answer ALL the questions. Each carries 2 marks. (10×2=20) | |||||||||||||||||||
| 1. | Define Business Economics. | |||||||||||||||||||
| 2. | What are Giffin goods? | |||||||||||||||||||
| 3. | Mention any three factors which affect the elasticity of demand. | |||||||||||||||||||
| 4. | State the Law of Supply. | |||||||||||||||||||
| 5. | What is meant by the term ‘Break-even point’? | |||||||||||||||||||
| 6. | Why is the AR curve under Monopolistic competition more flexible than the AR curve under Monopoly? | |||||||||||||||||||
| 7. | Mention any four objectives of pricing? | |||||||||||||||||||
| 8. | Differentiate between Balance of Payments and Balance of Trade. | |||||||||||||||||||
| 9. | Explain the term Inflation. | |||||||||||||||||||
| 10. | Give the meaning of Oligopoly. | |||||||||||||||||||
| SECTION – B | ||||||||||||||||||||
| II) | Answer any FOUR questions. Each carries 5 marks. (4×5=20) | |||||||||||||||||||
| 11. | Differentiate between Micro and Macroeconomics. | |||||||||||||||||||
| 12. | What is a Business Cycle? Describe the various phases of Business Cycles. | |||||||||||||||||||
| 13. | From the data given below, find the trend values for each year using the method of least squares and estimate the annual sales for the year 2006 and 2007.
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| 14. | Define Indifference curves. Explain the various properties of Indifference curves. | |||||||||||||||||||
| 15. | How can disequilibrium in the Balance of Payments be corrected? | |||||||||||||||||||
| 16. | Distinguish between monopoly and perfect competition. | |||||||||||||||||||
| SECTION – C | ||||||||||||||||||||
| III) | Answer any THREE questions. Each carries 15 marks. (3×15=45) | |||||||||||||||||||
| 17. | Explain the Law of Diminishing Marginal Utility with the help of a table and diagram. | |||||||||||||||||||
| 18. | a. Define Price elasticity of demand. Discuss the various methods of calculating elasticity of demand.
b. The demand for goods X and Y have equal price elasticity. The demand of X rises from 100 units to 250 units due to a 20 % fall in its price. Calculate the percentage rise in demand of Y if its price falls by 8%.
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| 19. | Describe the various components of Balance of Payments account. | |||||||||||||||||||
| 20. | What is meant by the term Monetary Policy? Discuss the various instruments of Monetary Policy? | |||||||||||||||||||
| 21. | Examine the various methods of pricing. | |||||||||||||||||||
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SECTION – D |
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| IV) | Case Study (1×15=15) | |||||||||||||||||||
| 22. | The price of raw sugar recently reached its highest level since 1981 due to problems with supply. Historically, raw sugar has traded at between 10 and 12 US cents per pound at the New York Board of Trade. But the price increased to over 18 cents last month. Growing demand in Brazil for sugar to be turned into ethanol for fuel, coupled with a sharp fall in Indian production have both been factors in the price increase. Sugar production in India for 2008-09 fell 45% year-on-year due to less rain in the monsoon season damaging a number of agricultural crops. The London-based International Sugar Organisation predicts that global consumption of sugar is likely to outstrip production by 9m tonnes next year, forcing food companies and governments to dig into stockpiles. In the US, snack producers including Mars, Nestlé and Krispy Kreme Doughnuts put pressure on the US government to relax import controls, warning that otherwise they might run out of sugar. Commentators predict that most shoppers will be unaffected because sugar is such a small part of a consumer’s typical spending in a week that no one will notice an increase in price.
Questions: a. Explain, using supply and demand analysis, why the price of sugar has been increasing recently. b. Do you think a) the supply and b) the demand for sugar is price elastic or inelastic? Justify your choices and explain whether this means any given change in supply or demand will have a bigger effect on the equilibrium price of quantity. c. In what ways is the market for sugar used in confectionery related to the market for ethanol? d. How might companies such as Mars and Nestlé react to an increase in the price of sugar? |
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