123 : BUSINESS ECONOMICS - II (FYBCOM) || Question Bank || English

123 : BUSINESS ECONOMICS - II (FYBCOM) || Question Bank

Cost and Revenue 

Short-Answer Questions

1. Differentiate between incremental and sunk costs.

2. State the relation between total cost, average cost and marginal cost.

3. Why does average revenue equals to marginal revenue under perfect competition?

Long-Answer Questions

1. Describe the classification of different cost concepts.

2. Analyse the short-run and long-run cost output relations with the help of graphs.

3. Explain the concept of total revenue, average revenue and marginal revenue.

Pricing Under Perfect Market Conditions

Short-Answer Questions

1. Write a short note on the concept of free entry and free exit.

2. Differentiate between perfect and pure competition.

3. What are shut-down or close-down points?

Long-Answer Questions

1. Analyse the numerous assumptions on which a perfect competition is based

upon.

2. ‘According to the traditional theory of firm, a firm is in equilibrium when its

profit is maximum.’ Describe the statement.

3. Describe the constant and increasing cost industry with the help of graphs.

Pricing Under Imperfect Market Conditions

Short-Answer Questions

1. What is monopoly? What are the sources of monopoly?

2. ‘There is no supply curve of a monopoly firm’. Do you agree with this statement?

Give reasons.

3. Compare monopoly and perfect competition with regard to the following: (i)

price, (ii) output, and (iii) welfare.

4. Show the difference between the long-run equilibrium of a competitive firm and

the long-run equilibrium of a monopoly firm with regard to the following: (i)

price, (ii) profits, and (iii) use of capacity.

5. What is meant by ’dead weight loss’?

6. How does oligopolistic competition differ from monopolistic competition?

7. How is oligopoly different from monopolistic competition? Explain price

determination under conditions of oligopoly.

Long-Answer Questions

1. Write a descriptive note on the relationship between average revenue and

marginal revenue under (i) perfect competition, and (ii) monopoly.

2. How is pricing under monopoly different from that under perfect competition?

Can a monopoly firm fix any price for its product?

3. Discuss the features of monopolist competition. How does it differ from perfect

competition?

4. Discuss the structure of the market under oligopoly. What are the problems

posed by such a structure in the theory of oligopoly?

5. Explain Cournot’s duopoly model and apply his solution to oligopoly. Does it

provide a stable solution?

Factor Pricing 

Short-Answer Questions

1. What is the classical view on marginal productivity theory of factor price

determination?

2. What is the difference between the modern theory and Ricardian Theory of

rent?

3. Distinguish between rent and quasi-rent.

4. Differentiate between dynamic wage differentials and static wage differentials.

5. Write a short note on backward bending supply curve of labour.

6. How does collective bargaining help in wage determination?

7. What are the components of demand for loanable funds?

Long-Answer Questions

1. Discuss and illustrate the concept of quasi-rent. Why does a factor earn quasirent only in the short-run?

2. Discuss the modern theory of rent. Explain clearly as to how economic rent

depends on the elasticity of supply of a factor of production

3. Explain the concept of economic rent. How is economic rent conceptually

different from rent?

4. Using indifference curve analysis, illustrate the derivation of labour supply curve.

Why is the labour supply curve backward bending?

5. Explain the concepts of the transactions demand for money and speculative

demand for money.

6. Profits are reward for uncertainty bearing. Dicuss.

7. Explain the innovation theory of profit. Why does profit appear to disappear in

the course of economic development?