SVKM’s NMIMS MUKESH PATEL SCHOOL OF TECHNOLOGY MANAGEMENT & ENGINEERING Programme: MBA Tech (ALL STREAMS) Year: Ill ester: V ¥Z Academic Year: 2014-15 Subject: Business Economics Date: 05/12/2014 Instruction: Candidates should read carefully the instructions printed on the question paper and on the cover of the Answer Book, which is provided for their use. NB: 1) Question No. _4._ is compulsory 2) Out of remaining questions, attempt any 4 questions. 3) Inall 5 questions to be attempted. 4) All questions carry equal marks. 5) Answer to each new question to be started on a fresh page. 6) Figures in brackets on the right hand side indicate full marks. 7) Assume Suitable data if necessary LA. ‘The below table shows the details of Indian economic data for the period-2007-08 (5 Marks) Consumption of Fixed Population | GDP at Factor Cost | Net Dreneny | Capital (Rs Billion) (Million) (Rs Billion) | ‘es Billion) | 846, set aoe ae or 205.12 | Calculate GNP at Factor Cost, NNP at Factor Cost and Per Capita NNP at Factor Cost (Rupees) 1. B. What is the difference between demand pull and cost push inflation? (5 Marks) 2. A. What is Open Market Operations (OMO) and How does RBI control liquidity in the economy through this instrument? (5 Marks) 2. B. ‘Balance of payment of a country always balances’, Explain (5 Marks) 3. A. The U? shapes of short run and long run average cost curves are based on the operation of the law of diminishing returns. Whether the statement is True or False? Explain. (5 Marks) aj3.B, Given the following total cost schedule of a firm [Oday q TC (Lakhs) 30] =|") 180 (a) Derive the total fixed cost and total variable cost schedule of the firm, and from them derive the average fixed cost, average variable cost, average total cost, and marginal cost schedule of the firm. (3 Marks) (b) Plot all these schedules of part (a) on a figure. (2 Marks) 4. A. What do you mean by Marginal Revenue Product of an input and how is it calculated? Explain, why does the marginal product of an input declines as more units is employed. (5 Marks) 4, B. Khan and Roy have written a new financial engineering book for which they receive royalty Payment of 10% of total revenue from sales of book. Since their royalty income is tied to the revenue, and ‘not profit, they want the publisher to set the price so that the total revenue is maximized. However the Publisher's objective is to maximize profit if the total revenue function is TR=100000Q-10 And the total cost function TO= 100004200+Q" Determine: ‘The output rate that will maximize the total royalty revenue and the amount of royalty income that Khan and Roy would receive, And find out the output rate where the profit is maximum. (5 Marks) 5. A. why and how is the formula for are price elasticity of demand differs from the formula for point price elasticity? (5 Marks) 5. B. In the electronic market of Irla, the demand function as analyzed by Alfa for its LED TV set is P= 12000-6Q, find out a) The marginal revenue function (2 Marks) b) At what price and quantity the marginal revenue will be zero. (G Marks) 6. A. What is the difference between cardinal and ordinal measurement of utility? (5 Marks) 6. B. What is an Economic System? Discuss different types of Economic Systems. (5 Marks) 7. Write a short note on any two (SX2=10 Marks) a) Business cycle b) Three sector circular flow ©) Liberalization 4) Cash Reserve Ratio