rl SVKM’s NMIMS ‘4 MUKESH PATEL SCHOOL OF TECHNOLOGY MANAGEMENT & eNommgRiNe Programme:MBA ech (ALL STREAMS) Year: Il sy ter:V \ < Academie Year: 2013-2014 wait Subject :Business Economics Marks: 50 Date : 06/12/2013 Time : 10.00 am to 12.00 pm Duration :2 (hrs) Final-Examination 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. 1 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. 1. Present diagrammatically the different phases of business cycles and briefly lay out the key features of any two phases. Comment about the various phases of business cycle that India witnessed since 2008 to 2013. [10 Marks} 2. If there are only two sectors in an economy — household sector and business sector, then construct ‘a model to depict the circular flow of money clearly stating the factor incomes, factor payments, national income, consumption and expenditure and the value of goods produced in an economy. How this model will be affected if suppose the household sector does not consume their entire income on the goods produced by the business firm and instead they start saving a part of their income? Modify this model by introducing the capital market sector, government sector and foreign sector in this 2-sector economy. [10 Marks} 3. Explain the importance of (any 2) [2 x5=10 Marks] (@) Philips Curve (b) Production Possibility Curve (©) Indifference Curve.A particular state government is contemplating to impose a new tax on cigarettes named “Anti- tobacco tax” which will increase the average prices of cigarettes across all brands by 10 percent, A recent study revealed the responsiveness of price change for cigarettes on the smoking behaviour of individuals for various age groups which is produced below: Age Group Price- elasticity Below 20 1.25 20-40 0.95 Above 40 0.25 ‘Assuming ceteris paribus, ifthe volume of average sales for various age groups are in the ratio 63:1 respectively, briefly explain, whether the government will be able to generate additional revenue for its state? {10 Marks} How inflation in a country can be regulated using monetary and fiscal policies of the government? [10 Marks] From the following total utility schedule: [10 Marks] Oo 0 i 2 3 a 3 6 | 24 TU, 0 4 4 20 24 26 (@) Derive the marginal wiility schedule. (b) Plot graphically the total and the marginal utility schedules. (©) Determine where the Law of Diminishing Marginal Utility begins to operate. (@) Find the saturation point. (©) According to which approach of utility analysis of the theory of demand we can quantify utility? Who was the proponent of this approach of utility measurement? Write Short notes on: (any 2) [2 x5= 10 Marks} (@) Capital and Current Account (®) Globalisation (© India as an Mixed Economy. —* ——~ 212