Seat No:______________ Enrollment No:______________

PARUL UNIVERSITY
FACULTY OF MANAGEMENT
MBA Summer 2021 - 22 Examination
Semester:01 Date:06/04/2022
Subject Code: 06200105 Time: 10:30 am to 01:00 pm
Subject Name: Business Environment and Economics Total Marks: 60
Instructions
1. All questions are compulsory.
2. Figures to the right indicate full marks.
3. Make suitable assumptions wherever necessary.
4. Start new question on new page.

Q 1 Do as directed.
A. Multiple choice type questions/Fill in the blanks. (Each of 1 mark) (05)

1. Which of the following statements about opportunity cost is TRUE?

I. Opportunity cost is equal to implicit costs plus explicit costs.
II. Opportunity cost only measures direct monetary costs.
III. Opportunity cost accounts for alternative uses of resources such as time and money.

a) I, II and III. b) I
c) III only. d) I and III only.

2. Which of the following statements about the market supply curve for a product is false?
a. The market supply curve represents the individual supply curves of all firms which produce the product added
together.
b. The market supply curve may shift if there is a change in the behaviour of some firms which produce the
product.
c. The market supply curve may shift if there is change in the price of the product.
d. The market supply curve may shift if there is a change in the number of firms which supply the product.

3. When would a perfectly competitive industry have a long-run supply curve that slopes downwards?
a. If the industry has constant costs. b. If the industry has decreasing costs.
c. If the industry has increasing costs. d. Never

4. Which of the following is not a factor of production?

a. Labour b. Land
c. Capital d. Money

5. If a small percentage increase in the price of a good greatly reduces the quantity demanded for that good,
the demand for that good is
a. Price Elastic b. Price Inelastic
c. Income Elastic d. Unit Price Elastic

B. Define the following (Each One Mark) (5)

1. What is Economies of Scale?
2. What is Phillip’s Curve?
3. What is difference between GDP and GNP?
4. What is circular flow of income?
5. What is money inflation?

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C.Direct questions. (Each of 1 mark) (5)
1. What is economic growth?
2. What is a three party economy?
3. What is an equation to calculate GDP?
4. What is a monetary policy?
5. Describe Oligopoly.

Q 2. Answer following questions.

A. What is a relationship between inflation and unemployment in short run according to Phillip’s Curve?
(07)
B. Describe equilibrium price under simple monopoly. (08)

Q 3. Answer following questions.

A. Distinguish between price elasticity of demand and cross elasticity of demand. Discuss the factors
determining price elasticity of demand. (07)

B.Explain Keynesian Theory of Demand and Supply of Money. (08)

Q 4.Attempt any two questions (Each of 7.5 Marks) (15)

A. Explain any two types of elasticity of demand with practical examples.
B. Explain Determinants of Demand, and exceptions to the law of demand.
C.What is a GDP Deflator? Explain its use in an economy with example.
D. In a three party economy, what role does a Government play?

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