15GE701

Regulation: 2015

BANNARI AMMAN INSTITUTE OF TECHNOLOGY

(An Autonomous Institution Affiliated to Anna University, Chennai)
SATHYAMANGALAM – 638 401

PERIODICAL TEST I - Nov / Dec 2020

VII Semester
Degree & Branch : B.Tech-TT 15GE701

Time :1½ Hrs. Maximum :50

Marks

Number of Students: 56

Instructions:
1.Section Aand B contains questions for 20 Marks each. Section C contains questions for 10 Marks.
2.No Choices are given

Q.No Questions

SECTION A COURSE OUTCOME 1 MAXIMUM : 20 MARKS

A1 The economy of India is characterised as a developing market economy as shown in Figure 1.
Indian economy slowed, in 2017, due to the shocks of "demonetisation" in 2016 and the
introduction of goods and services tax in 2017. Nearly 60% of India's GDP is driven by domestic
private consumption and continues to remain the world's sixth-largest consumer market.
The service sector makes up 55.6% of GDP and remains the fastest-growing sector, while
the industrial sector and the agricultural sector employs the majority of the labour force. India has
a high national debt to 68% of GDP, while its fiscal deficit remained at 3.4% of GDP. Analyse the
given situation and choose the best economic system to increase the GDP growth in india for
developing employment, equality, and rise in demand in the future economy in the year 2020-
2021.

Figure 1. Different types of economic system.

In a mixed economy, have a better track record than market economies in terms of _______

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and ________. (2 Marks-[An/C,2])
(a) Economic efficiency and freedom
(b) Economic growth and security
(c) Economic stability and security
(i)
(d) Economic efficiency and security
(e) Economic sustainability and freedom
(f) Economic sustainability and security
(ii) The market economy produced more rapid __________ growth than other kinds of economies.
(a) Social (2 Marks-[U/C,2])
(b) Market
(c) Economic
(d) Demand
(e) Fiscal
(f) Monetary
(iii) In what kind of economy the pricing is decided by the laws of demand and supply, but the
government decides the pricing ceiling and taxation norms. (2 Marks-[Ap/C,2])
(a) Market economy
(b) Dynamic economy
(c) Traditional economy
(d) Command economy
(e) Price economy
(f) Mixed economy
(iv) In a mixed economic system, there is the free flow of ideas, it allows laws of demand and supply
to determine the ______ policy. (2 Marks-[An/P,2])
(a) Income Policy
(b) Pricing policy
(c) Trade Policy
(d) Employment Policy
(e) Fiscal policy
(f) Monetary policy
(v) __________ economics have the ability to adjust rapidly to changing circumstances. They have
the ability to shift resources away from one industry to another to increase demand.
(a) Mixed economy (2 Marks-[Ap/P,2])
(b) Social economy
(c) Market economy
(d) Command economy
(e) Macroeconomy
(f) Traditional economy
A2 In business analysis, the production possibility frontier (PPF) is a curve that illustrates the
variations in the amounts that can be produced of two products. Imagine a national economy that
can produce only two things: wine and cotton. According to the PPF, points A, B, and C on the
PPF curve represent the most efficient use of resources by the economy. For instance,
producing five units of wine and five units of cotton (point B) is just as desirable as producing
three units of wine and seven units of cotton. Point X represents an inefficient use of resources,
while point Y represents a goal that the economy simply cannot attain with its present levels of
resources as shown in Figure 2. Analyse the production possibility curve and provide suitable
cost-profit volume analysis for the goods to attain maximum profit level.

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Figure 2. Production Possibility Frontier curve.

Production possibility curve shows all the possible combinations of _______ and _______.
(a) Price and output (2 Marks-[U/C,2])
(b) Goods and product
(c) Price and Product
(d) Goods and services
(i) (e) Product and services
(f) Price and goods
(ii) More output is represented by an ______shift in the production possibility curve.
(a) Upward (2 Marks-[Ap/C,2])
(b) Downward
(c) Right hand
(d) Left hand
(e) Outward
(f) Parallel
(iii) Tradeoffs and opportunity costs can be illustrated using a__________ curve. (2 Marks-[An/C,2])
(a) Production curve
(b) Profit loss curve
(c) Marginal revenue curve
(d) Supply Demand curve
(e) Production possibility curve
(f) Price output curve
(iv) In the production possibility curve, which of the quantities of resources does not change?.
(a) Labour and price (2 Marks-[An/C,2])
(b) Capital and Labour
(c) Land and policy
(d) Capital and price
(e) Price and policy
(a) Capital and policy
(v) A production possibility curve is used to illustrate __________ cost. (2 Marks-[Ap/C,2])
(a) Marginal Costs
(b) Oppurtunity cost
(c) Economic cost
(d) Accounting cost
(e) Sunk cost
(f) Fixed cost

SECTION B COURSE OUTCOME 2 MAXIMUM : 20 MARKS

B1 An agricultural industry produces mainly foodstuffs, which are the main necessities of life; as a

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result, the demand for all agricultural products, taken together, tends to be inelastic. If the prices
of all foods fall, consumption will not greatly expand, nor will it greatly contract if food prices go
up. First, if all food prices fall, the same amount of income will purchase more goods than before
it purchased. Similarly, if food prices go up, there must be some contraction in consumption
because of the fall in real incomes, but there is not likely to be many substitution of industrial for
agricultural products. The demand for food, taken as a whole, is inelastic, just as its supply is
shown in Figure 3. Analysis of the demand curve to solve the industrial problem within the
stipulated time period.

Figure 3. Demand
curve for agriculture sector.
The demand for a particular product is dependent upon the demand for some other goods it is
called _________. (2 Marks-[U/C,2])
(a) Direct demand
(b) Indirect demand
(i)
(c) Firm demand
(d) Derived demand
(e) Autonomous demand
(f) Industry demand
(ii) The change in quantity demanded to a change in price occurs quickly in the Figure 3. The
demand for perishable commodity is __________ return period. (2 Marks-[Ap/C,2])
(a) Quantity demand
(b) Market demand
(c) Long run
(d) Short run
(e) Industry demand
(f) Derived demand
(iii) The change in the purchase of a commodity as a result of a change in relative price alone, while
the income of the consumer remains constant. Such effect is said to be _______.
(a) Mixed effect (2 Marks-[An/P,2])
(b) Income effect
(c) Substution effect
(d) Veblen effect
(e) Speculative effect
(f) Quantity effect
(iv) The law of demand can be explained with the help of _______ curve. (2 Marks-[U/C,2])
(a) Price demand
(b) Elastic demand
(c) Inelastic Demand
(d) Market demand
(e) Schedule demand
(f) Individual demand
(v) Demand function (D=f(p)) is the relationship between the demand for a _______ and its various
determinants that affect this _________. (2 Marks-[Ap/P,3])
(a) Price, Quantity

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(b) Product, Price
(c) Price, Quality
(d) Product, Quantity
(e) Quality, Quantity
(f) Product, Income of consumer
B2 Dhivya is quite hungry and decides to purchase a pizza for lunch. The shopkeeper told me the
price of a single slice of pizza for $2. She decides to buy five slices of pizza. After purchasing,
She consumes the first slice of pizza and gains a certain positive utility from eating the food.
Because she was so hungry and this is the first food she consumed, the first slice of pizza has a
higher benefit. Upon consuming the second slice of pizza, the dhivya appetite is becoming
satisfied. She wasn't as hungry as before, so the second slice of pizza had a smaller benefit and
enjoyment as the first. The third slice, as before, holds even less utility as the dhivya is now not
hungry anymore. In fact, the fourth slice of pizza experienced by dhivya, as it is difficult to be
consumed because she has experienced discomfort upon being full of food. Finally, the fifth slice
of pizza cannot even be consumed. The five slices of pizza decrease utility that is experienced
upon the consumption of any good. Analyse the situation of dhivya and you provide the solution
that "On which slice of pizza she experiences the diminished utility, negative utility and
indifference utility of demand. Analyse the law of diminishing utility and indifference curve and
provide a suitable solution to the problem as shown in Figure 4.

Figure 4. Demand curve for diminishing marginal utility and indifference curve of pizza slice.

Identify the following property that comes under the indifference curve of a pizza slice.
(a) Positively sloped (2 Marks-[U/C,2])
(b) Non-intersecting
(c) Concavity
(d) Inconsistency
(e) Interruption
(f) Linear line
(i)
(ii) The indifference curve is ______ to the origin and shows the diminishing rate of the marginal
rate of ________ between two goods. (2 Marks-[Ap/P,3])
(a) Straight line, Utility
(b) Concave, Subtitution
(c) Convex, Utility
(d) Straight line, Subtitution
(e) Convex, Subtitution
(f) Concave, Utility
(iii) The law of diminishing marginal utility theory is not applicable to certain goods. Select the correct
good from the options given below. (2 Marks-[Ap/C,3])
(a) Pizza
(b) Soft drinks

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(c) Medicines
(d) Mangoes
(e) Chappathi
(f) Drugs
(iv) Indifference curve analysis fails to explain ________. (2 Marks-[U/C,2])
(a)Measurement of national income
(b)Cost of living index
(c) Effect of taxation
(d)Price dicrimination
(e)Consumers behaviour
(f) Effect of increase in wages on supply
(v) An additional or incremental satisfaction (utility) of a consumer receives from acquiring one
additional unit of a product is said to be ________. (2 Marks-[An/C,2])
(a) Intial utility
(b) Zero utility
(c) Marginal utility
(d) Indifference utility
(e) Positive utility
(f) Negative utility
SECTION C COURSE OUTCOME 3 MAXIMUM : 10 MARKS
C1 In economics, a production function gives the technological relation between quantities of
physical inputs and quantities of the output of goods. Many technologies allow inputs to be
substituted for each other, but not at a constant rate. Suppose that one person operating a
machine for an hour can produce 100 units of output using 100 units of raw material. Perhaps if
the speed of the machine is increased, the same 100 units of output can be produced in
45 minutes using 150 units of raw material, the more raw material is needed since some are now
wasted. But if the speed is increased again, reducing the amount of labor time needed for
30 minutes, the amount of raw material needed, may increase by much more than 50 units,
since wastage may greatly increase as shown in Figure 5. If the law of diminishing returns holds,
however, the marginal cost curve will eventually slope upward and continue to rise, representing
the higher marginal costs associated with additional output. Analyse the given situation and
choose the production function with respect to inputs and outputs without increase the marginal
cost of the products.

Figure 5. Production function curve to increase in the marginal cost.

Production function, like the _____function, is considered always with reference to a particular
period of time. (2 Marks-[An/C,2])
(a) Product
(b) Cost
(c) Supply
(i) (d) Marginal utility
(e) Demand
(f) Law of variable proportion
(ii) Production function helps to locate weak points in production management to minimize

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_______. (2 Marks-[Ap/C,3])
(a) Supply
(b) Demand
(c) Product
(d) Profit
(e) Quality
(f) Cost
(iii) Does the law of returns to scale is related to the long-run production function. (1 Mark-[U/C,2])
(a) True
(b) False
C2 In the agriculture industry, the production changes in response to an increase in all inputs in the
long-run period. Their exhibit increasing, decreasing, and constant returns to scale include
companies engaged in the exploration of natural resources results in a higher risk of failure as
shown in Figure 6. Analyse the given situation and you must develop the return to scale function
with respect to the short-run and long-run period of the products.

Figure 6. Law of returns to scale of the farm product.

In the case of constant return to scale, the factors of production are perfectly divisible, the
_______ function is homogeneous of degree with respect to fixed factors. (2 Marks-[An/P,2])
(a) Price
(i) (b) Product
(c) Demand
(d) Supply
(e) Marginal utility
(f) Production
(ii) In the long-run period, all the factors of production are fixed. No factor is a variable one. Whether
the statement is ________. (1 Mark-[U/C,2])
(a) True
(b) False
(iii) If the firm continues to expand beyond the stage of constant returns, the stage of ________to
scale will start to operate the firms as shown in Figure 6. (2 Marks-[Ap/P,3])
(a) Variable proportion
(b) Decrease demand
(c) Increase supply
(d) Diminishing returns
(e) Return to scale
(f) Increase supply and demand
***End of Question Paper***

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RBT ANALYSIS
Remember Understand Apply Analyze Evaluate Section Total
Knowledge
Total
Section A B C A B C A B C A B C A B C A B C

Factual

Conceptual 8 16 4 12 8 4 12 4 4 32 28 12 72

Procedural 4 8 4 4 4 4 8 12 8 28

Metacognitive

Section Total 8 16 4 16 16 8 16 8 8 40% 40% 20% 100%

Cognitive
28 40 32 100% -
Total

Fill the RBT analysis in percentage of marks ((Marks/75)*100) at each applicable cells.
It should be given in landscape layout and in separate page.

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