KOHAT UNIVERSITY OF SCIENCE AND TECHNOLOGY, KOHAT

Institute of Business Studies

Paper: Money and Banking
Discipline: BBA, Section: (R and S) (Exam: Online Mid 1: Fall, 2020), Time: 9:00 AM-9:00 AM
Marks: 30

INSTRUCTIONS:

1) The Answer sheets must be handwritten. Your Name, Registration number, Program and Semester MUST be
clearly written on your handwritten answer sheet.
2) After solving the paper, student is required to follow three steps, (1): Clearly scan it, (2): then convert it into PDF,
(3): upload on KCMS. In case of any technical issue with KCMS account, submit your answer sheet through
registered email to Muhammad.awais@kust.edu.pk not later than 24 hours.
3) Important Note: Solved handwritten answer sheet must be submitted within 24 hours after which it will not be
accepted.
4) The student will send hard copy of their answer sheets through courier / postal services or can submit person
to the concerned instructor within the 24 hours after the Examination.

Attempt all questions.

Q1. Define the following terms:

Positive Economics, Normative Economics, Managerial Economics, Law of Demand and Supply with the
help of Graph, difference b/w movement along the curve and shift of the curve, graphically shows the market
surplus and shortage, elasticity of supply and demand, price elasticity of supply and demand, income
elasticity of demand, cross price elasticity of demand, difference b/w short run and long run production
function, firms and different types of firms, satisficing behavior, principal agent problem.

(15 Marks)

Q2. What is production function? What are the factors of production? And explain the Law of Diminishing
Returns and Stages of Production. (5 Marks)

Q3. Write a short note on:

(a) Basic process of decision making. (2 Marks)

(b) Profit Maximization with the help of graph. (2 Marks)
(c) Theory of Firm – Reason for existence of firms and their functions – The objective and value of firm
– constraints on the operation of the firm. (4 Marks)
(d) Limitation of the theory of firm. (2 Marks)

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