NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Business Economics
Internal Assignment Applicable for April 2022 Examination

ANSWER - 1

ANSWER - 2

Following is the complete answers for the hypothetical table mentioned in the question
paper:

Quantity Total Product Average Product Marginal product

1 10 10 10

2 38 19 28

3 40 13.33 2

4 56 14 16

5 56 11.2 0

6 52 8.66 -4

Average Product (AP) = Total Product (TP)/ Units of Labour (L)

Marginal Product = MPn = TPn - TPn-1

Law of variable proportions

The Law of Variable Proportions states that, as the quantity of one factor pf
production increases, while keeping all the other factors constant unchanged, will lead
to a decline of the marginal product of that factor.

There are a few assumptions of the Law of variable proportions:

 1. The Constant State of Technology
2. Variable Factors of production
3. The products are homogenous in nature

ANSWER - 3(a)

There are 2 types of economies of scale, i.e.,

1. Interal economies of scale

2. External economies of scale

ANSWER - 3(b)

Shift of the demand curve - When demand for particular commodity changes due to
change in some other factor keeping the price constant, then this is known as a shift in
the demand curve which is also known as a change in demand. This leads to the right
or left shift of the demand curve. Price remains constant in this case.

Movement of the demand curve - When demand for particular commodity changes
due to a change in both quantity demanded and price, then this is known as the
movement of the demand curve which is also known as quantity demanded. This leads
to upward or downward movement of the demand curve.