Viswa Deep Multiple Campus

Tripureshwor, Kathmandu
Third Term Examination 2022
Bachelor’s Level/ I Year/ Management Full Marks: 100
MGT 207: Microeconomics for Business Pass Marks: 40
Time: 3hrs
Candidates are required to answers in their own words as far as practicable.
Figures in the Brackets indicate the full marks.
Group A
Brief Answer Questions
Attempt ALL Questions [10*2 = 20]
1. Prepare a list of use of microeconomics.
2. Define supply function.
3. What is price elasticity of supply?
4. Define price consumption curve.
5. What are the assumptions of Marshallian utility analysis?
6. Complete the following schedule and show Marginal rate of substitution.
Combinations Good-X Good-Y MRSXY
A 1 - -
B 2 14 -
C 3 - -
D 4 - -
E 5 - -

7. If Q = 16L+8L2-L3, compute TP, AP and MP for 5 units of output.

8. Define accounting and economic cost.
9. A firm’s average revenue is Rs. 100 and average cost is Rs. 120 and its average fixed cost is Rs. 50.
Should the firm stay in business? Why?
10. What are the determinants of supply of loanable funds?
Group – B
Descriptive Answer Questions

Attempt any FIVE Questions [5*10 = 50]

11. What do you mean by business economics? Explain its scope. [2+8]
12. Explain the determinants of demand. [10]
13. Consider the following schedule
 Points A B C D E
Px 3 6 9 12 15
Qdx 150 120 90 60 30
Qsx 30 60 90 120 150
a. Compute price elasticity of demand at equilibrium price.
b. Compute price elasticity of supply at movement from B to D and D to B by percentage method.
c. Compute price elasticity of demand at movement from B to D and D to B by arc method [2+4+4]
14. Explain the concept of Cobb-Douglas production function. [10]
15. How price and output are determined in monopolistic competition in short run? [10]
16. Explain the liquidity preference theory of interest. [10]

Group – C
Analytical Answer Questions

Attempt any TWO Questions. [2*15 = 30]

17. Decompose price effect in to income and substitution effect. (Giffen goods) [15]
18. Consider the following table. [9+6]
Output TVC TFC TC AFC AVC AC MC
0 0 - 200 - - - -
1 180 - - - - - -
2 - - 540 - - - -
3 - - - - 160 - -
4 - - - - - 200 -
5 - - - - 148 - -
6 - - - - - - 160
7 - - 1280 - - - -
8 1300 - - - - - -
9 - - - - - - 260
10 - - - - 186 - -
a. Complete the above table.
b. Explain the relationship between AC and MC in short run and long run.
19. Define price discrimination. Explain the determination of equilibrium price and output under
discriminating monopoly. [2+13]

💐💐💐 Good Luck 💐💐💐