p S) POKHARA UNIVERSITY Level: Bachelor Semester —Fall Year =: 2015 Programme: BBA/BBA-BI/BCIS/BBA-TT/BHCM Full Marks: 100 Course: Introductory Microeconomics Pass Marks: 45 Time 3hrs. Candidates are required to give their answers in their own words as far 7 aspracticable. The figures in the margin indicate full marks = A Section" 10*2 Very Short Answer Questions Attempt all the questions. \, _ Explain two differences between micro and macroeconomics. ‘What is market economy? If the price of a commodity rises from Rs.10 to Rs.15, its quantity demanded falls from 100 units to 60 units. Calculate the price elasticity by expenditure method. ‘What are Giffen goods? What is opportunity cost? ‘ : “|so-quants never intersect each other.” Prove it 5 What is Engel Curve? What is price discrimination? a! Define minimum wage rate. 10. ‘What do you understand by contract rent? Section "B" 6x10 Descriptive Answer Questions Attempt any six questions }1. ‘Economics is the study of the optimum utilization of the scarce resources.’ Discuss. 12, The demand for an Introductory Microeconomics text is given by ~ Q=20000-300p. This book is initially priced at Rs.30. a) Compute the point elasticity of demand at Rs.30. AlWise tp of nina cae, Hw pie fet is woken We Batten et onl inate efector pot ‘Wise oa” Sat and epi he aw of ets oe, Suppose th ttl cost fora pit sth suture giver bythe {ren n00110:0 020? ‘Whats ed con? inte ta con, Average cost Average varie ai et com oe 10,28, 30, #0 and 0 ws of ue ‘What aethe mor ete of Monopoly markt? Exp Bow pre NOSES anid under MenopyMaret sts, ‘on ise dai? Dies abot he major cases and onsenses wernt cores Nepal Sestion"C™ (case Ama cae: Sheard that OPEC wat bi shay feese pele RoR seus member eis and bwin Pal Tele nase ae sey members of OPEC: Ali, tn nnesia omy tng, wad Lita, Niger, Qa, Sau eather Eines and Venema (Ector, the deen ‘rns eiew Novem 1992)As 2 vest of spp shock ‘trp tc Aral warn the fall of 1973 andthe. asian Tl aee=ae Prove thatthe trend of AC is influenced by the end of AFC and AVC. b. Explain the raph AC, MC and their relationship. ‘lain the law of variable proportions in which stage of production 5 arational producer operat. efine monopolistic competition, How the price and the output are for one variable input under monopoly. Case Analysis ithe imation given below and answer the questions that follow. ‘The United States is one of the wo ing, producers of ‘Idaho is panicularly famous source ofthis product, but other je Maine, Orez0n, and Washington are important oo. In 1995, in Idaho and elsewhere planted more potatoes than wsual and ally favorable, Frost, pests, and disease f Supply curve for potatoes. The 1996 crop was the largest Imast 49 billion pounds. Consequently, the price of potatoes 100-pound sack nosedive from about $8 in 1995 to about $1.75 in to leading potato producer, farmers lost about $1,000,Unfortunately, this is not the only problem facing US. potato producer. The potato market today is dominated by French fries, which are becoming popular throughout the world. But as demand for French fries grows in various countries, producers of French fries are trying to establish local sources of potatoes. For example, according to the chairman of McCain foods, the world’s leading producer of frozen French fries, “If we're in England, we're buying all of the potatoes we can buy in England.” Obviously this reduces the exports of potatoes by U.S. producers, while U.S. exports of French fries have increased considerably in recent years. There is the feeling that this growth may considerably. Questions: a) Identify the market structure for U.S. potato and explain the characteristics. b) Which factors are responsible for shifts in supply curve of U.S. potato? Explain them with the help of diagram. What will be the effect on equilibrium price of U.S. potato due to change in factors related to internal market and external market? Explain with the help of diagram. ©)