1st Sem BBA

Course: Business Economics (Micro economics)

Question Bank
3 marks

1. Define Economics and explain its scope.

2. State the law of diminishing marginal utility with an example.
3. Explain the roles of the agents in an economy. How do these agents interact with each other?
4. Discuss the scope of economics.
5. Define 'utility' in economics and explain its significance in utility analysis.
6. Identify and briefly describe the three primary agents of economics.
7. List and briefly explain the central problems faced by an economy.
8. Name any three principles of economics and provide a short explanation for each.
9. Define economics and explain its scope in the context of decision-making and resource allocation.
10. Define an indifference curve and explain its basic properties.
11. What does the Revealed Preference Theory suggest about consumer choices?
12. Define demand in economics.
13. State the Law of Demand and provide a brief example.
14. List and briefly describe two types of demand.
15. What is meant by elasticity of demand?
16. What is demand forecasting, and why is it important for businesses?
17. List and briefly describe the four main factors of production.
18. State the Law of Diminishing Returns and explain its significance in production.
19. Define total cost, total fixed costs, and total variable costs, and explain how they are related.
20. Define total revenue, average revenue, and marginal revenue in the context of a firm’s revenue.
21. Briefly explain the Law of Returns to Scale.
22. List and briefly describe three key features of a perfectly competitive market.
23. Explain how equilibrium price and output are determined in a perfectly competitive market.
24. Name and describe two features of a monopolistic market.
25. What is price discrimination in a monopoly? Provide a brief explanation.
26. Define duopoly and list two key features of this market structure.
27. Explain the concept of price rigidity in an oligopolistic market.
28. Mention two features of monopolistic competition.
29. Define product differentiation in the context of monopolistic competition.
30. Define profit in economics and list two types of profit.
31. Briefly explain Hawley's Theory of Profit.
32. What is Knight's Theory of Profit? Provide a brief description.
33. Describe Schumpeter’s Theory of Innovation in relation to profit.
34. What is the classical economist’s view on rent theory?
35. Briefly explain Adam Smith’s perspective on rent theory.
36. What is Ricardo’s Theory of Rent? Provide a brief explanation.
37. Define the concept of land rent in economic terms.
8 marks

1. Discuss how the problem of scarcity and choice leads to the issues of what to produce, how to
produce, and for whom to produce. Use examples to illustrate your points.
2. Discuss the concept of total utility and marginal utility. How are they related, and why is the
distinction important for consumer choice?
3. Explain the Law of Diminishing Marginal Utility in detail. How does this law affect consumer
behavior and demand for goods?
4. Describe the Law of Equi-Marginal Utility and explain how it helps in the optimal allocation of a
consumer's budget.
5. Discuss the central problems of an economy and explain how different economic systems (market,
command, mixed) address these problems.
6. Explain the different types of profit in economics. Discuss one theory of profit in detail (choose
between Hawley’s, Knight’s, or Schumpeter’s Theory).
7. Provide a detailed explanation of Hawley’s Theory of Profit. How does it differ from other profit
theories?
8. Discuss David Ricardo’s Theory of Rent. How does it explain the distribution of rent in an economy?
Include examples to illustrate.
9. Explain Adam Smith’s perspective on rent theory. How does his view contribute to the
understanding of rent in classical economics?
10. Describe the concept of land rent. How do modern views on rent theory differ from classical
perspectives?
11. Provide a detailed explanation of Knight’s Theory of Profit. Discuss its implications for the
understanding of profit in a market economy.
12. Describe the key features of perfect competition. How are equilibrium price and output
determined in such a market? Include a brief explanation of the role of time in adjusting to
equilibrium.
13. Explain how a monopolist determines equilibrium price and output. Include a discussion on the
factors that affect these decisions.
14. Discuss the different types of price discrimination a monopolist might employ. Provide examples
to illustrate each type.
15. Analyze the roles and interactions of households, firms, and the government in the economy.
Discuss how these agents make decisions and their impact on economic outcomes.
16. Discuss the central economic problems of scarcity, choice, and opportunity cost in detail. Analyze
how different economic systems address these problems
17. Explain the concept of an indifference curve in detail. Discuss the properties of indifference curves
and their significance in consumer choice theory. Include a diagram
18. Discuss the Revealed Preference Theory and how it differs from the Cardinal Utility Approach. How
does this theory help in understanding consumer behavior?
19. Explain the determinants of demand. How does the Law of Demand relate to these determinants?
Illustrate with a demand curve.
20. Discuss the Giffen and Veblen effects and provide examples of each. How do these exceptions
challenge the Law of Demand?
21. Describe the different types of elasticity of demand (price elasticity, income elasticity, cross-price
elasticity). How is each type measured? Provide examples to illustrate each type.
 22. Explain the determinants of supply. Discuss the concept of elasticity of supply and how it is
measured.

15 marks

1. Provide a detailed analysis of the Ordinal Approach to consumer choice, including Indifference
Curve Analysis and Revealed Preference Theory.
2. Discuss the concept of elasticity of demand in detail, including its types, factors affecting it, and
methods of measurement. How is elasticity used in demand forecasting?
3. Provide an in-depth explanation of the Law of Supply and its determinants. Discuss the concept of
elasticity of supply, including factors affecting it and methods of measurement.
4. Explain the Law of Returns to Scale. How does it differ from the Law of Diminishing Returns?
Provide examples to illustrate increasing, constant, and decreasing returns to scale.
5. Discuss the differences between short-run and long-run costs. Include definitions and explain how
fixed and variable costs impact production decisions.
6. Analyze total revenue, average revenue, and marginal revenue.
7. Explain the kinked demand curve model of oligopoly. How does this model account for price
rigidity in oligopolistic markets?
8. Describe how price and output are determined in a monopolistically competitive market. Include
the role of product differentiation.
9. Provide a detailed analysis of perfect competition, including its features and the process for
determining equilibrium price and output.
10. Use diagrams to illustrate how a monopolist sets price and output, and discuss the implications of
price discrimination for consumers and producers.
11. Discuss how cartels and price leadership models also explain pricing strategies in oligopolistic
markets.
12. Discuss the features of monopolistic competition in detail, with a focus on product differentiation
and market power.
13. Discuss in detail three theories of profit: Hawley’s Theory, Knight’s Theory, and Schumpeter’s
Theory of Innovation. Compare and contrast these theories to highlight their contributions to the
understanding of profit.
14. Discuss the theories of rent proposed by classical economists, including Adam Smith and David
Ricardo. Provide a detailed explanation of Ricardo’s Theory of Rent and compare it with Adam
Smith’s perspective.
15. Compare and contrast profit and rent as economic concepts. Discuss the meaning and types of
profit and explore the theories of profit proposed by Hawley, Knight, and Schumpeter.
16. Explore the Law of Diminishing Marginal Utility in depth. Discuss its implications for consumer
choice, market demand, and pricing. Include relevant real-world examples and diagrams to
support your explanation.
17. Provide an in-depth explanation of the Law of Equi-Marginal Utility. Discuss its application in
maximizing consumer satisfaction and its role in the concept of consumer equilibrium. Use
examples and graphical analysis to illustrate your points.