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                                             Business Economics

1.       (a) Discuss the nature and scope of business economics.

                                                        Or

        (b) Explain the concept of income elasticity of demand and mention its practical significance.


2.    (a) Explain the law of variable proportions with diagram.

                                                        Or

        (b) Explain the internal and external economics of large-scale production.


3.    (a) Discuss Cyert-March hypothesis of Satisfying Behaviour as an objective of modern business firms.

                                                        Or

        (b) Write the features of perfect competition. Explain the process of price-output determination, under perfect competition in the long-run.


4.    (a) Explain the process of wage rate determination in a perfectly competitive labour market.

                                                        Or

        (b) Discuss the Ricardian theory of rent determination and mention some of the criticisms of the theory.


5.    (a) Discuss the Loanable Fund theory of interest. Is it an improvement over the Classical theory of interest?

                                                        Or

        (b) Distinguish between normal profit and supernormal profit. Explain Schumpeter’s Innovation theory of profit.

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