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1.       What do you mean by elasticity of demand? Give a brief idea about the various factors that affect price elasticity of demand. Mention the importance of income elasticity of demand in business decision.


Explain the concept of cross elasticity of demand with the help of suitable example and diagram. What is the practical usefulness of the concept?                                                                                                           


2.   2. Explain with example the law of variable proportion. In which stage output is decided?                 


              What do you mean by internal and external economics? Explain the different factors responsible for internal economics.                                                                                                                                                        


3.   3.  What are the characteristics of perfect competition? Explain with the help of diagram the determination of normal price under perfect competition.                                                                                                             


              Explain with diagram how price and output are determined under monopoly.                                   


4.   4.  Give the meaning of real wage and money wage. Explain with suitable diagram about determination of wage rate under perfect competitive market.                                                                                        


   Give the meaning of Quasi-rent. Mention two similarities of rent and quasi rent. "Rent as a price for the use of land, like other factor prices, is determined by the demand for and supply of land”. Discuss.

5.  Explain the classical theory of interest and point out its limitations.                                          


   What are the natures of profits? Explain the various elements of gross profit. Assess the risk-bearing theory of profit.                                                                                                                                                          





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