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Reg No:___________________________ Name:_____________________________
RAJAGIRI SCHOOL OF ENGINEERING & TECHNOLOGY
(Autonomous)
B.Tech Degree Fifth Semester Supplementary Examination
(2021 Scheme)
July-2024
Course Code: 101908/ES900E
Course Name: INDUSTRIAL ECONOMICS AND FOREIGN TRADE
(Common for AE, EC, EE and ME)
Max.Mark:100 Duration: 3 hours
Part A
Answer All Questions
1 Derive marginal product of labour from the Cobb - Douglas Production
(3)
function .
2 State the difference between physical efficiency and economic efficiency. (3)
3 The long-run elasticity of oil demand has been estimated at - 0.5. If the price
(3)
of oil rises by 10%, how much will the quantity of oil demanded fall?
4 Define P/V ratio. (3)
5 Explain any three features of monopoly. (3)
6 What is Going-rate pricing? (3)
7 Differentiate between nominal national income and real national income. (3)
8 Differentiate between consumer goods and capital goods. (3)
9 List out any three components under current account. (3)
10 Mention any three non-technical measures adopted under non-tariff barrier. (3)
Part B
Each Question Carries 14 Mark
11 a) Suppose the annual output of W&B Co. producing leather bags can be
modeled by the production function where Q is the number
of millions of bags produced, K is physical capital measured in millions of
dollars, and L is labor measured in thousands of person-hours. If the factory (14)
has a workforce of 50 employees working an average of 2,000 hours per year,
calculate the contribution of labor. If W&B invests K = 20 million dollars in
the factory, what is the total number of bags produced? Calculate the
Marginal rate of technical sustitution between labour and capital when K= 20
and L= 50.
b) Distinguish between forward linkages and backward linkages.
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OR
12 a) State any three properties of Cobb Douglas Production Function and solve
the following: , if L=10, K=15, how much output is
produced? At these input levels, what is MPL and MPK? What is the (14)
Marginal Rate of Technical Substitution at these input levels? Interpret the
results.
b) Contrast responsive engineer with the creative engineer.
13 a) Explain the break-even analysis with the help of a diagram and dicusss the
(14)
following: a) Loss, b)Profit, c)Break-even point and d)Margin of safety.
b) Suppose the fixed expense of the firm run by Mr. Homer Simpson includes
rent Rs.20000 and, interest payment Rs.8000. It produces note books and
sells it at a price of Rs.30. If the average variable cost per note book is Rs.20,
estimate break-even level of output and the profit earned when it sells 4000
note books. Estimate the margin of safety when it sells 4000 note books.
OR
14 a) Draw a diagram and explain AC, AFC, AVC and MC. (14)
b) Patrick Star is a window cleaner. He has calculated his annual fixed costs
to be Rs. 5000. Naveed charges each household Rs.100 on average for
cleaning their windows. His variable costs are Rs.35 per house (including
water, detergent and petrol). Calculate the number of houses Patrick Star
needs to clean the windows in order to breakeven. Calculate the contribution
and the Margin of safety, if Patrick Star cleans the window of 3500 houses in
a month.
15 a) Explain any four different kinds of markets along with their features.
(14)
(8 marks)
b) Why in the oligopoly market a price change can result in a kinked demand
curve? (6 marks)
OR
16 a) Explain monopolistic competition along with its features. (5 marks) (14)
b) Explain the equilibrium of a firm earning normal profit under monopolistic
competition. (9 marks)
17 a) Differentiate between i) stock and flow ii) final goods and intermediate
(14)
goods iii) capital goods and consumer goods with help of an example.
b) Explain in detail the three sectors of an economy.
OR
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18 a) What are the different monetary and fiscal policies adopted in the economy
(14)
to control inflation? (9 marks)
b) What are the different types of inflation? (5 marks)
19 a) What are the arguments against protectionism?
(14)
b) Define Tariff and explain the effect of tariff upon international trade.
OR
20 a) What are the arguments for protectionism?
(14)
b) Define BoP and explain the components under BoP.
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