NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Business Economics
Internal Assignment Applicable for April 2019 Examination
Assignment Marks: 30
1. What are the important characteristics of an indifference curve. Suppose a consumer’s
disposable income is Rs. 5,000/- per week and she has a choice of spending the income
on concerts and meals. Assume meal is available for Rs.250/- each and concerts are
available for Rs.500/- each. Prepare a table of possible combinations of meals and
School for Continuing Education (NGA-SCE)
Course: Business Economics
Internal Assignment Applicable for April 2019 Examination
Assignment Marks: 30
1. What are the important characteristics of an indifference curve. Suppose a consumer’s
disposable income is Rs. 5,000/- per week and she has a choice of spending the income
on concerts and meals. Assume meal is available for Rs.250/- each and concerts are
available for Rs.500/- each. Prepare a table of possible combinations of meals and
concerts that could be bought with the income. What is your
observation about the values
in the table? (10 Marks)
2. Find below the data for price elasticity and income elasticity of demand for 5 different
commodities. Interpret the values in the table in the light of
· Whether the demand is elastic or inelastic for each of the commodities and why
· What do you mean by negative income elastic demand in case of commodity 3
· Give example for each type of commodity.
in the table? (10 Marks)
2. Find below the data for price elasticity and income elasticity of demand for 5 different
commodities. Interpret the values in the table in the light of
· Whether the demand is elastic or inelastic for each of the commodities and why
· What do you mean by negative income elastic demand in case of commodity 3
· Give example for each type of commodity.
|
Commodity
|
Price Elasticity of
demand |
Income elasticity
of demand |
|
1
|
-0.3
|
+0.6
|
|
2
|
-1.45
|
+5.60
|
|
3
|
-5.09
|
-1.67
|
|
4
|
-0.7
|
+0.8
|
|
5
|
1.0
|
+1.0
|
(10 Marks)
3 a) “Different prices can be charged by the producer in the different market segments to
maximize revenue.” Explain the statement by taking a case of aviation industry.
(5 Marks)
3 b) What do you mean by price rigidity? Which type of market structure is characterized
by the price rigidity? Explain your views taking an example of industry facing the
problem of price rigidity. (5 Marks)
***************
3 a) “Different prices can be charged by the producer in the different market segments to
maximize revenue.” Explain the statement by taking a case of aviation industry.
(5 Marks)
3 b) What do you mean by price rigidity? Which type of market structure is characterized
by the price rigidity? Explain your views taking an example of industry facing the
problem of price rigidity. (5 Marks)
***************
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