Sample Question Format

(For all courses having end semester Full Mark=50)

KIIT Deemed to be University

Online End Semester Examination(Spring Semester-2021)

Subject Name & Code: ENGG ECONOMICS Applicable to Courses:

Full Marks=50 Time:2 Hours

SECTION-A(Answer All Questions. Each question carries 2 Marks)

Time:30 Minutes (7×2=14 Marks)

SECTION-B(Answer Any Three Questions. Each Question carries 12

Marks)

Time: 1 Hour and 30 Minutes (3×12=36 Marks)

Question Question CO
No Mapping
(Each
question
should be
from the
same
CO(s))
Q.No:8 (a) CO2, CO3
(i) Demand for lamborginin will increase
(ii) Sales will increase by 56 percent
New sales=156000 nos.
(iii) Demand for cars will decrease by 36 percent

(b)
(i) equilibrium
P = 80
Q = 1260
(ii) revised supply is
Q = 1000 + 2P
revised
P = 100
Q = 1200
(iii) The consumer is more elastic as he will pay $20 out of the total GST of $50.
Diagram with the help of demand and supply curve.
(a) Q = 14000 - 3P + 3Y
P = 100, Y = 2500
then Q = 21200
(i) ep =

ey =
(ii) Since the ep<1, the company should increase the price.
(iii) Less than proportionately because ey<1.

(b)
(i) P = 100 - 0.1Q
TR = 100Q - 0.1Q2

(ii) MR = 100 - 0.2Q

= 100 - 0.2 500
=0
(iii) When MR +ve, e>1
When MR -ve, e<1
(a)
(i) Q = 2600 - 2P
P = 50, Q = 2500

It is less elastic, price can be increased.

(ii) P = 100, Q = 2400

Since e<1, there can be further increase in the price.

(iii) New supply equation
Q = 1000 + 4P
Supply will decrease
S1
y
S
P
S1
S
0 x
Q.S
(b)
(i) 1000 = 10X + 20Y
y

Good Y
50

0 100 x
Good X
 (ii) y

He should be on the budget line.

(iii) U = X0.5Y0.5
budget constraint
2000 = 10X + 20Y

Q.No:9 (a) CO2, CO3,

CO4

(i)

(ii) APL = 50L - L2

(iii) MPL = 100L - 3L2

Maximum output
Q = 50L2 - L3
= 55,555.5554 - 37037.0369
=18518.5185 units

(b)
(i) CM = 100 - 50 = 50

(ii)
(iii)
Graph for BEP and MOS.
(a) P = 160 - 0.0025Q
C = 15Q + 0.0025Q2
(i) TR = 160Q - 0.0025Q2
MR = 160 - 0.005Q
MC = 15 + 0.005Q
MR = MC
145 = 0.01Q
Q = 14500 units
P = 108.75
(ii) Profit = TR - TC
= 1051250
(iii) Diagram to show the profit of the monopolist.

(b)
(i) AVC = 100 - 15Q + Q2
TVC = 100Q - 15Q2 + Q3

(ii) AC = AFC + AVC

= 50 + 100 - 15Q + Q2
= 150 - 15Q + Q2

(iii) Diagram to show the relation between MC and AC.

(a)
(i) MC = 10 + 32Q
MR = 80
10 + 32Q = 80
Q = 2.1875
(ii) Profit = TR - TC
80Q - 36 - 10Q - 16Q2
175 - 36 - 21.875 - 76.5625
175 - 134.4375 = 22.5625
(iii) Diagram to show the profit condition.

(b)
(i) Q = L.75K.25
w = 150 r = 50
 The firm uses same amount of L & K.
(ii) 20000 = 150L + 50K
L = 100, K = 100
Diagram for the equilibrium condition.
Q.No:10 (a) CO4, CO5,
(i) NPV (14%) CO6

(ii) He will get less than 14% return

(iii) No, I will not advise my friend to accept the proposal.

(b)
(i) Cash flow diagram
(ii) Costs

Benefits

(iii) Since benefits are more than the cost the machine may be purchased.
(a)
(i) Cash flow diagram
(ii) NPV (17%)

NPV (18%)

By interpolation
IRR = 17.42347806
NB: Students might have tried at different percentages.
(iii) Sudarshan will get positive NPV value sine IRR is more than 13.75%.
 (b)
Year Annual depreciation Book value
0 0 400000
1 100000 300000
2 75000 225000
3 56250 168750
4 42187.5 126562.5
5 31640.625 94921.875
6 23730.4688 71191.4062
7 17797.8516 53393.5546
8 13348.3887 40045.1659

(ii) No, the salvage value is not maintained in the record.

(a)
(i) Costs

Benefits

B/C ratio = 1.056745252

(ii) Since B/C ratio is greater than 1, the govt. may invest in this project.

(b)
(i) P = 300000
SV = 30000

Year Net depreciation Book value

0 0 300000
1 21951.76717 278048.2328
2 24585.97923 253462.2536
3 27536.29674 225925.9569
4 30840.65235 195085.3046
5 34541.53063 160543.774
6 38686.5143 121857.2597
7 43328.89602 78528.36368
8 48528.36354 30000.00014

(ii) Yes the salvage value is maintain in the record.

Q.No:11 (a) CO4, CO5,
 Demand-Pull and Cost-Push inflation with diagram CO6
 Opinion on fuel inflation in India

(b)
(i) Define GNPMP.
GNPMP = GDPFC + NFIA + NIT
= 5000 + 2000 + 100
= 7100 crore
 (ii) Define NDPFC.
NDPFC = NNPMP - NFIA - NIT
= 7000 - 1000 - 300
= 5700 crore

(a) Suggest and explain monetary measures to combat inflation.

(b) (i) Define GDPMP

GDPMP = NNPFC + Depreciation - NFIA + NIT
= 10000 + 500 - 500 + 200
= 10200 crore
(ii) What is National Income?
NNPFC = NDPMP + NFIA - NIT
= 6000 + 1500 - 200
= 7300 crore
(a) Suggest and explain the important fiscal measures which can help the
government for controlling inflation in an economy.

(b) (i) Define GDPMP.

GDPMP = GNPFC - NFIA + NIT
= 9000 - 4000 + 500
= 5500 crore
(ii) Define GNPFC.
GNPFC = NDPMP + Depreciation + NFIA - NIT
= 8000 + 300 + 2000 - 500
= 9800 crore

NB: Examiners kindly verify the answers before starting the evaluation.