a. What is break-even analysis? Describe with a graph. (Marks:5+5=10)

b. What do you understand by income-elasticity of demand for a commodity? Explain with example.

c. It has been learnt that the output of rice will drastically fall in the next harvest season. Show what will be the impact on price and supply of rice into the market with the help of a graph. Describe briefly. (Marks: 5).

d. How would a drastic rise in the occurrence of Diabetes affect the demand for Sugar in the country? (Marks:5)

e. Suppose that the advertising elasticity of the demand for Moon brand cigarettes is 1.30. If the manufacturer raises advertising expenditure by 5%, by how much will the demand change? Show only calculations. (Marks: 5).

f. Coopers Limited can produce Pastry Cake and generate yearly revenue of Taka 20 million for a total cost of Taka 15.92 million. Alternatively, it can produce high quality Biscuits and, thereby, generate yearly revenue of Taka 35 million for a cost of Taka 29.70 million. What is the opportunity cost of producing Pastry Cake instead of Biscuit? (Marks:5)

g. Internationally famous manufacturers of tyres such as Dunlop and Goodyear mix natural and synthetic rubber in a certain ratio to produce automotive tyres. If the elasticity of the demand for natural rubber with respect to change in the price of synthetic rubber is negative, state if the two types of rubber are substitutes or complimentary in nature. Explain briefly. (Marks: 5).