Documente Academic
Documente Profesional
Documente Cultură
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Mention the circular flow of income w.r.t. product and factor markets.
(9)
(10)
(11)
(12)
2006
2008
2010
(2)
LONG QUESTIONS
(1)
(2)
a)
b)
a)
b)
How can the PPC be used to address the three central problems
of the society ?
(3)
(4)
(5)
(6)
a)
b)
a)
b)
a)
b)
(7)
(8)
(9)
2007, 2008
(10)
2007
(11)
2009
(3)
Ch. 2
Basics of demand and supply
SHORT QUESTIONS
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
Explain the idea of price elasticity of demand. Why does the formula
have a negative sign ?
(22)
(23)
(24)
Find out the slope of the demand curve when the demand curve is (i)
vertical (ii) perfectly horizontal
(25)
(4)
(26)
(ii)
(27)
(28)
(29)
(30)
(31)
(32)
(33)
(34)
b) advalorem Tax
(35)
(36)
(37)
(38)
(39)
2006
If excise tax on cars is expected to fall what will happen to the current
market demand for cars ?
2006
(5)
(40)
For a giffen good, the demand curve is positively sloped. True or false?
Justify
(41)
2006
The slope of the demand curve and the price elasticity of demand are
identical concepts. True or false ? Justify
(42)
2007
All giffen goods are interior but all inferior goods are not giffen.
Explain
2007
(43)
Shaw that two goods cannot be inferior in a two commodity world. 2007
(44)
(45)
2007
2008
(46)
(47)
Show ed varies from zero to infinity along a linear demand curve 2009
(48)
(49)
(i)
(ii)
2008, 2009
2009
2010
(6)
LONG QUESTIONS
(12)
a)
Define demand.
b)
c)
curve.
(13)
a)
b)
How can one derive the market demand ? Explain the idea by
using the desirable assumptions.
(14)
Explain the idea of shift in demand. What are the factors affecting the
shift in demand ?
(15)
(16)
(17)
(18)
(19)
(7)
(20)
(21)
(22)
(23)
Let a supply and a demand curve be given. In this regard, discuss the
possible effects when
a) Only supply rises, demand remains unchanged.
b) Only demand rises, supply remains unchanged.
c) Both demand and supply rise.
(24)
(25)
(8)
(27)
(28)
(29)
(30)
(31)
(32)
(33)
(9)
(35)
(36)
(37)
a) If a specific tax is imposed show that for the buyer the price rises,
for the seller the price falls.
b) Consider a competitive market for wheat. What would be the
impact of a price support programme (price floor) on the quantity
demanded and supplied. Do you think that price support is
responsible for over production ?
(10)
2006, 2009
(39)
(40)
2007
a) Shaw that the price elasticity of demand will vary between zero to
infinity for a straight line demand curve.
b) Consider two parallel demand curves. Comment on the price
elasticity of demand of the demand curves at the same price.
(41)
2007
2008
(42)
2008
(43)
Show how the share of the tax paid by the buyers depends in price
elasticity of demand & supply
(44)
2009
(11)
(45)
(46)
2010
NUMERICAL QUESTIONS
(1)
At price 14, two units are demanded. The slope of the demand curve
is 3. Find the equation of the demand curve.
(2)
(3)
(4)
(5)
A market has two consumers where they demand q1and q2, such that
q = q 1 + q2 .
a) Find out the price elasticity of market demand.
b) What happens if there are n consumers ?
(6)
(7)
(12)
(8)
(9)
(10)
From the given table, comment whether the goods are substitutes or
complements.
(11)
px
qx
Py
10
12
P
C
A
x
values at x, y.
(12)
values at x, y.
q
B
P
C
A
x
(13)
(13)
(14)
Show that the sum of own price elasticity of demand, cross elasticity
and income elasticity is equal of zero.
(15)
1
Xp
slope of demand curve
(17)
2006
(14)
(18)
(19)
(20)
2009
(22)
2008
(21)
2007
2010
(23)
2010
Qd = 100 0.04p
Qs = 40 + 0.02p.
Determine the rental price (p) and the number
of apartments rented.
2010
(15)
Ch. 3
Production
SHORT QUESTIONS
(50)
(51)
(52)
(53)
(54)
(55)
(56)
(57)
(58)
(59)
(60)
(61)
(62)
(63)
(64)
(65)
(66)
When APL falls, MPL must be below it. True or false ? Justify
2006
(16)
(67)
The average and marginal products are equal when average product
maximum
(68)
If w = r and MPL > MPK, is the firm operating efficiently ? Why or why
not ?
(69)
2007
2007
In the law of variable proportions, which stage will the producer select
for production ?
2007
(70)
2008
(71)
The Marginal product curve intersects the average product curve at its
maximum point. Explain
2009
(72)
2009
(73)
2009
(74)
(75)
2010
(17)
LONG QUESTIONS
(47)
(48)
a)
b)
a)
b)
(49)
a)
(50)
b)
c)
a)
b)
(51)
(52)
(53)
Show that output maximization and cost minimization for a firm would
give us the same answer
2007
(54)
2009
(55)
2006
(18)
(56)
a)
b)
(57)
(58)
2006
Trace out the difference between returns to scale and returns to the
variable factor.
(59)
2008, 2010
2007
2010
(19)
NUMERICAL QUESTIONS
(24)
(25)
(26)
(27)
(28)
(29)
(30)
(20)
(31)
(32)
b) q = K L
K+L
c) q = K2 + L2
The production is
q = K0.8 L0.4, w = 8, r = 16 and C = C,
Find equilibrium values of K,L.
(33)
2006
2007
(34)
2008
(35)
(36)
2009
(37)
2009
2010
(21)
Ch. 4
SHORT QUESTIONS
(76)
(77)
(78)
(79)
(80)
(81)
(82)
(83)
(84)
(85)
(86)
(87)
(88)
(89)
Explain why AC and AFC come closer and closer to each other as
output rises but they never meet ?
(90)
Define marginal cost. Show that it is the mirror image of the MPL curve.
(91)
(92)
(93)
(94)
(22)
(95)
(96)
(97)
(98)
(99)
(100) Explain the idea of the learning curve and state its significance.
(101) Explain briefly as to why a learning curve is useful to the firms.
(102) All products show learning curve effect. True or false ? Justify.
(103) State whether existence of excess capacity is necessary for exhibiting
economies of scope.
(104) Explain the idea of economies of scope in purchasing and mention its
significance.
(105) State the measure of economies of scale and scope in advertising and
state its use.
(106) What is the use of economies of scale & scope in R. & D ?
(107) Define cost reduction strategies. How is it different from cost control
methods ?
(108) State the elements needed for a successful cost reduction strategy.
(109) Mention four advantages and disadvantages of cost reduction strategies.
(110) Explain the idea of BE analysis.
(111) State the significance of contribution margin.
(112) Trace out how can the BE output can be expressed in terms of sales.
(113) State the concept and significance of operating leverage.
(23)
(114) If a firms long run average cost curve (LAC) is horizontal, what can you
say about the long run marginal curve (LMC) ?
2006
2006
2006
(117) Show MC = w .
MPL
2007
2008, 2009
2009
2010
2010
2010
(24)
LONG QUESTIONS
(60)
(61)
(62)
(63)
(64)
(65)
a)
b)
c)
a)
b)
c)
a)
b)
c)
a)
b)
a)
b)
(66)
(67)
a)
Define MC
b)
a)
b)
(25)
(68)
(69)
a)
b)
a)
Distinguish between short run and long run w.r.t. the costs of a
firm.
(70)
b)
a)
Trace out the method of deriving the long run average cost
curve.
b)
(71)
(72)
(73)
The learning curve reflects the efficiency gains resulting from the
cumulative total of all output produced till date Elucidate.
(74)
a)
b)
(75)
(76)
a)
b)
c)
a)
b)
(77)
(78)
a)
(26)
(79)
b)
a)
break even
analysis.
b)
Show that as variable cost rise, the breakeven output will also
rise.
(80)
2006
(81)
2006
(82)
2007
(83)
a)
b)
(84)
(85)
2009
2009
(86)
c) Derive the LAC from the short run average cost curves.
2010
2010
(27)
NUMERICAL QUESTIONS
(38)
AFC is given as 10 Find the slope of AFC when 10 units are produced.
q
(39)
(40)
(41)
Maruti produces 10,000 cars per month, its long run total cost is
Rs.150,000,000. If it produces 10,500 cars per month, its long run total
cost
is
Rs.227,500,000.
Does
Maruti
exhibit
economies
diseconomies of scale ?
(42)
or
2006
The fixed cost is Rs.10,000, the price per unit is Rs.100, the variable
cost per unit is Rs.75. Find BE output.
(43)
(44)
2009
Calculate BE output if
Variable cost per unit = Rs.12, fixed cost = Rs.60000, selling price
per unit = Rs.18.
2009
(45)
(46)
(47)
(28)