What is indifference curve? What are its properties? Explain.[10]
2.
Let us suppose a consumer has fixed income of Rs.2000. He selects two goods X and Y for consumption having prices with Rs.400 and Rs.200 respectively. a. Derive budget line. b. Show his equilibrium point when he allocates entire budget equally on two goods.[5]
Costs and Revenue
1.
Consider the following cost schedule: a. Compute TFC, AFC, AVC, MC and AC. b. Graph AC and MC and explain the relationship between AC and MC.
Define price elasticity of demand. Discuss the various types of price elasticity of demand with diagrams.[10]
2.
Consider the following table: Find the price elasticity of demand for movement from points A to C and C to A by proportional method. Compute the price elasticity of demand at the mid way between A to C and C to A by arc method.
Discuss the government intervention in market through price floor, price ceiling and tax effect.[5]
Economic Issues and Concepts
1.
Write short notes on scarcity and choice.[5]
2.
Explain the features of free market economy.[5]
Macroeconomic Policies
1.
What are the instruments of monetary policy?[5]
Market Structure
1.
What is a perfect competition market? How the price and output are determined under it in the short run?[10]
National Product and its Measurement
1.
Calculate Gross Domestic Product (GDP) and National income from the following data:
S.N.12345678910ItemsPersonal Consumption ExpenditureIndirect tax less subsidiesGovernment consumption and investment expenditureChange in business inventoriesGross Private domestic fixed investmentExportsNet factor payments to the rest of the worldImportsDepreciationForeign investmentRs. (in Millions)65001502500100950900−1001200200250
[5]
Production
1.
Explain the condition for optimum employment of two variable inputs.[5]