[BA 1st Sem Question Papers, Dibrugarh University, 2012, Economics, Major, Microeconomics - I]
1. Choose the correct answer: 1x8=8
- If a 3 percent increase in the price of a commodity causes a 6 percent decline in the quantity demanded of it, what is the elasticity of demand?
- Perfectly elastic.
- Inelastic.
- Elastic.
- Unit elastic.
- The consumer will be in equilibrium where there is a tangency between price line and indifference curve because at equilibrium point his MRS
- Is equal to its price ratio.
- Is falling.
- And price ratios are inversely related.
- Is greater than the price.
- The cross-elasticity of demand between petrol and automobile is
- Negative.
- Zero.
- Positive.
- Infinite.
- Which one of the following will not change the equilibrium price?
- Increase in demand.
- Decrease in demand.
- Increase in demand and equal increase in supply.
- Increase in demand and equal decrease in supply.
- The Engel curve for an inferior good
- Slopes upward.
- Slopes downward.
- Is a horizontal line.
- None of the above.
- The shape of Isoquants may be
- Convex.
- Linear.
- L-Shaped.
- Any one of the above.
- When marginal product is negative, total product
- Rises.
- Declines.
- Is negative.
- None of the above.
- The marginal cost curve intersects the average cost curve, where average cost is
- Maximum.
- Minimum.
- Rising.
- Falling.
2. Write short notes on any four of the following: (within 150 words each): 4x4=16
- Point elasticity and Arc Elasticity.
- Ridge lines.
- Fixed cost and Variable cost.
- Marginal rate of technical substitution.
- The law of equi-marginal utility.
Answer the following questions (within 500 words each):
3. (a) What are microstatics and micro-dynamics? Distinguish between the two approaches. 5+6=11
Or
(b) What is price elasticity of demand? Mention the factors on which elasticity of demand depends. 2+9=11
4. (a) Compare and contrast between the cardinal utility approach and the indifference curve approach of the theory of consumer’s behaviour. Which one do you consider superior? Justify your answer. 9+2=11
Or
(b) Explain why –
- An indifference curve for two normal goods is convex to the origin;
- Two indifference curves cannot cut each other. 6+5=11
5. (a) Using indifference curve analysis, show how price effect of a commodity is decomposed into income effect and substitution effect. 12
Or
(b) What is an Engel curve? Explain derivation of an Engel curve from an income-consumption curve. 2+10=12
6. (a) Explain the laws of returns to scale. 11
Or
(b) What is the difference between a production function and an Isoquants? Explain the law of variable proportions with the help of Isoquants. 3+8=11
7. (a) “Short-run average cost curve is relatively more U-shaped than a long-run average cost curve.” Justify. 11
Or
(b) Draw the short-run and long-run average and marginal cost curves and explain their relationship. 11
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