2019
(December)
ECONOMICS
(Generic Effective)
Paper: GE-1
(Introductory Microeconomics)
Full Marks: 80
Pass Marks: 32
Time: 3 hours
The figures in the margin indicate full marks for the questions
1. Answer the following as directed: 1x8=8
a) The amounts of resources in an economy
1) Are fixed.
2) Never decrease.
3) Increase over time.
4) Are limited at any moment of time.
(Choose the correct option)
b) What is opportunity cost?
c) Law of demand shows the relationship between
1) Income and price of a commodity.
2) Price and quantity demanded of a commodity.
3) Quantity demanded and quantity supplied.
4) Price and quantity supplied of a commodity.
(Choose the correct option)
d) Consumer’s surplus is
1) The price of a consumer is willing to pay.
2) The cost of producing a unit of a commodity.
3) The profit made by a firm.
4) The difference between the price a consumer is willing to pay for the commodity and the price he actually pays.
(Choose the correct option)
e) When TR is maximum, MR is _________.
(Fill in the blank)
f) In short run a perfectly competitive firm will shut down, if P < AVC.
(Write True or False)
g) In a competitive labour market, the demand curve for labour is derived from
1) Marginal revenue product.
2) Total physical product.
3) Marginal physical product.
4) Marginal cost.
(Choose the correct option)
h) Why is demand for labour called derived demand?
2. Write short notes on any four of the following (within 150 words each): 4x4=16
a) Scarcity and choice.
b) Producer’s surplus.
c) Labour supply and savings decision.
d) Envelope curve.
e) Shifts in input demand curve.
3. (a) What is the importance of studying the subject of Economics? Discuss about the scope and methods of studying Economics. 3+4+4=11
Or
(b) What is economic model? Explain the economic model of price determination of a commodity. 3+8=11
4. (a) Define the concept of demand. Draw individual demand and market demand curves with the help of a hypothetical demand schedule. 3+8=11
Or
(b) Prepare notes on the following: 5+6=11
1) Consumer surplus.
2) Application of elasticity of supply.
5. (a) Diagrammatically explain the various properties of indifference curve. How does a consumer make choice of his optimum consumption of two goods? 6+6=12
Or
(b) Explain substitution effect and income effect in case of normal good and Giffen good. 6+6=12
6. (a) Explain the use of marginal revenue and marginal cost curves in determining the equilibrium of a firm. 11
Or
(b) Why is short-run average cost curve U-shaped? Explain the relationship among average total cost, average variable cost and average fixed cost. 3+8=11
7. (a) Explain the process of derivation of an input demand curve with the help of an example. 11
Or
(b) Explain how wage is determined in a competitive labour market. 11
***
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