Subject Code: PME1A Paper: Micro Economics Specific Instructions:

Answer all the five questions. Marks allotted 100. Each Question carries equal marks.

Word limit is 250-300 words

General Instructions:
The Student should submit this assignment in the handwritten form (not in the typed format) The Student should submit this assignment within the time specified by the exam dept Each Question mentioned in this assignment should be answered within the word limit specified The student should only use the Rule sheet papers for answering the questions. The student should attach this assignment paper with the answered papers.

Failure to comply with the above Five instructions would lead to rejection of assignment.

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Question No1 a)What do you understand by the Law of Equi-Marginal Utility? b)Prove that the demand curve slopes downwards? How would you determine the Long run average cost and the Long run Marginal cost from the short term cost curves? c)What are indifference curves? List 3 properties and explain with example. Question No2 a) How would you explain the Diamond water paradox? b) When marginal cost falls, it always pulls the Average cost downdo you agree? Elaborate c) Depict the following on a single short term costs graph; AFC , MC , AC & AVC. Where do the AC and MC curve always intersect? Also discuss how the cost function is a mirror image of the production function curves. Question No3 Differentiate between monopoly and monopolistic competition ,giving current examples from the industry. Question No4

What do you understand by consumer equilibrium? How does price change in a particular commodity affect the consumer behavior? Question No5 Explain the concept of elasticity ,MR and TR and the relationship among the three?Illustrate it with the help of an example.