Group A

Attempt all the questions

1) What are the usages of microeconomics? 2
2) Make a list of properties of indifference curve 2
3) State one cause of diminishing returns in second stage of law of variable proportion 1

GROUP B

Attempt any three questions 10*3=30

1) i) State and explain the different types of microeconomics.
ii) State and explain the exceptions to law of demand

2) Given following demand and supply equation Qd = 100 − 5p , Qs=10+5p

a) Calculate equilibrium price and quantity and show it graphically
b) If the demand curve shifts to Qd = 200 − 5p then calculate new equilibrium price and
quantity.

3) i) Calculate the price elasticity of demand using point method at price =100 for the
𝑞
following demand curve 𝑝 = 300 −
2
ii) Explain Cobb-Douglas production function.

4) i) Explain consumers equilibrium on ordinal utility approach.

ii)State and explain the substitution effect.

GROUP C
Attempt any one question 15*1=15

5) State and explain the law of variable proportion with proper schedule and graphical
representation.

6) Suppose the income of Hari is 2000 and he is able to spend this income for good X and Y.
The prices of goods are rs.20 and rs. 50 respectively
a) i) Draw budget line of Hari
ii)If hari spends the income equally on X and Y what is the equation of the budget line ?
b) if the income of hari increased to rs.3000 , draw the new price line
c) if the income of hari decreases to rs.1500 then draw the new budget line