Professional Documents
Culture Documents
1. Assume that a software engineer alone writes 2 codes a day; two engineers write 5 codes;
three engineers write 10 codes; four engineers write 14 codes; five engineers write 17
codes and six engineers write 19 codes.
a) When does the law of diminishing returns begin to operate? (2)
b) What will be the optimal level of engineer if the salary of each engineer is Rs. 400/- (2)
and selling price of each code is Rs 100/-.
(2)
2. a) Explain the shortage and surplus in the market for a commodity.
b) While drawing a demand curve, some factors are kept constant. What is the effect on (1.5)
demand curve if there is a change in those factors?
3. Calculate the optimal input combination for a firm with demand function Q= LK-80L. (3)
Assume that the wage rate in the firm is Rs 600, the price of capital is Rs. 300 and the
tentative budget of the firm is Rs 60,000.
4. Suppose the demand and supply equations for coffee are as follows: where P is the price (2)
of coffee (in Rs.) and Q is quantity of coffee (in '000 kg).
QD--= 1000-100P
Qs=800+1000P
If the government wishes to subsidize coffee production by placing a floor on coffee
prices of Rs. 0.20 per thousand kg. What would be the relationship between the quantity
demanded and quantity supplied for coffee? Show diagrammatically.
7. What is perception? Briefly discuss the three significant determinants of perception. (2.5)