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    B COM (HONS) I PAPER III-MICROECONOMICS THEORY & APPLICATION-I

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    13 views12 pages

    B Com (Hons) I Paper Iii-Microeconomics Theory & Application-I

    Uploaded by

    Rijak Bhatia

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 12
    [This question paper contains 12 printed pages.] 662 Your Roll No. . B.Com. (Hons.)/1 Cc Paper II] - MICRO-ECONOMIC THEORY AND APPLICATIONS - I (Admissions of 2004 and onwards) Time ; 3 Hours Maximum Marks; 75 (rite your Roll No. on the top immediately on receipt of this question paper.) Note :- Answers may be written either in English or in Hindi; but the same medium should be used throughout the paper. Ze WT-UF BT IK Haat a Best fadt vn ae Gary, aa weit gerd wr wer yar et Bh Tee) Note :— The maximum marks printed on the question paper are applicable for the candidates registered with the School of Open Learning for the B.Com, (Hons.). These marks will, however, be scaled down proportionately in respect of the students of regular colleges, at the time of posting of awards for compilation of result. P.T.O. 662 2 a wad 7 afer yokes “wager atte site afar’ a at aie (sited) F rda-aea oral we fore mer #1 Rafer Prenat & fre sr arent ser eager galeteeor wienacr dar aed wre Rear area | All questions are compulsory. All questions carry equal marks. 1. (a) With the help of diagrams, distinguish between an increase in the demand for a good and an increase in the amount demanded. What factors are associated with each of these movements ? (3,2) (b) From the market demand schedule given below, calculate the price elasticity of demand for a movement from (i) F to H (ii) H to F (iii) midway between F and H. (2,2,1) Point | Aj B | Cc| bp ]FI[c [a Price 7 6 5 5 | 3 2 1 Rs. Rs.) Qty | 500 | 750 | 1250 | 2000 | 3250 | 4750 | 8000 (Gms) 1. (c) When a supply curve is a positively sloped straight line, prove that if it crosses the price axis, then all along the line, elasticity of supply, e,, is greater than one, (5) 662 3 OR (a) “The ability to substitute away from a good increases with the narrowness of its definition.” Explain this statement with an example. (5) (b) From the table given below, calculate the cross elasticity of demand between X and Y. What is the relationship between the two goods ? (5S) ' Commodity Before After ' | Price Qty Price Qty \ (Rs‘Unit) | (Unit’Week) | (Rs/ Unit) 100 1s 300 30 (c) Prove that the change in revenue has the same sign as the change in price when the own- price elasticity of demand, e,,, is less than xx? one and has the opposite sign when e,, is greater than one. (5) (&) stat ft warren & Tq SF fay ain A gfe ah ah TE aft % gfe % oe aa) Tr UR FS de a waft arent at aay | (@) ara ait St A A ae aR SB (i) FAH; (ii) H @ FF; (ii) F aR AS ao Tew aD SF fee ain ait dha cha ar aftnert afer 1 P.T.O. fg | aA} BC ara | 7 uF wrt =| 500) 750 | 1250 (a) ve ward am ones © H geet Mh tar A, Re Aire f ae ze diva ae A ale Sat tt tas aa wrt — wag a chy, o, TH t after 21 aaa (m) “qa Reams A area, saat vere st Maa S wa ae wea 21" gee Fae we He Th aT ator 1 (a) 4a & ws afar 3 xX att YS fa in at wa cts a oftaat Afe 1 A aqait SB ate am aay 2? Wy weet ae # ara (e aT she HAT af ae) | Penta | vt aR) | Raft ae) wae) xX 100 15 100 | Y 300 30 200 40 (1) fee afar fs Tort F afta ar fer ae eter 2 a ita Yo uftads an, we ae Sh ait St aa ae, « wa 8 oa at 2 atk gaat fate fer alate e,, wea o afm eat 21 662 5 2. (a) What is an economic “bad”? Draw a set of indifference curves in which one of the commodities is an economic “bad” and the other an economic “good”. Explain the shape of these indifference curves. (2) (b) A consumer pays Rs. 10 for the first 5 units of a good but only Rs. 5 for all subsequent units. If her weekly income is Rs. 100, what will be the shape of her budget line ? Explain with the help of a diagram. Q) {c) From the table given below calculate the income elasticity of demand, e,, between points (i) A and B (ii) D and F and (iii) H and L. Classify the good between each pair of points (3,3,3) Draw the Engel curve from the data given below. qd) ! Income (Rs. Year) » Quantity 390 | 350 | 250 (Kg/Year) " | 200 | 300 (a) A consumer’s budget line relating goods A and B has intercepts of 50 units of A and 20 units of B. If the price of good A is Rs. 12, calculate the OR following : (i) The income of the consumer (ii) The price of good B P.T.O. 662 6 ii) The slope of the budget line (1,1,1,) (b) Why are intersecting indifference curves inconsistent with rational choice ? (2) (c) Explain the concept of the equilibrium of the consumer. Why is the consumer not at equilibrium at points where the indifference curve intersects the budget line ? (4,6) (a) gifts caua’ aq aan ent 2 ? aia wat Few az A ahr Pek wat FA vw ais aca’ sh gat afte (geht! 21 ge oft aah St weet SY ooeAT aahare 1 (a) we anten wa aq at yee 5 wRe S fay oe ta 2 vg at wt get S fay Aaa 5 ota 21 ae gaat arenes ara 100% 2 at seat gore Ver at wert an at? aa st wee 8 carer aif) (m1) 48 -& v8 anftrar @ faz (i) A atk B; (ii) D ait F (ii) Hoa L & ata air at ona ay, car tear Ate | Agi Fw we F te ay a Aisa aalfarg 1 a fe ag wer & wie an Gif: fag A |B |C {DF sa (& | 4,000 | 6,000 | 8,000 | 10,000 | 12,000 } 14,000] 16,000 wa ad) Wal (fear aft ad 18,000) 100 | 200 | 300 | 350 350 | 250 662 7 waa (&) A ak B ayat a aafda oH St ao tar FA at 50 gel sk B at 20 qmet A amen 21 af, aq AH ais 12% Ba Reefs a staat miter : (i) soi A are (i) Bq A Ore (ii) He Va HT seat (a) wae grftarr am, waa Tae Has aims HAS (a) sata & ager A dae Sh omer Fife | Fa aren? f anita oa gat a dae F seh wee wet gaia ae aac ter ar wfaeSet Greet 21 3. (a) What is an inferior good ? Show the income and substitution effects of a rise in the price of an inferior good, Is the law of demand violated in the case of such a good? (2,7,1) Note : The examinee is not required to discuss the case of the Giffen good. (b) What is the Price-Consumption Curve (PCC) ? Derive the consumer's demand curve from the PCC. (3,2) OR P.T.O, 662 8 (a) Use the concept of income elasticity of demand to define a normal good. Does the consumer consider a good to be normal under all circumstances ? Give reasons for your answer. Show the income and substitution effects of a fall in the price of a normal good. (2,1,7,) (b) Explain with the help of diagrams why a consumer in general prefers a lump-sum subsidy to an excise subsidy. (5) (=) “Rerata seq’ sar eta 2? Pevetta weg at aaa F gfe A aa ait erearra ware at velit shire | aT ain & ar ar MH aq S aa F sector Har 21 focqoh: vterét a fet aq @ Ha at fata Ae wet 31 (@) Axara wR (PCC) wa aan #7 PCC BS ove Soa am a Gert afer : waa (&) aera ag St aforn eet % fag ait a ora —ara St emer ar waht sifary | sen TaN ah afeReataa a aay A ara aaa 3? eA Te A fare wT ST ara aq at give 4 fieae & ara ait wars wera at wafer atfory 662 9 (a) ately At wee @ nen ata fa Rea aren araras. "yee SIN Serer Bree B Ue ya HY WHE HET 31 4. fa) What are the relationships between Total Product (TP), Average Product (AP) and Marginal Product (MP)? Using these relationships, show the three stages of production. In which stage will the rational producer function ? (6) (b) Given MP, =3. Py=l, MP,=6 and P,=4, is the firm employing the cost-minimizing combination of capital and labour? If not, what should the firm do? Q) What are economies of scale ? Distinguish between {c learning and economies of scale (3,3) OR With the help of diagrams show the relationships between Average Total Cost (ATC), Average Fixed Cost (AFC), Average Variable Cost (AVC) and Marginal Cost (MC} in the short-run. How is MC related to Marginal Product of Labour (MP,)? (6) (a (b) Show that in a Cobb-Douglas production function q={(x, y) = Ax*y'", where A and @ are positive constants and 0

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