Test 1

1. Validity of Marshall’s equal marginal utility depends on the assumption of unitary elasticity of the
marginal utility curves of the commodities under the budget. Clearly explain this assertion. 


2. Examine the relationship between own and cross price elasticities for a compensated demand function.


3. What are backward-rising input supply curves? Illustrate with the help of suitable examples. 


4. The conventional analysis of profit maximisation breaks down if the entrepreneur sells his output and
possesses a production function which is homogeneous of degree one.


5. If firms produce differentiated products it is neither possible to identity the industry nor possible to draw
its supply curve. Discuss and show how Chamberlin handles the problem.


6. What is prisoner’s dilemma? How is it related to a strictly dominant industry?


7. What is meant by excess capacity? Why is it bad? Are there any benefits of the excess capacity
associated with monopolistic competition?


8. Under Bertrand price competition with homogenous products in an oligopoly demonstrate how is the
equilibrium price that will prevail arrived at?


9. What is Nash equilibrium? Do all games have Nash equilibrium? Can a game have more than one
equilibrium?


10. Define elasticity of goods substitution and distinguish it from cross-price elasticity of demand. Which
one is a better measure of substitution and why?


11. How did railways contribute to India’s economic development in the pre independence era?


12. Discuss the policy of discriminating protection and its impact on Indian industrial development during
the British period.


13. Discuss the process of ‘forced commercialisation’ of agriculture under the colonial rule. 


14. Discuss the manufacturing condition prevailed during pre independence period. Do you feel that private
sector did not come forward for investment due to fear of Nationalisation? Give reasons


15. How was the jute industry affected after partition? What remedial measures were taken to arrest its
decline?


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16. Give a critical account of the development of India during British Rule


17. Explain the ‘drain of wealth’ controversy in India in the 19th century.

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