IBS

Assignment 5
Course Code: SL EC 501 Instructor: Swati Pathak
Date:17/07/20
Marks: 25

Answer All the Questions.

Use diagram to answer questions.

1a. How is equilibrium achieved with the help of Indifference curve and budget line?
Analysis? (Use diagram).
b. State essential Conditions for utility maximizing equilibrium. 5

2 a. Define Budget line. 10

b. How does Budget line change if Money Income increases when other prices
remain constant. (Use Diagram)
c. what happens to the budget set if both the prices as well as the income double.

3. Fill in the blanks in the table below, which shows the relationship between quantity of labour
employed and total product, and then plot the values on the graphs provided. 10

Labour 0 1 2 3 4 5 6 7 8
Output(units) 4 5 8 12 15 17 18 18 17
MP
AP

b. Draw TP, MP and AP, where horizontal axis represents quantity of labor and vertical axis
presents TP, MP, AP. Draw in one graph and try to find out the relations.