University of Delhi 2010-1st Year B.Com (Hon.) Marketing Management (HONS) MICRO- ECONOMIC THEORY AND APPLICATION UNIVERSITY - Question Paper
Micro Economic Theory and Application
This question paper contains 16+2 printed pages]
Your Roll No 3i'Rhl
6003
B.Com, (Hons.)/I J
I Paper IIIMICRO-ECONOMIC THEORY AND I APPLICATIONS-I
(Admission of 2004 and onwards)
Time : 3 Hours Maximum Marks 75
t
TO : 3 : 75
(Write our Roll No on the lop 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
# #TT T%TT I 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
Attempt All questions Marks are indicated against each question
*
1. (a) Calculate cross elasticity of demand between
coffee (X) and tea (Y) from the following data and comment on the relationship between the two goods : 5
|
Before |
After | |||
|
Price |
Quantity |
Price |
Quantity | |
|
(RsVUnit) |
(Unit/month) |
(RsAJmt) |
(Umt/month) | |
|
Coffee' (X) |
20 |
40 |
20 |
50 |
|
Tea (Y) |
40 |
50 |
60 |
30 |
Or
From the two demand schedules given below, determine if these are elastic or inelastic using
only the total expenditure criterion 5
|
Price |
Quantity of X |
Quantity of Y |
|
1 |
320 |
1200" |
|
2 |
200 |
500 |
|
3 |
150 |
325 |
|
4 |
* 120 |
225 |
|
5 |
110 |
160 |
|
6 |
105 |
100 |
(6) Prove that any straight line supply curve passing through the origin has value of elasticity of supply equal to one 5
Or
Prove that weighted sum of cross-price elasticity of demand and own-p nee elasticity of demand equals one. 5
(c) Using Samuelsohs revealed preference analysis prove that price and quantity demanded for a normal commodity are inversely related 5
Or
Explain Hicksian consumer surplus with the help of indifference curve technique 5
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A TC<J3fi #1 R fecqnfT
|
*1 | ||||
|
ma |
w* |
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|
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|
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50 |
|
. (Y) |
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50 |
60 |
30 |
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|
* i |
320 |
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|
2 |
200 |
500 |
|
3 |
150 |
325 |
|
4 |
120. |
225 |
|
5 |
110 |
160 |
|
6 |
105 |
100 |
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2. (a) Sanjivs budget line relating to good X and good Y has intercepts of 40 units of good X and 20 units of good Y If the price of the good X is Rs 8, what is Sanjivs income *> Calculate the price of
I
| good X and slope of the budget line, 5
Or
If the consumer faces a zero price for commodity X, what would the budget line relating to other
1 PTO.
r
goods and good X look like Show the equilibrium of the consumer by drawing indifference curves Show that at point of equilibrium, the marginal rate of substitution MRS is equal to the price ratio 5
(b) Explain the relationship between Income Consumption Curve and Engel Curve in case of inferior good 5
Or
What is the relationship between a price consumption curve and price elasticity of demand 9 5
(c) Explain with the help of indifference curves, the effects of lumpsum subsidy Vs. excise subsidy on consumers, producers and the government 5
Or
Draw indifference map in the following situations 5
(i) Economic good on the vertical axis and an
economic bad on the horizontal axis
I
(ii) Economic bad" on both the axes
()j X Y 3
x 40 y 20 -qr
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3. (a) What are the three stages of production 9 In which stage of production will a rational producer produce and why 9 5
Or
4 ,
A product can be produced by using inputs L and K and firms present output position indicates
\
MPa = 3, = Re 1, MPl = 6 and PL = Rs 4
Is the firm employing cost minimizing combinations
of input K and L ? If not, what should the
P.TO
Explain the Concept of economies of scope How are they measured 7 5
Or
If there are constant returns to scale, there may be diminishing returns to factor Prove with the help of isoquants 5
Show that m a linear homogeneous'Cobb-Douglas production function
X = ALaKP
(0 If all inputs are increased m the same proportion then output also increases by the same proportion
(u) The average and marginal product function
K
depend only upon the mpjt ratio 5
Or
What are ridge lines 7 What is the relevance of i these lines in theory of production ? 5
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* 4. (a) Explain the concept of "Learning Curve ? What is its shape 7 What is the impact of learning on downward sloping LAC curve 7 7 %
Or
How does a price ceiling by the government
affect the producer surplus and consumer
v
surplus 7 7 Vi
(6) Explain that long-run marginal cost curve is derived from short-run marginal cost curves but does not envelope them llA
Or
Explain the shapes of short-run cost curvesAFC, AVC, MC and SAC. Why the short-run average cost curve is U-shaped 7 , 7lA
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5 (a) Denve diagrammatically the long-run supply curve of a perfectly competitive industry in case of decreasing costs and increasing costs 7l/s
Or
Explain the difference between the short-run and the long-run equilibrium of a firm under perfect competition If the firms are in short-run equilibrium, will the competitive industry, as a whole, be in equilibrium in the long-run also 9 Comment. * IVi
(6) What is a subsidy 9 Explain how the benefit of a subsidy is split between buyers and sellers in a competitive market. * * IV2
Or
What is the difference between
#
(i) Accounting Profit and Economic Profit,
(w) Walrasian Stability and Marshallian
Stability VA
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6003
18 12.000
|
Attachment: |
| Earning: Approval pending. |
