LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034      B.A. DEGREE EXAMINATION – ECONOMICS

AN 01

FIRST SEMESTER – NOV 2006

         EC 1500 – MICRO ECONOMICS – I

(Also equivalent to ECO 500)

 

 

Date & Time : 01-11-2006/1.00-4.00           Dept. No.                                                       Max. : 100 Marks

Part  – A

 

Answer any FIVE questions in about 75 words each.                  (5 x 4 = 20 marks)

1. Bring out the relationship between total utility and marginal utility.
2. What is cross elasticity of demand? Explain its use in business economics.
3. Distinguish between market period and long period in economic theory.
4. Calculate the price elasticity of demand between points A & B, B & C, C & D and D & E.

Point          A         B         C         D         C

Dx             12        14        16        18        20

Px              12        10        8          6          4

5. Distinguish between market price and long run price.
6. What is monopoly power? How is it measured?
7. Distinguish between perfect competition and monopolistic competition.

Part – B

Answer any FOUR questions in about 300 words each.            (4 x 10 = 40 marks)

8. What are the core problems of a capitalistic society? How are they solved?
9. Explain the law of diminishing marginal utility. Bring out its limitations and applications.
10. Distinguish between diminishing returns and returns to scale.
11. What are the salient features of monopolistic competition? Explain each one of them in detail.
12. Explain first and second degrees of discriminating monopoly.
13. Find the utility maximizing combination of
    • Qx and Qy from the following data

Units         1          2          3          4          5          6          7          8          9          10

Mux           50        45        40        35        30        25        20        15        10        5

Muy           100      90        80        70        60        50        40        30        20        10

M = Rs. 15            Px = Rs 1        Py = Rs. 2

• Explain the practical use of law of equi-marginal utility

14. Bring out the relationship between AR, MR and elasticity of demand.

Part – C

Answer any TWO questions in about 900 words each.              (2 x 20 = 40 marks)

15. Explain consumer equilibrium under ordinal approach. Divide the price effect into income and substitution effect for a normal good.
16. Analyze the nature of short-run and long-run cost curves.
17. Distinguish between firm and industry equilibrium under the conditions of perfect competition.
18. What are the features of a monopoly firm? How is price determined under monopoly in the short and long run?

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