LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034 B.A. DEGREE EXAMINATION – ECONOMICS
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)
- Bring out the relationship between total utility and marginal utility.
- What is cross elasticity of demand? Explain its use in business economics.
- Distinguish between market period and long period in economic theory.
- 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
- Distinguish between market price and long run price.
- What is monopoly power? How is it measured?
- Distinguish between perfect competition and monopolistic competition.
Part – B
Answer any FOUR questions in about 300 words each. (4 x 10 = 40 marks)
- What are the core problems of a capitalistic society? How are they solved?
- Explain the law of diminishing marginal utility. Bring out its limitations and applications.
- Distinguish between diminishing returns and returns to scale.
- What are the salient features of monopolistic competition? Explain each one of them in detail.
- Explain first and second degrees of discriminating monopoly.
- 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
- 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)
- Explain consumer equilibrium under ordinal approach. Divide the price effect into income and substitution effect for a normal good.
- Analyze the nature of short-run and long-run cost curves.
- Distinguish between firm and industry equilibrium under the conditions of perfect competition.
- What are the features of a monopoly firm? How is price determined under monopoly in the short and long run?
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