LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034 M.A. DEGREE EXAMINATION – ECONOMICS
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FIRST SEMESTER – NOV 2006
EC 1806 – MICRO ECONOMICS – I
(Also equivalent to EC 1803/1800)
Date & Time : 26-10-2006/1.00-4.00 Dept. No. Max. : 100 Marks
Part – A
Answer any FIVE questions in about 75 words each. (5 x 4 = 20 marks)
- Explain the steps involved in Inductive method.
- Differentiate micro dynamic analysis from macro dynamic analysis.
- Define ‘”Introspective cardinalist” approach and “Behaviourist ordinalist approach”
- Explain the nature of income effect and substitution effect with respect to normal and Giffen goods.
- Bring out two differences between Friedman-Savage hypothesis and Markowitz hypothesis.
- Differentiate Marginal Rate of Technical substitution from Marginal Rate of Substitution.
- Differentiate production costs from selling costs in monopolistic competition.
Part – B
Answer any FOUR questions in about 300 words each. (4 x 10 = 40 marks)
- Do you support a blend of deduction and induction analysis to analyse modern economic issues? Why?
- Do you share the view that the Revealed preference approach is a refinement over the Cardinal utility approach? Substantiate your reasons.
- Compare monopoly market with monopolistic market.
- Critically examine Cobb-Douglas production function. Do you think that it is applicable to modern industry? How?
- Compare the concepts of Budget line, Indifference map and Indifference curve with Iso-cost line, Iso-quant and Iso-qunat map.
- Enumerate the features of monopoly market? Is it applicable to modern economy?
- Compare and contrast strong ordering and weak ordering of Hicks. How does he apply them to derive the demand curve?
Part – C
Answer any TWO questions in about 900 words each. (2 x 20 = 40 marks)
- Compare and contrast the interpretations of income effect, price effect and substitution effect from the point of view of Hicks and Slutzky. Explain them with appropriate diagrams.
- What do you understand by N-M utility index? Elaborate the axioms of it and construct N-M utility index. How is it a deviation from the cardinal utility analysis?
- Define Ridge lines and Expansion path. To what extent are these concepts helpful to attain an optimum combination of output and minimization of cost of a firm? Explain the concepts with appropriate diagrams.
- What is product differentiation? What is the role of it in the determination of output and price under monopolistic competition?
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