BECM-161 EM 2025-26 SOLVED ASSIGNMENT

Description

BECM-161 : PRINCIPLES OF MICROECONOMICS
Tutor Marked Assignments

Course Code: BECM-161
Assignment Code: BECM-161/2025-26

Section A Answer the following Descriptive Category questions in about 500 words each. Each question carries 20 marks 2×𝟐𝟎=𝟒𝟎

1.(a) Explain with illustration the three stages of production. Why should a rational producer under competitive condition should produce in stage II?

(b) What is production possibility curve (PPC)? How does a PPC provide an economy’s menu of choices?

2. (a) What is indifference curve? Explain its properties.

(b) A consumer has utility function for goods X and Y as under : U(X,Y)=𝑋^0.2𝑌^0.7

1. What will be the consumer’s marginal utility for X.
2. What will be the consumer’s marginal utility for Y.

Section B Answer the following Middle Category questions in about 250 words each. Each question carries 10 marks. 3×𝟏𝟎=𝟑𝟎

3. (a) How does want and utility are interconnected to each other? How is the cardinal approach different from ordinal approach to consumer behavior?

(b) On what grounds, the law of diminishing marginal utility is criticized by the modern economists?

4. What are implicit costs? How are these implicit costs estimated? Do you think that these costs be included as part of costs of production? Give reasons for your answer.
5. (a) Distinguish between public monopoly and private monopolist. How does public monopoly firm makes its price and output decisions? Illustrate.

(b) What do you understand by the term ‘market failure’? Explain the various sources of market failure. Which policy instruments can be resorted to regulate the inefficient market situations?

Section C Answer the following Short Category questions in about 100 words each. Each question carries 6 marks. 5 × 6 = 30

6. Explain how does ‘scarcity’ lie at the root of all economic activities?

7.Explain with diagrams the approaches that are used to decompose the price effect into substation effect and income effect.

8.Discuss the relationship between marginal and average product curves.

9.Distinguish between any two of the followings:

(i)  Marginal physical product and marginal revenue product.

(ii) Adverse selection and moral hazards.

(iii)  Normal profit and abnormal profit.

10. Given the following supply and demand functions of a commodity X, determine its equilibrium price and quantity.