BECC-101 EM 2025-26 SOLVED ASSIGNMENT

Description

BECC-101 : INTRODUCTORY MICROECONOMICS
Tutor Marked Assignments
Course Code: BECC-101
Assignment Code: BECC-101/2025-26

Assignment One

Answer the following Descriptive Category questions in about 500 words each. Each question carries 20 marks. Word limit does not apply in case of numerical questions.

1. (a) Distinguish between law of demand and price elasticity of demand. Identify the factors on which price elasticity of depend. How does elasticity of demand help the economic agents in decision making.

(b) Given the following information, find out the price elasticity of demand and cross elasticity of demand:

Q_𝒅=𝟏𝟎−𝟐𝑷+𝑷_𝒔

where 𝑄𝑑 is the quantity demanded, P is the price of the product which is given as Rs. 10, and 𝑃𝑠 is the price of the substitute good which is given as Rs

2. (a) 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?

(b) What is production possibility frontier? How does the marginal rate of transformation relate to the production possibility frontier?

Assignment Two

Answer the following Middle Category questions in about 250 words each. Each question carries 10 marks. Word limit does not apply in application part of the question. 3× 10 = 30

3. (a) Discuss the various shapes of isoquants that may be assumed depending on the degree substitutability. What are the properties of Isoquants?

(b) Can a firm have a production function that exhibits increasing returns to scale, constant returns to scale and decreasing returns to scale as output increases? Give reasons in support of your answer.

4. Suppose a competitive firm has a total cost function TC(q)=450+15q+2𝑞² and marginal cost function MC(q)=15+4q. If the market price is P=Rs 115 per unit,

(i) Find the level of output produced by the firm.

(ii) Find the level of profit and the level of producer surplus

5.How does equilibrium in an oligopolistic market is distinct from equilibrium in perfectly competitive market and monopolistic competition? Explain the Cournot’s model of price and output determination under oligopoly.

Assignment Three Answer the following Short Category questions in about 100 words each. Each question carries 6 marks.Word limit does not apply in application part of the question

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

Q_𝑑 =8000−1000𝑃_𝑥

Q_𝑠 =−4000+2000𝑃_𝑥

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

8. Identify the distortions that lead to failure in achieving the efficiency in perfectly competitive market.
9. In an economy of two commodities (X and Y) and two factors (L and K), how is general equilibrium of production reached?
10. Distinguish between any two of the followings: Marginal physical product and marginal revenue product. Adverse selection and moral hazards. Normal profit and abnormal profit.