Description
BECC -115 INTERMEDIATE MICROECONOMICS
Tutor Marked Assignments
Course Code: BECC-115
Assignment Code: Asst /TMA /2024-25
Total Marks: 100
Assignment 1
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.
2
1.
2.
(a) Explain how the presence of externalities in the market does not lead to optimal production
of goods? Suggest at least three ways of internalizing the externalities.
(b) Differentiate between Risk aversion and Risk neutrality. How does insurance help in reducing
risk? Show with an example.
(a) What is an Isoquant? Explain the properties of an Isoquant. How do you define the economic
region of production? Explain using diagram.
(b)What is Pareto Efficiency? Explain the statement that Pareto efficiency requires Efficiency in
exchange, production and output mix.
Assignment 2
Answer the following Middle Category questions in about 250 words each. Each question carries 10
marks.
3
Consider the following Cobb-Douglas utility function
U(x1, x2)= x1
2×2
2
P1= 10, P2= 5
Where x1 and x2 are the two goods and P1 and P2 are their respective prices.
(i) Determine the optimal choice of consumption of x1 and x2
(ii) Find the expression for Indirect Utility Function
4.
3
What is Deadweight loss for a monopolist? If a monopolist faces the demand curve given by
P(Q) = 20-2Q and the cost function as 2Q+ Q2, calculate the deadweight loss that he might face.
5.
State and explain the two fundamental theorems of welfare economics.
Assignment 3
Answer the following Short Category questions in about 100 words each. Each question carries 6
marks.
6.
5
What are Iso-welfare curves? How do they help in determining the maximum point of social
welfare?
7.
8.
9.
10.
If production function is given by Q =10 √
(i) Calculate the elasticity of output with respect to labor (L)
(ii) Calculate the elasticity of output with respect to capital (K)
(iii) What kind of returns to scale does it exhibit?
What are the two approaches to profit maximization under perfect competition? If TR= 400Q –
2Q2, TC= 1800 +50Q + 3Q2. Find the profit maximizing level of output for the firm.
Explain the concept of excess capacity under Monopolistic Competition.
Differentiate between any three:
(a) Long run equilibrium of Monopoly and Perfect competition
(b) Bertrand and Stackelberg model
(c) Price effect and substitution effect
(d) Asymmetric Information and Moral Hazard
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