Description
BECC131-PRINCIPLES OF MICROECONOMICS – I
Tutor Marked Assignments
Course Code: BECC-131
Assignment Code: BECC-131/2024-25
Total Marks: 100
Assignment One
Answer the following Descriptive Category questions in about 500 words each. Each question carries
20 marks 2
1 (a) Using Isoquant and Isocost line, explain the optimum combinations of factors and
Producer’s equilibrium.
(b) What is the relationship between long run Marginal cost and Long run Average
cost curve? Explain the concept of long period Economic Efficiency using a diagram.
2 (a) “Economies of Scale lead to increasing returns in the long run”, in the light of this
statement, discuss the internal and external economies of scale accruing to the firm in
the long run.
(b) If the government fixes the price above the equilibrium price, what impact will it
have on the market?
Assignment Two
Answer the following Middle Category questions in about 250 words each. Each question carries 10
marks. 3
3 (a) Derive the demand curve from Indifference Curve for an inferior good.
(b) Explain the total Expenditure method of calculating the price elasticity of demand.
4 Suppose that per unit price of capital PK= Rs. 10, per unit price of labour PL= Rs. 20
and Total Outlay (TO) = Rs. 160
(a) What is the slope of the Isocost line?
(b) Write the equation of the Isocost Line.
5 (a) A consumer consumes only two goods – X and Y. State and explain the conditions
of consumer equilibrium under utility analysis.
(b) Give reasons for diminishing returns to a factor in the short run.
Assignment Three
Answer the following Short Category questions in about 100 words each. Each question carries 6
marks. 5 × 6 = 30
6 Distinguish between extension of supply and an increase in supply.
7 Under what condition will a shift in demand curve only result in a change in quantity?
8 What happens to the budget line when the income of the consumer increases. Use
diagram to show.
9 Differentiate between implicit and explicit costs.
10 Law of Diminishing returns applies only in the short-run. Do you agree?
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