Download Model Paper Micro Economic

Course Outline
Course Title: Micro Economics
Class: BS (A/F), BS (Commerce)
B.Com (Annual System)
Course No: BS (A/F): ECO 101
Course No: BS (Commerce):ECO 101
B.Com (Annual System): Part I, Paper I
Course Objective
1.
2.
To let the students develop good understanding of Micro Economic concepts
To make the students aware of basic concepts that underpin all of the economic decisions
Topics
(1.1)Basic economic ideas Trade –Offs, prices and market,
equilibrium, theories and models, positive and normative economics
Source
Book1(Ch.1)
Book3(Ch.2)
Section A
(1.2)What is Market?, Competitive and non competitive markets,
market price, market definitions- the extent of a market
Section A
(1.3)Scarcity choice and resource allocation specialization and
exchange, absolute and comparative advantage, production
possibility curves, positive and normative economics
(2.1) Demand/Supply analysis Law of demand and supply,
individual demand curves
(2.2)Market demand curve/supply curves, factors affecting(shift of
demand and supply curve)
(2.3)Concept of elasticity along with its business relevance,
consumer surplus
(3.1). Theory of consumer behavior cardinal/utility approach, law
of diminishing marginal utility, law of equi marginal utility.
Section A
Book1(ch. 2,4)
Book2(Ch1)
Section A
“”
Section A
“”
Book1(ch3)
Book2(Ch.2.3.4)
(3.2)Ordinal/indifference curve approach, properties of indifference
curves, consumer budget line, shift and consumer equilibrium. price,
income and substitution effect.
(4.1). Theory of production The technology of production,
production function, short run and long run production function,
(4.2)Production with one and two variable inputs, isoquants, returns
to scale and scope.
(5). Cost of production measuring cost, different cost concepts,
different cost curves in short run and in long run, the learning
curves(a dynamic change in cost).
(6.1). Market structure perfect competition( a perfectly
competitive market), profit maximization, Marginal revenue,
marginal cost, and profit maximization, choosing output in short
run, the competitive firm’s short run supply, choosing output in long
run, the industry’s long run supply curve
(6.2)Monopoly, average and marginal revenues, the output decision,
Monopoly power, sources of monopoly power, sources of monopoly
power, the social cost of monopoly power, monopsony and
monopsony power
(6.3)Monopolistic competition, the making of monopolistic
competition, equilibrium in short and long run, monopolistic
competition and economic efficiency
Section A
Section A
Section A
Section B
Book3(ch5)
Book1(ch5)
Section B
Section B
Book1(ch6)
Book2(ch8)
Book3(ch5)
Book1(ch.9.10.11)
Book2(ch9 to 13)
Section B
Section B
Section B
(6.4)Oligopoly, Equilibrium. in oligopolist market, price and non
price competition, cartels, price leadership
(7.1). Labor market Demand for labor, labor’s marginal
Book1(ch13)
productivity, supply of labor, Wage rate determination, S/R and L/R Book2(ch14/15)
supply of labor
(7.2)Monopsony power,( marginal and average expenditure), the
input purchase decision of a firm, factor market with monopoly
power,
(7.3)Indifference curve analysis of labor supply, the elasticity of
substitution and change in the relative factor shares, monopsony
when several variable inputs are used.
(8.1). General Equilibrium and Economic Efficiency General
Book1(ch15)
equilibrium. Analysis, Efficiency in Exchange, Equity and
Efficiency
(8.2)Efficiency in Production, (production in edgeworth box, input
efficiency, producer equilibrium. in a competitive input market, the
production possibility frontiers. The Gains from free trade
(comparative advantage, expanded production possibility frontiers)
Section B
Section C
Section C
Section C
Section C
Section C
Recommended Text:
1. Pindyck Robert S & Rubinfeld Daniel L. (2005) Micro Economics Pearson
2. Gould Johan.P & Lazear P. Edward (2001) Micro Economics All India Travel Book Seller 6TH
edition
3. Hailstone J. Thomas & Mastrianna V. Frank (2004) Basic Economics Thomson 13th edition
Further readings:
1. Bamford Colin (2002) Economics Cambridge University Press
2. H. Craig Peterson W. Cris Lewis (2004) Managerial Economics Pearson Education (4th edition)
3. Salvator Dominick (2004) Micro Economic Theory and Application New Oxford University Press 4th
edition
4. Colander C. David (2006) Economics McGraw Hill 6th edition
MODEL PAPER FOR B.COM PART 1
ANNUAL EXAMINATION SYSTEM 2009 & ONWARDS
MICRO ECONOMICS
SUBJECTIVE PART
TIME ALLOWED = 90 MINUTES
MAX MARKS = 45
INSTRUCTIONS TO CANDIDATES:



This paper comprises of 3 Sections.
Attempt ONLY ONE question from each section
Each question carries 15 marks.
Section-A
Q. 1) Can scarcity be avoided? If not how does it affect the individual’s decision-making process in buying goods
and services?
Q. 2) Why wish for a product and ability to pay is essential in determining demand? Explain what forces could
possibly be responsible in bringing a shift in demand curves?
Section-B
Q. 3) How production function can be explained in the context of a diagram? If labor and capital are used in the
production of variety of goods and services, why does it confront with diminishing marginal productivity?
Q. 4) On what grounds do we justify the difference between perfect competition and monopoly? Explain at least
three of them in detail?
Section-C
Q. 5) Is labor demand a derived demand? Explain why do producers feel comfortable as Marginal Revenue of factor
input is greater than market wage/interest?
Q. 6) What is the real meaning of efficiency? How could it be scored in output market?
Model Paper for B.Com Part I
Annual Examination System 2009 & Onwards
Micro Economics
Objective Part
Time Allowed = 30 Minutes
Max Marks = 30
Instructions to Candidates:
1. This paper comprises 30 MCQ’s of 1 mark each
2. This paper will be collected after 30 minutes.
3. Please encircle the correct option only.
4. Cutting is not allowed
Q 1)
Knowing that consumer has limited resources
that’s why he
a) Never wants to maximize his wellbeing
b) Wants to maximize his satisfaction
c) Trade offs the purchase of more of some goods for
the purchase of less of other
d) None of the above
Q 2)
Production Possibility Curve never show
a) Relationship between scarcity and choice
b) Alternative goods and services to be produced
c) Opportunity cost that producer bears on producing
additional of one product
d) All (a,b&c) are incorrect
Q 3)
The term demand means
a) Amount of a product consumer purchases
b) Amount of a product consumer wishes to purchase
c) Amount of a product consumer are willing to buy a
the price per unit changes
d) All (a,b&c) are correct
Q 4)
Budget line shows
a) Spending by consumer on different goods and
services
b) Opportunity cost bared by a consumer moving
from one good/service to the other
c) Different combinations of goods and services
purchased within given resources
d) All (a,b&c) are correct
Q 5)
The concept of Diminishing Marginal Utility states
a) More we get of one thing less we could get of the
other
b) Trade off between two productions w.r.t utility
c) Going to lose the utility as dropping units of the
said product
d) All (a,b&c) are wrong
Q 6)
Production Function Shows
a) Maximum output gained by a given set of
resources
b) Extent of labor and capital being used to produce
an output
c) Amount of output expected form various inputs
d) All (a,b&c) are true
Q 7)
Sunk cost does not mean
a) Cost this is recovered
b) Its association with forgone alternatives
c) Both are correct
d) All (a,b&c) are false
Q 8)
Monopoly does not exist when
a) There isn’t any rival
b) There are rivals and competitors
c) There is only one producer
d) All (a,b&c) are incorrect
Q 9)
a)
In oligopoly, dominant firms face a problem in
Setting price that never let small firms to sell their
output
b) Setting price that let small firm to sell their output
c) Setting price where they could get max profit
d) Setting price that help them achieving maximum
returns and letting small firms to sell their output
on it.
Q 10) Perfect Competition is a market situation where
a) Firms are price takers
b) Resources are not perfectly mobile
c) Firms possess complete knowledge of the market
d) All (a,b&c) are true
Q 11) Demand for the factors does not depend on
a) Revenue of the firm
b) Supply of factors of production
c) Both are correct
d) All (a,b&c) are wrong
Q 12) Marginal revenue product curve of labor show
a) Marginal productivity of labor
b) Max firm is willing to pay to the factor input
c) If it’s higher than wage rate, firm to continue with
it
d) All (a,b&c) are untrue
Q 13) It is difficult for a firm to demand factor of
production as
a) Both are expressed/ traded in different market
b) Producer does not have enough knowledge about
market trend
c) Change in price of the one effect the supply of the
other
d) Change in price of the one effect the demand of the
other
Q 14) When output/input market is perfectly competitive
a) Resources are used inefficiently
b) Difference between total benefit and total cost is
minimum
c) Difference between total benefit and total cost is
maximum
d) Factor of production is available at cheap price
Q 15) Comparative Advantage Theory states to
a) Concentrate on producing the product where
producers are having losses
b) Concentrate on producing the product where
producers are having profit
c) Concentrate on producing a product the cost of
production of whom is relatively higher than cost
of production of the other one
d) All (a,b&c) are false
NOTE: Only 15 MCQs (5 MCQs from each section) are provided for specimen purposes. Actual paper will comprise 30
MCQs (10 MCQs from each section)