Ques 1.

Explain the term Budget constraint? If the income of the consumer increases and one of the prices of the commodity decreases at the same time, will the consumer necessarily be at least as well off? Illustrate with diagram.

Ques 2.

What is utility function? Distinguish between direct utility function and indirect utility function. State the mathematical expressions of utility function of perfect substitutes and perfect compliments.

Ques 3.

What do you mean by ‘Cost minimisation’. Explain the various approaches of cost minimisation, Give illustration in support of your answer.

Ques 4.

Given the total cost function

TC=Q ³ -5Q² +60 Q

Find (i) The Average cost function (ii) The critical value at which AC is minimized (iii) The Marginal Cost

Ques 5.

Given the profit function

= 160x -3x2 - 2xy-2y2 +120y-18 for a firm producing two goods x and y

Find out (i) the maximizing profits
 (ii) test the second order condition.

Ques 6.

Distinguish between price elasticity of demand and income elasticity of demand. Given Q=700-2P+0.02y Where P = 25, and y = 500

Find out (i) the price elasticity of demand and
 (ii) Income elasticity of demand.

Ques 7.

Do you think that Walrasian equilibrium is Pareto optimal? Give reasons and proof in support of your answer.

Ques 8.

Explain the properties of preferences with example.

Ques 9.

What is consumer surplus? State the relationship between consumer surplus, compensating variation and equivalent variation.

Ques 10.

What is risk aversion? How does insurance help in reducing risk? Illustrate.

Ques 11.

What is CES production function? How does CES production function approaches a Leontief Production function?

Ques 12.

Concave function and convex function.

Ques 13.

Expected value and Expected utility.

Ques 14.

General equilibrium and partial equilibrium.

Ques 15.

Marginal Rate of Substitution and Marginal Rate of Technical Substitution.