National University of Study and Research in Law, Ranchi

End Term Examination 2021

B.A LL.B Semester -- I

Name of Subject-Economics I

Subject Code- A102

Maximum Time: 5 Hours Total Marks: 70

Instructions:

1) No clarifications shall be provided about the question paper during the course of the exam.

2) Attempt 5 questions out of 7.

1) Describe some of the tradeoffs faced by the following: [Mark =14]

I. Family deciding whether to buy a new car

II. A member of Congress deciding how much to spend on national parks
III. A company president deciding whether to open a new factory
IV. A professor deciding how much to prepare for class

2) An increase in the demand for notebooks raises the quantity of notebooks demanded, but not
the quantity supplied.” Is this statement true or false? Explain. . [Mark 14]

3) Economists have observed that spending on restaurant meals declines more during economic
downturns than does spending on food to be eaten at home. This was very relevant during the
lockdown. How might the concept of elasticity help to explain this phenomenon?

[Mark 14]

4) Suppose the book-printing industry is competitive and begins in a long-run equilibrium.

a.) Draw a diagram describing the typical firm in the industry.

b.) Hi-Tech Printing Company invents a new process that sharply reduces the cost of printing
books. What happens to Hi-Tech’s profits and the price of books in the short run when Hi-Tech’s
patent prevents other firms from using the new technology?

c.) What happens in the long run when the patent expires and other firms are free to use the
technology? [Mark 14]

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5) Why is a monopolist’s marginal revenue less than the price of its good? Can marginal revenue
ever be negative? Explain with an example.

[Mark 14]

6) Describe the three attributes of monopolistic competition. How is monopolistic competition

like monopoly? How is it like perfect competition? [Mark 14]

7) If Boeing produces 9 jets per month, its long-run total cost is $9.0 million per month. If it
produces 10 jets per month, its long-run total cost is $9.5 million per month. Does Boeing exhibit
economies or diseconomies of scale? [Marks 14]

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