[SOM]

Eastern University
Faculty of Engineering and Technology
Department of Electrical & Electronic Engineering
B.Sc. Engineering Midterm Examination, Summer-2021
Course Code: ECO 301, Course Title: Principles of Economics, Section: 8

Attention: Before you start go through the following guideline for Assessment Submission
1. Use only black ball point pen for sketch and writing. Don’t send typed copy in MS Word. Only
Scan copy of your own hand writing will be accepted. You may send it as PDF/MS Word (after
scanning)/ Images.
2. Write your Name, ID No., Course Code, Course Title, Section, Midterm Exam Assessment,
Summer-2021 on the Title page of your script.
3. Put page numbers (1/n, 2/n. … …. … n/n) at the bottom of each page. Try to minimize your
number of pages.
4. Return the scan copy of your answer at soniamallick.fba@esternuni.edu.bd by 14th August, 2021
(within 5:00 pm). Any queries feel free to contact me. Cell: 01929485747
5. Write your Student ID, Course Code, Section in the Email Subject.
6. It is mandatory to submit the copy of your downloaded Admit Card with the answer
script.
7. It is mandatory to preserve your hard copy for future reference.
Total marks: 30

NB: Right margin indicates the full marks.

There are three questions. Answer all of them.

1. (a) “Study of economics starts by acknowledging life’s trade- offs”. Discuss the statement in [05] CO1
context of principles of economics about individual decision making.
(b) Discuss two real- life situations where decision-makers takes decisions by [05] CO1
comparing marginal benefits and marginal costs.

2. (a) Why do people choose to become interdependent for goods and services in modern [03] CO2
global economy?
(b) The gains from trade are based on comparative advantage, not absolute advantage. [04] CO2
Justify the statement with suitable illustration.
(c) Suppose that a skilled brain surgeon also happens to be the world’s fastest typist. Should she [03] CO2
do her own typing or hire a secretary? Explain.

3. (a) What are the characteristics of a perfectly competitive market? [02] CO3
(b) Why equilibrium price is sometimes called the market- clearing price? [02] CO3
(c) Why does the supply curve slope upward? [02] CO3
(d) Sohail’s income declines and as a result, he buys more pumpkin juice. Is pumpkin [02] CO3
juice an inferior or a normal good? What happens to Sohail’s demand curve for
pumpkin juice?

(e) Why law of supply and demand phenomena is so prevalent? [02] CO3

List of course learning outcomes:

CO1: fundamental principles and applications of economics where making decisions requires
trading off one goal against another, and marginal decision making pervasively used in economy.
CO2: Principle and application of Comparative and absolute advantage thus used as a key to
understanding the gains from trade through specialization.
CO3: Supply and Demand tool used to analyze how market works i.e. scarce resources have to be
allocated among competing uses.