Ramanujan College

(University of Delhi)

Course: Generic Elective (GE) ECONOMICS (1st Semester)

Course Instructor: ISHA GUPTA
Subject: Introductory Microeconomics

Answer all the Questions.

Q1. Attempt the following:

a) In a supply-and-demand diagram, show producer and consumer surplus in
the market equilibrium. What is market efficiency? Is it the only goal of
economic policymakers? What does the invisible hand do?
b) Explain the effects of rent control in the short and the long run. Why and
how do the effects vary over the period of time?
c) “If the Government wants to minimize the tax burden of any indirect tax
on consumers, then it is necessary that the Government impose this tax on
producers rather than consumers”. Is this statement True or False? Justify
and logically analyze your argument. Draw graphs if necessary.
d) Draw a production possibility frontier (PPF) for an economy between the
clean environment and the quantity of industrial output. What determines
the shape of the PPF? Using this PPF, explain in detail the trade-off that
the Society faces.
(3 + 3 + 3 + 3 = 12 Marks)

Q2. Explain in detail the process by which the consumer arrives at an equilibrium
point. Illustrate this process through the concepts of budget line and
indifference curves. Using this framework, explain how do income and
substitution effects operate in case of price rise for the following:
(i) Normal good
(ii) Giffen good.
(7 Marks)

Q3. CASE STUDY: “Industry-level Dynamics of COVID-19 Economic Crisis

and its Implications”

In the pandemic-related GDP growth slowdown across the world, which

industries or sectors in the Indian economy do you consider to have most
benefited from the Covid-19 crisis and why? Explain and highlight in detail
using the Demand-Supply analysis to substantiate your argument. Justify your
analysis by supporting it with facts and online data and substantiate your
argument by extensively using graphs to highlight your answer.

[The objective of this case study is to enable you to apply microeconomic

skills to real world economic scenarios. Accordingly, you are required to be
 careful while writing your argument. You are required to refer to both the
Mankiw textbook and the online/offline material to substantiate your answer.]
(6 Marks)

Total Weightage: 25 Marks

Submission Deadline: 17 February 2023 (Friday) by sharp 5:00 pm.
[Any submission after this deadline will lead to a penalty of (-5) for that student]

Rules of Academic Honesty & Integrity

1) This assignment submitted for evaluation must be student’s own work.
2) All acts of academic dishonesty such as plagiarism, cheating, fabrication or
blatant copying of other student’s academic work are serious offences.
3) Any act of academic dishonesty would immediately lead to ZERO marks for that
student.
4) If any two or more case-study assignments are found to be similar in any respect,
then it would immediately lead to ZERO marks for all these respective students,
irrespective of who copied from whom.
5) Any submission after the above-mentioned deadline of 17 February 2023 (Friday
5:00 pm) will lead to a penalty of (-5) for that student.
6) Since Attendance marks are not being considered in your Internal Assessments,
this Assignment is going to be strictly graded.
7) Only HAND-WRITTEN Assignments would be considered for evaluation and
final scores. No typing or printed sheets would be corrected. Note this carefully.

GOOD LUCK!