[2] BECC-101

(b) On which part of the production possibility

No. of Printed Pages : 12 BECC-101
curve does production take place when
BACHELOR OF ARTS (HONOURS) resources are under-utilised ? Explain

ECONOMICS PROGRAMME (BAECH) using a diagram. 6

(c) What could bring a shift in the production

Term-End Examination
possibility curve ? 6
December, 2021
2. Consider an equation :
BECC-101 : INTRODUCTORY MICROECONOMICS Q = u – vP ...... (A)

where Q stands for quantity of a commodity,

Time : 3 Hours Maximum Marks : 100
P for price of that commodity, u and v represent
Note : Answer questions from each Section as any constant numbers.

directed. Answer the following questions :

(a) Is the given equation, a demand or a

Section—A supply equation ? Give reason for your
answer. Also draw the curve representing
Note : Answer any two questions from this
such an equation. 6
Section. 2 × 20 = 40
(b) Now consider another equation :
Q = w + xP ..... (B)
1. (a) Define a Production Possibility curve along
Here again Q stands for quantity of a
with underlying assumptions. 8
commodity, P for price of that commodity,

P. T. O.
 [3] BECC-101 [4] BECC-101

w and x represent any constant numbers. (b) “Marginal revenue curve under the kinked
Considering equations (A) and (B), demand curve model cannot be obtained as

determine the equilibrium price (P*) and a continuous curve.” Do you agree with this
statement ? Illustrate and elaborate. 10
quantity (Q*) of the commodity. 8
Section—B
(c) Let u = 600, v = 2, w = 300 and x = 4. What
Note : Answer any four questions from this
will be the values of equilibrium price (P*)
Section. 4 × 12 = 48
and quantity (Q*) ? 6
5. (a) What is meant by price elasticity of
3. (a) “A long-run average cost (LAC) curve
supply ? Illustrate an infinitely elastic
envelopes the short-run average total cost
supply curve. How does the shape of this
(SATC) curves.” Elucidate using supply curve change when supply becomes
appropriate diagram. 10 elastic ? 8

(b) “The behaviour of the firm which seems to (b) Discuss the determinants of price elasticity

be efficient in the short-run may be found of supply. 4

to be inefficient in the long-run.” Do you 6. Explain the law of diminishing marginal utility
agree with this statement ? Give with the help of a diagram. Also derive a

reasons. 10 demand curve using the law of diminishing

marginal utility. 12
4. (a) Compare the long-run equilibrium
7. Does tangency of indifference curve with the
positions under perfect competition and
budget line always result in optimal solution for
the monopolistic competition market the consumer utility maximisation
structures. 10 problem ? Elaborate. 12

P. T. O.
 [5] BECC-101 [6] BECC-101

8. Consider the figure ahead, where capital (K) 10. Write short notes on the following :
and labour (L) are the factors of production in
(a) Scarcity lies at root of all economic
producing output. I1, I2, I3 represent isoquants
activities 3
for output levels 550, 650 and 750 units,
respectively : (b) Indifference map 3

(c) Quasi rent 3

(d) Moral hazard 3

Section—C
Note : Answer both the questions from this
Section. 2 × 6 = 12

11. What is meant by a negative externality ? Also

write down two different forms of government
(a) Identify the returns to scale represented by intervention adopted to solve the problem of
the above set of isoquants. What are externality. 6
the factors that lead to such returns to
12. Differentiate between Cournot model and the
scale ? 6
Stackelberg model of oligopoly. 6
(b) Distinguish between real and pecuniary
internal economies. 6

9. Describe the conditions under which perfectly

competitive markets fail to achieve the efficient

allocation of resources. 12

P. T. O.
 [7] BECC-101 [8] BECC-101

BECC-101

(Shift)

2021 Q = u – vP ...... (A)

-101 Q P

u v

&

2 × 20 = 40

Q = w + xP ..... (B)
Q P

w x (A)

(B)

P. T. O.
 [9] BECC-101 [ 10 ] BECC-101

(P *) (Q*)

u = 600, v = 2, w = 300 x=4 ]

(P *)
&
(Q*)

(LAC)

(SATC) 4 × 12 = 48

(envelops)

10

P. T. O.
 [ 11 ] BECC-101 [ 12 ] BECC-101

]
(K) (L)
I1 , I2 , I3

(Moral hazards)

&

2×6 = 12

(sets)

(Real and Pecuniary)

BECC–101

P. T. O.