University of Dhaka

Department of Economics
13 Batch 3rd Semester Final Examination 2020
th

Course No: 201 Course Title: Intermediate Microeconomics I

Full Marks: 25 Time 90 Minutes

Q1. Answer any one from the following questions (10)

A) Explain Consumer’s equilibrium with the help of indifference curve and budget line.
Compare between income tax and quantity tax per unit with the help of indifference
curve analysis.
B) Explain profit maximization with the help of isoprofit and production functions. Show the
derivation of Factor demand and output supply functions.
C) Define perfect competition. Explain long run equilibrium condition under perfect
competition and explain why supernormal profit and loss do not exist in the long run
under perfect competition.
Q2. Answer any three from the following questions (5x3 = 15)
A) Given C = 500+5y2+20y and P= 520, derive the values of equilibrium output, profit and
producer’s surplus of the firm. What will be the price and output combination for earning
normal profit.
B) Maximize U = X1.50X2.50, U = 4X1+5X2 and U = Min (2X1, 5X2) subject to the same budget
constraint 50X1+100X2 = 1000.
C) Explain the derivation of demand curve from price consumption curve for a Giffen
commodity.
D) Explain compensated variation.
E) Explain shut down condition of a perfectly competitive firm.