Introductory Microeconomics – Old Question Paper 2013 | Semester: Spring

questionIntroductory Microeconomics
Old Question Paper
Year: 2013 | Semester: Spring
Pokhara University

Exam 2013 Spring

1. a. What is microeconomics? Explain the scope of microeconomics. [8]
b. Explain with examples how various determinants affect the demand of a product. [7]

2. a. The following are the demand and supply functions of a product in the market. [8]
D=120-6P and S=10 + 5P
i. Construct demand and supply schedule and also draw the demand and supply curves
ii. Find the equilibrium price and quantity.
b. Define price elasticity of demand. Explain the factors affecting price elasticity of demand. [7]

3. a. Define budget constraint with proper example. How does consumer attain equilibrium with the help of indifference curve? [7]
b. Decompose price effect into income effect and substitution effect with a fall in price of normal good. [8]

4. a. Explain and illustrate law of variable proportions. [8]
b. Define isoquant. Explain producer’s equilibrium with the help of isoquant curve and isocost line. [7]

5. a. How are average revenue and marginal revenue related in perfect competition market? Explain. [7]
b. From the following cost function calculate TFC,AFC,TVC and AVC. [8]

Output 0 1 2 3 4 5 6
TC 100 170 200 210 225 260 330

6. a. Distinguish between monopolistic and monopoly market. [7]
b. What is factor pricing? Explain the determination of factor price in bilateral monopoly market. [8]

7. Write short notes on any two: [2×5=10]
a. Marginal Utility
b. Modern theory of rent
c. Substitution effect

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