# Introductory Microeconomics – Old Question Paper 2009 | Semester: Fall

##  Introductory Microeconomics BBA | BBA-BI | BBA-TT | BCIS | BHCM Old Question Paper Year: 2009 | Semester: Fall Pokhara University

Exam 2009 Fall

1. a. What is market equilibrium? Show how equilibrium price is determined in a free market economy? 
b. What are the problems of scarcity that the society faces? In what ways does specialization reduce the problem at scarcity? 

2. a. Differentiate between Cardinal Utility Analysis and Ordinal Utility Analysis. How does a consumer get equilibrium under Cardinal Utility Analysis. 
b. State the law of demand. Why does it slope downward from left to right? Does it hold true for giffen goods? Why? 

3. a. Suppose that your demand schedule for compact discuss is as follows: 

 Price Quantity demanded(income =\$ 10,000) Quantity demanded(income =\$ 12,000) \$ 8 40 50 10 32 45 12 24 30 14 16 20 16 8 12

i. Calculate your price elasticity of demand as the price of compact discs increases from \$8 to \$10 if your income is \$10,000.
ii. Calculate your income elasticity of demand as your income increases from \$10,000 to \$12,000 if the price is \$14.

b. What is meant by consumer’s equilibrium? Show the consumer’s equilibrium with the help of indifference curve approach. 

4. a. Explain the production theory with two variable inputs. 
b. From the following cost function calculate TFC, AFC, TVC and AVC. 

 Output 0 1 2 3 4 5 6 TC 120 180 200 210 225 260 330

5. A firm has demand function P=4-2q and cost function C=q^2+2q.Find, 
a. Equilibrium price that maximum profit
b. AC, MC, AR and MR at equilibrium price and quantity.

6. a. Explain the typical shape of short-run average fixed ,average variable, average total and marginal cost curves. 
OR
Explain the derivation of long-run average cost curve. 
b. What is factor price? Explain the determination of factor price in an imperfectly competitive market in long run. 

7. Write short notes on (Any Two) [2×5]
a. Isocost curve
b. Nature of Average Revenue and Marginal Revenue Curves
c. Shift in Demand Curve

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