IGNOU BECC-101 December 2023 Previous Year Question Paper

Q1.(a) Bring out the main differences and similarities in the micro and macro approaches of economics. 6 [ 2 ] BECC–101

(b) “An economy always produces on the PP - curve rather than anywhere inside it .” Discuss. 6

(c) Distinguish between the following : 8

(i) Static and Dynamic Economies

(ii) Public goods and Private goods

Q2.(a) If the government places a ` 500 tax on luxury cars, will the price paid by consumers rise by more than ` 500, less than ` 500, or exactly ` 500 ? Explain diagrammatically. 8

(b) Critically evaluat e Cardinal Utility Approach. 6

(c) Explain diagrammatically how is consumer’s surplus determined in Marshallian economics.

Q3.(a) Distinguish between returns to a variable proportions and returns to scale. 10 [ 3 ] BECC–101

(b) With the help of neat sketch, define the ridge lines and the economic and the non - economic regions of production.

Q4.(a) Discuss the relationship between long -run marginal cost and short -run marginal cost (diagram is required). 6

(b) What is the shutdown point in perfectly competitive market ? Explain with the help of a diagram. 8

(c) How a monopolist firm faces deadweight loss ?

Q5.(a) Given the demand and supply functions for labour hours as below : 8 SL 10 W DL 600 10 W where, W = wage rate per hour of labour and SDL and L are respectively the supply [ 4 ] BECC–101 and demand of labour in millions of labour hours.

(i) Determine the free market wage rate and employment.

(ii) Now suppose that the government fixes the minimum wage rate at ` 40 per labour hour (a wage floor). How would the employement of labour hours be effected ?

(b) Total revenue from the sale of X - commodity is given by the equation 2TR =100Q 2Q . C alculate the point elasticity of demand when MR is 20.

Q6.(a) The total utility at different levels of consumption is as given below : 6 Units consumed : 1 5 10 Total utility : 20 60 85 If the price is fixed at ` 10 per unit, determine the equilibrium level of demand. [ 5 ] BECC–101

(b) Define price consumption curve. How can demand curve be derived from indifference curve (IC) ?

Q7.Discuss the price effect, income effect and substitution effect of a fall in the price of an inferior commodity (diagram is required).

Q8.(a) Discuss the least cost combination of inputs with the help of Iso -quant curves and Iso-cost line. 6

(b) Discuss the nature of long-run average cost curve.

Q9.(a) Explain the concept of prisoner’s dilemma.

(b) Assume three firms face identical marginal costs of 20 with fixed costs of 10. They face a market demand curve of P 200 2Q=  . Find the Cournot equilibrium price and quantity.

Q10.Write short notes on the following : 6+6

(i) Backward bending labour supply curve

(ii) Kinked demand curve [ 6 ]

Q11.Explain the policy instruments available for government intervention to regulate inefficient market situations.

Q12.(a) Explain the concept of first fundamental theorem of welfare economics with example. 3

(b) Briefly describe adverse selection with the help of an example. 3 [ 7 ] BECC–101 2023 –101 &II &III [ 8 ] BECC–101 (PP-Curve)

(ii) [ 9 ] BECC–101 SL 10 W DL 600 10 W [ 10 ] BECC–101

(ii) 2TR =100Q 2Q MR, 20 [ 11 ] BECC–101 (IC) P 200 2Q=  [ 12 ] BECC–101 6+6

(ii) III