IGNOU BECC-101 June 2025 Previous Year Question Paper

Q1.(i) Does technology shift the production possibility curve to the right ? Explain. Gi) Distinguish between the following: 8

(a) Consumer Surplus and Producer Surplus

(b) Positive and Normative Economics

(ii) Examine the tax burden under the following situations : 8

(a) When demand curve is perfectly elastic and supply curve is of normal shape.

(b) When supply curve is perfectly elastic and demand curve is of normal shape.

Q2.(i) Derive the demand curve with the help of law of diminishing marginal utility (Diagram is required). 6

(i) Define the income effect and the substitution effect of a price change. Using Hicksian method, illustrate graphically the decomposition of substitution effect and income effect of a change in price of a commodity. 10 Gii) Which returns to scale does this Q = AL®8K°> production function show ?

Q3.0) “A typical production function has three stages.” Explain with the help of diagrams. 4 Gi) What is the firm’s expansion path ? Show the expansion path in the short- run in the case of linear homogeneous production function. 10 Gii) Distinguish between external economies and external diseconomies.

Q4.(i) What is the relationship between long- run marginal cost curve and long-run average cost curve. 10

(ii) Define perfect competition. A perfectly competitive firm, faces P = % 4 and Marginal Cost (MC) = 3Q2 —- 14Q + 12. The slope of MC-curve is given by 60 - 14. 10

(a) Determine the best level of output of the firm.

(b) Find the total profit of the firm at this level of output, if total cost curve is given by Q3— 7Q?+ 12Q +5.

Q5.(i) Why does a tax create a deadweight loss ? What determines the size of this loss ? 4

(i) Suppose the supply of labour (LS) is given by LS = 10. W, where W is the wage rate. (in rupees per hour). The demand for labour (LP) is given by LP = 140-10 W. 8

(a) What will be the free-market wage rate and employment level ?

(b) Suppose the govt. sets a minimum wage of = 9 per hour. How many people would then be employed ?

Q6.@) If Babu is indifferent between Coke and Pepsi, what would Babu’s indifference curves look like ? Explain. 6 Gi) Draw an income consumption curve and Engel curve for good-X, assuming that the price of X is 10 and the price of Y is = 25 by examining income of = 100, = 200 and हैं 300.

Q7.With the help of a diagram, explain the difference between the substitution effect given by Slutsky and Hicks.

Q8.0). Discuss the concept of long period economic efficiency. 4

(i) Explicate the concept of increasing returns to scale, diminishing returns to scale and constant returns to scale with the help of isoquant curve analysis.

Q9.@) Distinguish between Co-operative Behaviour and Non-co-operative Behaviour. 4 Gi) Let there be two firms which produce output under zero cost of production. The market-demand is given by P = 20 — Q, where Q is total output. Calculate output solution for the two firms under Stakelberg’s model.

Q10.Write short notes on the following: 6+6=12 G@) ‘ Kinked demand curve. Gi) ‘First theorem of Welfare Economics.

Q11.What do you understand by the market failure ? Explain the sources of market failure.

Q12.What role does consumer utility maximisation and firm cost minimisation play in a general equilibrium analysis ? 6 arm (MC) = 3Q2 — 14Q + 121 MC