IGNOU BECC-131 December 2020 Previous Year Question Paper

Q1.(a) Define a production possibility curve along with underlying assumptions. 8

(b) On which part of the production possibility diagram does production take place when resources are underutilised ? Explain using a diagram. 6 Lot-I 2.1. 0.

(c) What could bring a shift in the production possibility curve ?

Q2.Given the equation : where Q stands for quantity of a commodity, P for price for that commodity, u and v represent any constant numbers. Answer the following questions :

(a) Is the given equation a demand or supply equation ? Give reason for your answer. 6

(b) Now consider another equation : Q=wtxP

(3) Here again Q stands for quantity of a commodity, P for price of that commodity, w and x represent any constant numbers. Considering equations

(A) and _

(B) determine the equilibrium price (P*) and quantity of the commodity (Q*). 8

(c) Let u = 600, v = 2, w = 300 and x = 4. What will be the value of equilibrium price (P*) and quantity (Q*) ?

Q3.(a) Illustrate and discuss the three stages of production using the average product and marginal product curves. 10

(b) In which stage of production will a rational producer produce and why ?

Q4.Illustrate isoquants having positively sloped segments. In the same diagram construct ridge lines and explain the concept of economic region of production.

Q5.What do you mean by Price Elasticity of Supply ?

Q6.Illustrate a unitary elastic supply curve. How does the shape of this supply curve change when supply becomes elastic ?

Q7.Explain with diagram the law of diminishing marginal utility. State the limitations of this law.

Q8.What is meant by a demand schedule ? Why are demand curves downward sloping ? Explain using the concept of substitution, income and price effects.

Q10.Consider the figure below, where capital (K) and Labour (L) are the factors of production producing output Ih, Jy, Is representing isoquants for output levels 100, 200 and 300 units respectively : 12 eo XS In = 200 I; = 100 0 Labour (L)

(a) Identify returns to scale represented by the above set of isoquants. What are the factors that lead to such returns to scale ?6

(b) Distinguish between real and pecuniary internal economies.

Q11.A firm which is producing efficiently in the short-run may not be efficient in the long-run.

Q12.Discuss using short-run average cost curves and long-run average cost curve.

Q13.Explain the rationing system for allocation of scarce resources. How does a price ceiling set below the equilibrium price level affect the quantity demanded and quantity supplied of a product ?

Q14.Write short notes on any three of the following : 8x4=12 Gi) Economic laws

(i) Giffen good

(ii) Implicit cost

(iv) Public goods

(v) Positive economics

(vi) Merit goods 2x20=40 Q=u-vP sessees

(A) Q = wtxP "(9