IGNOU BECC-131 December 2021 Previous Year Question Paper

Q1.(a) What is a market demand curve ? Explain using a diagram. 5

(b) What are the components of the price effect ? Comment on the strength and sign of these components in case of a Giffen commodity.

Q2.(a) Define and illustrate the relationship between the marginal cost, average variable cost and average total cost curves. 10

(b) Long-run average cost curve envelopes a family of short-run average cost curves. Explain using appropriate diagrams.

Q3.(a) Discuss the law of variable proportions using appropriate diagram. 10

(b) What are the reasons behind varying returns viz increasing, constant and decreasing returns to a factor in production ?

Q4.Given the equation Q=a+bP @, where Q stands for quantity of a commodity and P for price of that commodity, ‘a’ and ‘b’ represent any constant number, answer the following questions :

(a) Is the given equation, a demand or a supply equation ? Give reason for your answer. 6 BECC-131 2

(b) | Now consider another equation : Q=e-xP here again Q stands for quantity of a commodity and P for price of that commodity, ‘c and ‘x represent any constant number. Determine the equivalent price and quantity of the commodity. 8 (ce) Ifa=4,b=2,c = 24 and x = 3, then what will be the values of equilibrium price (P*) and quantity (Q*) ?

Q5.Distinguish between contraction in supply and decrease in supply of a commodity. Explain the reasons for change in supply of acommodity. 6+6=12

Q6.‘Cardinal utility analysis is not free from criticism.’ Comment.

Q7.Explain with diagram the expansion path in case of non-linear production function and linear homogeneous production function.

Q8.Given the figure below where capital (K) and labour (L) are the factors of production, producing output I,, I, and I, that represent isoquants for output levels 100, 200 and 300 units respectively. 3 SSS = 300 2 I, = 200 I, = 100 09 Labour (L)

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

(b) Discuss the various types of real internal economies.

Q9.(a) Draw a production possibility curve. What is the slope of this curve ? 4

(b) Mark in the same figure when

(i) resources are underutilised; and

(ii) when resources are efficiently utilized. 4

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

Q10.What is the rationale behind rationing system for allocation of scarce resources ? Also discuss the associated consequences of the rationing system. 6+6=12

Q11.Make distinction between any three of the following pairs : 3x4=12

(a) Accounting cost and Economic cost

(b) Stock variable and Flow variable in economic analysis

(c) Income effect and Substitution effect

(d) Static analysis and Dynamic analysis

(e) Public goods and Private goods BECC-131 6 wus I Q=a+bP ©, BECC-131 8 Q=c-xP wre Il £ SS = 300 I, = 200 I, = 100 BECC-131 10 a 4 and Private goods)