Gauhati University 2nd Semester Economics Major Question Papers 2017

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Gauhati University 2nd Semester Economics Major Question Papers 2017

2 O 1 7


( Major )
Paper: 2.1

( Microeconomics—II )

Full Marks: 80
Time : 3 hours
The figures in the margin indicate full marks for the questions

Answer either in English or in Assamese

1 Answer the following questions as directed :

(a) What is price discrimination?
(b) Give an example of a monopsony market,
(c) Define internal rate of return.
(d) Write True or False :
“Standard of living of worker depends on real wage, not money wage.”
(e) Give an example of insurable risk men 
(f) What do you mean by Welfare Economics?
(g) What is transfer earning?
(h) Choose the correct one :
In a monopoly, Marginal Revenue Product (MRP) is (greater than/ equal to / less than) Value of Marginal Product (VMP).
(i) state the compensation principle.
(j) Fill in the blank :
In monopolistic competition, there are two types of costs. They are production costs and____.

2. Answer the following questions: 2X5=10

(a) State why Pigou is called the father of Welfare Economics
(b) “Rent enter into price.” Comment.
(c) Point out two differences between Net Present Value and Internal Rate of Return.
(d) What is the shutdown point?
(e) what are ‘Heroic’ assumptions mentioned by Chamberlin?

3. Answer any four of the following questions: 5X4=20

(a) What are the conditions for possibilities and profitabilities of price discrimination?

(b) Distinguish between economic profit and accounting profit.

(c) Explain the concept of quasi-rent as the difference between total revenue and total variable cost.

(d) Explain briefly the innovation theory of profit.

(e) What is collective bargaining? Describe the role of the trade union in the upliftment of the working class.

(f) Discuss payback period method as a criterion of project appraisal.

4. Answer the following questions :

(a) Explain the short-run equilibrium of a firm and industry in a perfectly competitive market under identical and different costs conditions. 10
Explain how price and output are determined by a discriminating monopolist. 10

(b) Critically discuss the marginal productivity theory of distribution. 10
Explain Ricardo’s concept on rent as a differential surplus. 10

(c) Discuss how wage is determined under bilateral monopoly. 10
What is the average rate of return criterion? If initial investment outlay of a two-year project is ₹90,000 and net income before taxes is ₹50,000 and income tax is 50%, then calculate the average rate of return. Again, if the minimum cut-off rate is 10%, whether the project will be selected or not? 3+5+2=10

(d) Explain the Pigouvian concept of Welfare Economics. 10
What is Pareto optimality? Discuss the conditions of Pareto optimality. 10

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