Eco 421 2081
Attempt any two questions from group A and four from group B
Group A (Long question answer) 30 marks
- Explain how the change in price of a commodity affects consumers' equilibrium using the indifference curve approach.
- Discuss the producer's equilibrium and find out the least cost combination of inputs in the theory of production.
- Define price discrimination. How are price and output determined under a discrimination monopoly? Describe.
Group B (short question answer) 40 marks
- What are the central economic problems? Explain.
- What is the law of supply? Supply function with an appropriate mathematical equation.
- Explain the long-run average cost curve with the help of an appropriate diagram.
- Explain and show the equilibrium of a firm is the case of profit maximization under perfect competition.
- “Profit is the reward for innovations.” Explain this statement.
- Distinguish between general and partial equilibrium with appropriate examples.