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Assignment- 1 Introduction to Micro Economics 1. Will the problem of scarcity disappear over time as standards of living increase? 2. Distinguish between the Real and Financial flows that link product and factor market? 3. Why do we study Micro Economics? 4. Explain how the introduction of Govt. affects the circular flow of economic activity? 5. “Scarcity of Resources is the mother of all economic problems. ” Discuss with example. 6. Why can’t you buy anything you want? What is your main consideration what to buy and what not to? . What are the factors that make PPC upwards? Explain with the help of graph the upward slope of PPC caused by a) Increase in supply of resources b) Technology improvements 8. Why does intervention of Govt. in a free market economy often becomes inevitable? Assignment- 2 DEMAND 1. How is the firm’s demand curve affected by the degree of competition existing in its Industry? 2. What is Bandwagon Effect and Snob Effect? How do they effect the Demand for goods? Draw Graph 3. Explain Giffen Paradox and Veblen Effect?
Does usual Law of Demand apply in their case ? Draw Graph 4. Explain the effect on Market price and Qty in the market for mobile phones handsets of each of the following: Draw Graph a)Consumer Income rises b)Technical Improvements reduce production costs c)The price of fixed line calls falls sharply 5. List all the markets in which you regularly buy goods or services. How are the prices and Qty. determined during the transaction? Do these prices changes on a day to day basis. 6.
An Individual Demand Curve slopes downward to the right because of: a)Income Effect of fall in prices b)Substitution Effect of Decrease in prices c)Diminishing Marginal Utility d)None of the above e)All of the above 7. Indicate what happens in the market for Hamburgers if: a)Prices of hot dogs increases b)A direct subsidy on each head of cattle is given to farmers raising cattle c)Medical research proves that this new breed results in hamburgers with less cholesterol d)A new breed of cattle is developed with much faster growth. 8.
How do increase in consumer’s income and prices of the substitute goods affect the demand for a commodity? 9. Why do demand curves for most goods slope downwards to the right? 10. Distinguish between a Demand Function and a Demand Curve? 11. What are the factors that causes a shift in the demand curve? 12. Differentiate between Movement in Demand curve and shift in demand curve? 13. Derive a Demand Curve from the Demand Function Q=50-10P 14. Find out Equilibrium Qty. from the demand function Qd=25-10P and Supply Function Qs=25P.
What is the change in price of Demand function changes to Qd=30-10P , Supply function remaining the same? 15. The sales data of a book publishing company produces a demand function as Q=5000-50P. From this demand function, find out: a) Demand Schedule and Demand curve b) No of Books sold at price Rs 25. c) Price for selling 2500 copies d) Price for zero sales e) Sales at Zero price 16. From a Demand Function Qd =2000-30P and a Supply function Qs=20P find out a)Equilibrium Price b) Equilibrium Qty. c) Gap between Demand and Supply at P=Rs20 and P=Rs 50.