Unique Paper Code 3007
Revised 0 of 17

Introductory Microeconomics2022–23

BA (Hons) Economics · 7 questions · 16 parts still being checked

Duration: 3 HoursMaximum Marks: 90

Reworded by Kunji from the printed paper. The original paper belongs to the University of Delhi. See DU's question bank.

Before you start

  1. This paper. Attempt any five questions. All questions carry equal marks.
  2. Most asked here. Tax incidence, deadweight loss and subsidies (4 papers), Supply, demand and market equilibrium (4 papers), Scarcity, opportunity cost and the PPF (4 papers). These come back almost every year, so learn them first. The asked N× note beside each part counts the DU papers that set its topic.
  3. Numbers and theory. 9 numerical parts and 18 theory parts. Numericals take longer to lay out, so give them your freshest time.
  4. Pace. Two minutes a mark: about 36 minutes for each 18-mark question, with nothing spare in 3 hours. Move on when the time is up.
  5. Keep score. Every part opens a worked answer checked against the books. Turn the key when you have revised it; the boxes at the top fill in, on this device.

1.

18 marks
· ~36 min
(a)The principles of economicsasked 3×Explain the principles of economics.(6)
(b)(i)Completing the marginal benefit column for burgersasked 3×The total benefits you get from consuming different quantities of burger each week are given in the table below. (i) Complete the marginal benefit column.(1)
(b)(ii)How many burgers to buy at ₹60 each, deciding at the marginasked 3×The total benefits you get from consuming different quantities of burger each week are given in the table below. (ii) The price of a burger is ₹60. Apply the Principle of Optimization at the Margin to find how many…(2)
(b)(iii)Does deciding by totals give the same number of burgers?asked 3×The total benefits you get from consuming different quantities of burger each week are given in the table below. (iii) Will the answer you gave for (ii) remain the same if you use the principle of optimization by…(1)
(b)(iv)The new optimal number of burgers when the price rises to ₹84asked 3×The total benefits you get from consuming different quantities of burger each week are given in the table below. (iv) If the prize of burger goes up to ₹84 then find the new optimal number of burgers to consume in a…(2)
(c)
Opportunity cost, and what a ₹15,000 interest-free loan to a friend really costsBeing checked
(6)

2.

18 marks
· ~36 min
(a)(i)
Supply, demand and market equilibriumBeing checked
(3)
(a)(ii)
Supply, demand and market equilibriumBeing checked
(3)
(b)Indifference curves, and why two of them cannot crossasked 3×What is meant by an indifference curve? Can two indifference curves cross each other? Explain your answer.(6)
(c)
Outside the topics the syllabus namesBeing checked
(6)

3.

18 marks
· ~36 min
(a)
Outside the topics the syllabus namesBeing checked
(6)
(b)
Tax incidence, deadweight loss and subsidiesBeing checked
(6)
(c)(i)Mid-point price elasticity of demand for chocolate: Meera and Kavitaasked 4×The table below shows the total expenditure of Meera and Kavita on chocolates (i) With the mid-point formula, calculate the price elasticity of demand for both Meera and Kavita when the price of chocolate rises from 48…(3)
(c)(ii)Why Meera spends more and Kavita less when chocolate costs moreasked 4×The table below shows the total expenditure of Meera and Kavita on chocolates (ii) Explain why Meera would spend more on chocolates, while Kavita would spend less when the price of Chocolate increases.(3)

4.

18 marks
· ~36 min
(a)(i)
Scarcity, opportunity cost and the PPFBeing checked
(2)
(a)(ii)Aditi's opportunity cost of making one posterasked 4×Aditi and Kabir are both students who work for the college fest. Aditi and Kabir are able to work for only 5 hours a day. The college President tells them that they must create 180 posters for display and call 240…(2)
(a)(iii)Can Aditi and Kabir both gain by helping each other, and on what terms?asked 4×Aditi and Kabir are both students who work for the college fest. Aditi and Kabir are able to work for only 5 hours a day. The college President tells them that they must create 180 posters for display and call 240…(2)
(b)How a minimum wage changes the labour market, and the case for and against itasked 4×In what way does a minimum wage affect equilibrium in the labour market? Are economists in favour of a minimum wage? Give reasons.(6)
(c)
Consumer choice: budget line and indifference curvesBeing checked
(6)

5.

18 marks
· ~36 min
(a)
Tax incidence, deadweight loss and subsidiesBeing checked
(6)
(b)(i)
Consumer and producer surplus, tariffs and quotasBeing checked
(2)
(b)(ii)
Consumer and producer surplus, tariffs and quotasBeing checked
(4)
(c)The equity-efficiency trade-off, and whether the government can improve bothasked 3×Explain the trade-off that exists between equity and efficiency. Can the government improve both equity and efficiency at one and the same time?(6)

6.

18 marks
· ~36 min
(a)
The Coase theorem, and the conditions under which it failsBeing checked
(6)
(b)Games of strategy, with everyday Indian examplesasked 4×What is meant by a game of strategy? Give some examples.(6)
(c)(i)Average variable cost from TC = 400 + 0.2Q²In a perfectly competitive market the price of a good is ₹60. A producer has the total cost and marginal cost functions given below. TC(Q) = 400 + 0.2 Q^2^ MC(Q) = 0.3 Q (i) Write down the equation for the firms average…(1)
(c)(ii)Profit-maximising output at a price of ₹60 when MC = 0.3QIn a perfectly competitive market the price of a good is ₹60. A producer has the total cost and marginal cost functions given below. TC(Q) = 400 + 0.2 Q^2^ MC(Q) = 0.3 Q (ii) Calculate the output (Q) that the firm will…(1)
(c)(iii)Profit at the profit-maximising output, and whether the firm keeps operatingIn a perfectly competitive market the price of a good is ₹60. A producer has the total cost and marginal cost functions given below. TC(Q) = 400 + 0.2 Q^2^ MC(Q) = 0.3 Q (iii) Compute the profit the firm makes if it…(4)

7.

18 marks
· ~36 min
(a)(i)
Supply, demand and market equilibriumBeing checked
(2)
(a)(ii)
Supply, demand and market equilibriumBeing checked
(2)
(a)(iii)
Supply, demand and market equilibriumBeing checked
(2)
(b)Private goods, public goods and club goods comparedasked 4×Differentiate between private, public and club good. Give examples.(6)
(c)
Why correlation need not mean causation, with two casesBeing checked
(6)

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