Unique Paper Code 3105
Revised 0 of 8

Introductory Microeconomics2022–23, paper 3105

BA (Programme) · 8 questions · 9 parts still being checked

Duration: 3 HoursMaximum Marks: 75

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. Supply, demand and market equilibrium (8 papers), Games and strategic interaction (8 papers), Externalities (8 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. Pace. Two minutes a mark: about 30 minutes for each 15-mark question, with nothing spare in 3 hours. Move on when the time is up.
  4. 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.

15 marks
· ~30 min
(a)Two ways of finding the best choice: comparing totals and comparing changesasked 5×Explain the meaning of, and the steps that are involved in, (i) optimization in levels and (ii) optimization in differences.(10)
(b)Positive and normative economics comparedasked 5×Differentiate between positive and normative economics. (10,5)(5)

2.

15 marks
· ~30 min
(a)The production possibilities curveasked 6×What is Production possibilities curve (PPC)?(3)
(b)How comparative advantage leads to specializationasked 7×Explain how comparative advantage leads to specialization using an example.(7)
(c)Strategic games, with an airline fare exampleasked 8×What are strategic games? Explain using an example. (3,7,5)(5)

3.

15 marks
· ~30 min
(i)
Supply, demand and market equilibriumBeing checked
(5)
(ii)
Supply, demand and market equilibriumBeing checked
(5)
(iii)
Supply, demand and market equilibriumBeing checked
(5)

4.

15 marks
· ~30 min
(a)The buyer's problem in three steps, and the rule that marks the best choiceasked 6×Briefly explain the three steps in the buyer's optimization problem. What is the decision rule at equilibrium.(9)
(b)A price rise and total revenue under three elasticities of demandasked 7×Explain how a rise in price affects the total revenue when the price elasticity of demand is (i) more than 1 (ii) lower than 1 (iii) equal to 1 (9,6)(6)

5.

15 marks
· ~30 min
(a)
Outside the topics the syllabus namesBeing checked
(10)
(b)
Economic profit and accounting profitBeing checked
(5)

6.

15 marks
· ~30 min
(a)How the invisible hand allocates a good efficiently among buyers and sellersasked 8×Explain how invisible hand allocates goods efficiently among buyers and sellers.(9)
(b)
Is the equilibrium of a perfectly competitive market Pareto efficient?Being checked
(6)

7.

15 marks
· ~30 min
(a)
The Coase theorem, and why free access to a common property leads to an inefficient outcomeBeing checked
(10)
(b)
Why the invisible hand fails to allocate resources efficiently to a public goodBeing checked
(5)

8.

15 marks
· ~30 min
Price ceilings, floors and rationingBeing checked
(15)

— End of the paper —