Unique Paper Code 887
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Introductory MicroeconomicsJanuary 2024, paper 887

BA (Programme) · 8 questions · 10 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. 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. Numbers and theory. 2 numerical parts and 14 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 production possibility frontier, and points on, inside and beyond itasked 6×What is understood by the production possibility frontier? How does the point below and above the production possibility frontier differ from the points on the frontier curve?(6)
(b)Efficiency and equity, and why policy makers must trade one against the otherasked 5×Differentiate between efficiency and equity? Why is it that policy makers often face a trade-off between efficiency and equity?(6)
(c)
Positive and normative economics distinguishedBeing checked
(6)

2.

18 marks
· ~36 min
(a)Price elasticity of demand and the factors that affect itasked 7×Explain what the price elasticity of demand is? Also explain the Factors that affect the price elasticity of demand?(12)
(b)
Price elasticity of demand between points C and F, both ways and by the mid-point methodBeing checked
(6)

3.

18 marks
· ~36 min
(a)
Consumer and producer surplus, tariffs and quotasBeing checked
(12)
(b)
A tax of Rs. 8 a unit on buyers with Qd = 560 - 5p and Qs = 5p + 120Being checked
(6)

4.

18 marks
· ~36 min
(a)A minimum price above equilibrium and a maximum price below it: the effects on the economyasked 7×Consider the following government action and its impact on the economy : (i) If a minimum price is fixed above the equilibrium price (ii) If a maximum price is fixed below the equilibrium price(12)
(b)
Supply, demand and market equilibriumBeing checked
(6)

5.

18 marks
· ~36 min
(a)
Tax incidence, deadweight loss and subsidiesBeing checked
(12)
(b)
Elasticity of demand and supplyBeing checked
(6)

6.

18 marks
· ~36 min
(a)
Consumer and producer surplus, tariffs and quotasBeing checked
(6)
(b)
Consumer and producer surplus, tariffs and quotasBeing checked
(6)
(c)
Absolute and comparative advantage in trade, with an exampleBeing checked
(6)

7.

18 marks
· ~36 min
Externalities, and why markets produce too much under a negative one and too little under a positive oneasked 8×What is meant by externalities? Is it true that private allocation is over-provides when there is a negative externality and under-provides when there is a positive externality? Explain. (6,12)(18)

8.

18 marks
· ~36 min
(a)Market failure and where it comes fromasked 8×Explain market failure? What are the various sources of market failure?(4)
(b)A town's fireworks show: is it efficient, who is Mr. X, and can a private firm supply it?asked 7×Every resident of a small town/likes fireworks and puts a value of Rs. 1500 on the experience of a fireworks show in the Exhibition grounds in the town. On its founding day celebrations. The fireworks show is going to…(8)
(c)Strategic games, with a Diwali discount exampleasked 8×What are strategic games? Explain with an example.(6)

— End of the paper —