EEC-11 Solved Assignment 2018-19
FUNDAMENTALS OF ECONOMICS
(Coverage: Blocks 1 to 10)
Programme Code: BDP
Course Code: EEC-11
Maximum Marks: 100
Note: Answer all the questions.
Long Answer Questions. (Answer in about 500 words each) 15x 2=30
1. (a) How does equilibrium level of income is determined? Which factors do changes in
the national income?
(b) Given Y= C + Y + G, C = C0 + b Y
I = I0 and G = G0 where C0 = 135,
(i) Find the equation for the equilibrium level of income in the reduced form
(ii) Solve for the equilibrium level of income.
2. (a) Distinguish between price elasticity of demand and cross elasticity of demand.
Explain with examples the importance of the concept of elasticity of demand.
(b) Given the demand function Q = 75 – 5P find the price elasticity of demand at P =3
Medium-Answer Questions. (Answer in about 250 words each) 10x 5=50
3. Explain with diagram the three stages of production. Why does law of diminishing
4. Distinguish between demand pull inflation and cost push inflation. Explain with the help
of Phillips curve the trade off between the inflation rate and unemployment rate.
5. Why do monopolies emerge? Do you agree that a monopolist is not free to determine
both price and quantity to be sold as per his whims and fancy? Give reasons.
6. Why does trade take place between the two countries? Explain Heckscher-Ohlin
approach in this regard.
7. What do you understand by externalities? Explain the Piguobian method and Coase
method for dealing with externalities.
Section – C
Short Answer Questions. (Answer in about 100 words each) 10x 2=20
8. Distinguish between any three of the following:
i) Average cost and marginal cost.
ii) Multiplier and Accelerator.
iii) Positive and normative economics.
iv) Direct tax and Indirect tax.
v) Giffin good and normal good.
9. Write short note on any three of the following:
i) Consumer’s surplus
ii) Homogeneous production function
iv) Implicit costs
v) Income effect