Annual Examination 1997: Micro-Economics

Micro-Economics
Annual Examination 1997

Time allowed: 3 hours Maximum Marks: 100
1) Attempt any five questions.
2) All questions carry equal marks.
1. Briefly distinguish between:

(a) Economies of scale and Diseconomies of scale;
(b) Cardinal and Ordinal utility;
(c) Explicit cost and Implicit cost;
(d) Price consumption curve and Income consumption curve;
(e) Demand shifters and Supply shifters;
(f) Law of diminishing return and Returns to scale; and
(g) Firm and an Industry.
2. (a) What are the assumptions of MONOPOLY MARKET ?

(b) Compare the LONG-RUN EQUILIBRIUM OF A PERFECTLY
COMPETITIVE MARKET with that of LONG-RUN EQUILIBRIUM OF A
MONOPOLY market.
3. (a) Define the concept of GAME THEORY in Economics.

(b) Draw all the SHORT-RUN COST CURVES and explain their relationships.
4. Explain and illustrate PRICE EFFECT assuming commodity X as inferior.

5. (a) Explain the MARGINAL PRODUCTIVITY THEORY OF LABOUR DEMAND.

(b) The demand for labour, like the demand for other factors of productions, is a
derived demand. Discuss.

6. (a) Starting from a position of GENERAL EQUILIBRIUM for entire economy, if for any
reason the market supply for commodity X increases, examine what happens in (i)
the markets for commodity X, its substitutes and complements, (ii) the factor
markets, and (iii) to the distribution of income.
(b) Can an economy over reach GENERAL EQUILIBRIUM in the real world?
7. Show graphically the three STAGES OF PRODUCTION and explain the shape of the

average product of labour and marginal product of labour curves in terms of the shape of
the total product curve.

8. Write short notes on any two of the following:

(a) Economic rent,
(b) Production possibility frontier,
(c) Marginal utility approach,
(d) Elasticity of demand
9. Critically examine the marginal rules of WELFARE ECONOMICS.

-------------------------------------

1. Define the term EQUILIBRIUM and distinguish between the following with the help of
suitable examples:
(a) Partial and General Equilibrium,
(b) Stable and Unstable Equilibrium.
2. A consumer obtains maximum satisfaction from the purchase of the two goods when
the MARGINAL RATE OF SUBSTITUTION (MRS) between these two goods is equal to
their price ratio. Explain with the help of Indifference Curves.

3. Define MARGINAL PHYSICAL PRODUCT (MPP) and MARGINAL REVENUE

PRODUCT (MRP). Explain why maximisation of profit requires that each factor price
must be equal to the factor’s Marginal Revenue Product (MRP).
4. (a) What are the basic points of difference between PERFECT

COMPETITION and MONOPOLISTIC COMPETITION?
(b) Explain with the suitable diagram the equilibrium of a firm in the SHORT RUN
UNDER PERFECT COMPETITION. When should a firm decide to shut down?
5. Discuss the factors which contribute to the ‘U’ shape of the AVERAGE COST
CURVE (ACC). Explain why MARGINAL COST CURVE (MCC) cuts AC and AVC
curves at the bottom of their ‘U’s?
6. In an industry there are six large firms which account for 95% of the net output and
employment. Assuming there is no collusion between rivals in the firm, explain how the
firms might go about setting their price and output?
7. Define ELASTICITY OF DEMAND and distinguish between Point Elasticity and Arc

Elasticity. Explain the methods of measuring point elasticity.
8. (a) Define DISCRIMINATING MONOPOLY. Under what conditions

discrimination is possible and profitable?
(b) Explain the Price-Output Policy of a Discriminating Monopolist.
9. Explain the marginal rules to be followed to maximise WELFARE, if there are two inputs
to be allocated for the product of different commodities.
10. Write short notes on any two of the followings:
(a) Giffen paradox,
(b) Consumer’s surplus,
(c) Game theory,
(d) Economic rent.
-------------------------------------

1. Define and explain MICRO ECONOMICS, MACRO ECONOMICS, NORMATIVE

ECONOMICS and POSITIVE ECONOMICS with suitable examples. Also discuss their
relationships.

2. State with reasons if the followings are true or false:

(a) INDIFFERENCE CURVES have been drawn in such a way that they are convex
to origin.
(b) A consumer’s demand curve can be derived directly from tangency points of
Indifference Curves.
3. (a) Delineate three STAGES OF PRODUCTION using APP (Average Physical Product)

and MPP (Marginal Physical Product). Will increasing a variable input in its region
(assume the input is in 2nd stage) leads to an increase or decrease in total outputs?
(b) What are the relationships between Marginal Cost and Marginal Product,
Average Cost and Average Product?

4. Define ELASTICITY OF DEMAND. What are its types? Discuss with suitable

examples. How is the total revenue related to the price elasticity of demand?

5. Equilibrium price is the result of INTERACTION OF DEMAND AND SUPPLY. ‘When

demand increases, the equilibrium price will always rise,’ is this always true? Explain
with the help of diagrams.

6. (a) Why only increase in output level, minimise the profit in perfect competition?
(b) Why does PERFECT COMPETITION earn normal profit in the long run and super
normal profit in short run? Explain with the help of diagram.

7. What are the CHARACTERISTICS OF THE OLIGOPOLISTIC MARKET structure?
Why an oligopolistic demand curve might be kinked?
8. What is WELFARE ECONOMICS? How does it relate to PARETO OPTIMALITY? What

implications do these concepts have for efficiency and equity in Capitalistic System?


(a) Monopoly,
(b) Modern theory of wages,
(c) Classical theory of interest,
(d) Opportunity cost.
-------------------------------------

1. (a) Discuss various axioms of ORDINAL THEORY OF CONSUMER

PREFERENCE. Show that two INDIFFERENCE CURVES cannot intersect each
other.
(b) Using Ordinal Theory, explain how would you derive the demand curve for a
commodity?

2. (a) In the market for commodity X, suppose currently the price is such that the plans of
industry producing X and the plans of all households who consume X do not
match. How would the market help individuals co-ordinate their plan?
(b) Assume now that the incomes of consumers increase, how and why would
equilibrium price and quantity of good X change?

3. (a) Draw the short-run total cost and total variable cost curves for a typical firm. From
these derive the Average Fixed Cost (AFC), Average Variable Cost (AVC), Average
Total Cost (ATC) and Marginal Cost (MC) curves indicating all critical points.
(b) Using the short-run average and Marginal cost curves derive the long-run
cost curves.

4. Explain the concept of ELASTICITY OF SUBSTITUTION IN PRODUCT. How does the
elasticity of substitution determine the distribution of income between labour and capital?

5. (a) Indicate the underlying assumptions for perfectly elastic demand curve faced by a
firm under PERFECT COMPETITION.
(b) Using the total revenue total cost curves derive the short-run profit
maximising condition for a firm under perfect competition.

6. (a) Explain fundamental differences between the operations of a perfectly competitive

firm.
(b) Why and how would a monopolist charge different price for the same
commodity? Explain.

7. (a) Define PARETO OPTIMALITY. State the conditions that must hold for Pareto
Optimality.
(b) Explain the effects of externalities on Pareto Optimality conditions.
8. Critically explain the CLASSICAL THEORY OF INTEREST.


(a) Elasticity of demand,
(b) Law of diminishing returns,
(c) Ricardian theory of rent.
-------------------------------------

1. (a) Define the term EQUILIBRIUM in Economics.

(b) Distinguish between:
(i) Stable and Unstable Equilibrium,
(ii) Partial and General Equilibrium.
2. (a) What is meant by PRICE ELASTICITY OF DEMAND? How is it measured?

(b) Describe the kinds of elasticity of demand.

3. Explain the difference between PERFECT COMPETITION and MONOPOLY with

respect of the following:
(a) The number of firms in the industry,
(b) Type of output produced,
(c) The shape of demand curve,
(d) The entry and exit of firms from the industry,
(e) The condition of profit maximisation in the short-run.
4. (a) State and explain the LAW OF DIMINISHING RETURNS with the help of a schedule
and a diagram.
(b) Why is it especially applicable in agriculture sector?
5. Differentiate between the following (any four):

(a) Income consumption curve and Price consumption curve,
(b) Expansion in demand and Rise in demand,
(c) Indifference curve and Isoquant,
(d) Short-run and Long-run,
(e) Implicit cost and Explicit cost,
(f) Average revenue and Marginal revenue.
6. (a) What is meant by CONSUMER EQUILIBRIUM?

(b) Prove with the help of diagram that price effect is the combination of income
and substitution effect.

7. (a) Define MONOPOLISTIC COMPETITION and explain its characteristics.

(b) Explain with the help of diagram the equilibrium of a firm under Monopolistic
Competition in the long-run.

8. Explain LIQUIDITY PREFERENCE THEORY OF INTEREST and compare it with

Classical Theory.

9. Write detail note on any two of the following:
(a) Price discrimination,
(b) Game theory,
(c) Marginal rules of Welfare Economics,
(d) Marginal productivity theory.
-------------------------------------

1. (a) Define the term EQUILIBRIUM and explain its significance in economic analysis.

(b) State the different types of equilibrium with examples.
2. (a) Explain CONSUMER’S EQUILIBRIUM with the help of Indifference Curve technique.

(b) How would the equilibrium of a consumer in respect of a particular commodity
be affected if:
(i) the price of the commodity rises,
(ii) the income of the consumer fails.
3. (a) What are the salient features of PERFECT COMPETITION? Explain the firm’s
equilibrium under perfect competition in the short-run.
(b) Compare the long-run equilibrium of a firm under Perfect Competition with the
long-run equilibrium of Monopoly market.

4. State and explain the MARGINAL PRODUCTIVITY THEORY with the help of schedule

and a diagram.

5. (a) What is meant by MARGINAL RATE OF SUBSTITUTION?

(b) State and explain the Law of Diminishing Marginal Rate of Substitution.
6. State and explain the LAW OF VARIABLE PROPORTIONS. Illustrate

diagrammatically.

7. Critically examine the marginal rules of WELFARE ECONOMICS.

8. Explain the concept of GAME THEORY in economics with the help of examples.


(i) Ricardian
theory of rent,
(ii) Price elasticity of demand and its significance,
(iii) Law of equi-marginal utility,
(iv) Kinky demand curve.
Time Allowed: 3
hours Maximum
Marks: 100
Instructions:
1) Attempt any 5 questions,
2) Marks are indicated against each question.
1. (a) Describe briefly the different types of diagrams generally used for the presentation of
a statistical data (10)
(b) The amount of money collected by each of 300 children, involved in a sponsored

walk, was recorded as follows:
Amount collected (in Rs.) 0–1 2–4 5 – 10 11 – 15 16 – 25

No. of children 20 93 90 58 39
Draw a Histogram to represent these

data. (10)
2. (a) Explain clearly the meaning, the best method of computing and the use of the following:
(i) Geometric Mean,
(ii) Harmonic
Mean.
(10)
(b) Following frequency distribution show the weights (recorded to the
nearest kg.) of 100 students of University of Karachi.
Table: Weights of 100 students at University of Karachi
Weights (in kgs.) 60 – 62 63 – 65 66 – 68 69 – 71 72 – 74

No. of students 5 18 42 27 8
Based on the given table, calculate:
(i) Arithmetic Mean,
(ii) Standard
Deviation.
(10)
3. Give answers to the following questions:
(a) If A and B are mutually exclusive events and P(A) = 0.3 and P(B) = 0.5 then find
P(A’∩B). (4)
(b) In how many ways can 5 differently coloured marbles be arranged in a

row? (4)
(c) A coin is tossed and a dice is rolled once. List the elements of the sample
space. (4)
(d) In how many ways can a committee of five be chosen of nine

people? (4)
(e) What is the probability that at least one head appears in 3 tosses of a fair
coin? (4)
4. (a) Define Standard Deviation. State and prove algebraically the characteristics of

standard deviation. (10)
(b) Following table shows the distribution of the maximum load in kilo-Newtons

supported by certain cables produced by a
company:
(10)
Maximum load (kn) No. of Cables

93 – 97 2
98 – 102 5
103 – 107 12
108 – 112 17
113 – 117 14
118 – 122 6
123 – 127 3
128 – 132 1
5. (a) Discuss the two techniques by which correlation may be

studied. (10)
(b) The demand for a commodity in relation to its price is given as
under:
Price (in Rs.) 4 42 45 47 50 52 60

0
Demand (in kgs.) 2 36 28 25 20 30 18
6
Fit the regression line, using the Least Square Method, and predict demand when
price is Rs. 48. (10)
6. (a) Briefly explain the following:
(i) Kurtosis,
(ii) Skewness.
(12)
(b) Ten speakers were ranked by two judges as follows:
Speakers A B C D E F G H I J
Ranks given by X 4 7 3 5 1 6 2 10 8 9
Ranks given by Y 6 5 2 4 1 9 3 10 8 7
Does this ranking suggests that the judgement is consistent? Support your answer
with facts. (8)
7. (a) Show that Lespeyre’s index number formula does not satisfy the (i) time reversal test
and (ii) factor reversal
test.
(8)
(b) Following table shows a country’s average wholesale price and
production of milk, butter and cheese for the year 1949, 1950 and
1958:
Quantity produced
Price (per kg.)
(in million of kgs)
1949 1950 1958 1949 1950 1958

Milk 3.95 3.89 4.13 9675 9717 10436
Butter 19.49 62.2 59.7 117.7 115.5 115.5
Cheese 1949 35.4 38.9 77.93 74.39 82.79
Using the table’s data, compute the Laspayre’s price index and Paasche’s price
index for 1958 with 1949 as base
year.
(12)
(a) Interpolation,
(b) Classification of time series movements,
(c) Relative measure of dispersion,
(d) Ideal
average.
(20)
9. (a) Define and explain with suitable examples the:
(i) Mathematical probability, and
(ii) Statistical
probability.
(10)
(b) A government agency employees 100 clerks – typists, classified by

sex and marital status as shown in the table given below:
Marital Status
Sex Total
Single Married
Male 16 24 40
Female 24 36 60
If an employee is picked at random from 100 employees, what is
the probability that he or she is:
(i) single?
(ii) single, given that the employee is

male? (10)
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1. Teacher in primary schools are classified on the basis of daily wages as

under:
Wages (in Rs.) No. of Teachers

100 – 103.9 10
104 – 107.9 20
108 – 111.9 30
112 – 115.9 35
116 – 119.9 30
120 – 123.9 25
124 – 127.9 20
128 – 131.9 15
132 – 135.9 10
136 – 149.9 3
140 – 143.9 2
(a) Determine the Mean and the Standard Deviation daily wages.
(b) Determine, also the percentage of teachers drawing:
(i) more than average wage,
(ii) less than (mean + S.D.) wage,
(iii) if the management decides to raise the wages 15%, how the consistency of
wages would be effected?
2. (a) Define and distinguish between:
(i) Primary and Secondary data,
(ii) Census and Sample survey,

(iii) Partial and Multiple correlation.
(b) A series consisting of 10 observations found to have mean 50 and

standard deviation 4, later two observations (48 and 50) were replaced by (45
and 55), determine the new Mean and Variance.
3. Given the following data for 1980 – 1991 on annual disposable personal
income (X) and personal consumption expenditure (Y) in billion
rupees. Estimate, using an appropriate linear regression, the level of
consumption in 1992 if the disposable income is Rs. 100 million. Also
determine the value of r:
X 45 51 56 60 62 67 71 74 77 82 93 95
Y 43 48 55 58 59 62 65 70 73 80 89 91
4. (a) Define and explain the following:
(i) Probability,
(ii) Mutually exclusive events,
(iii) Equality likely events.
(b) State and explain with examples or proof the characteristic features of Arithmetic
Mean.
5. Referring the data in Question 1 above, determine and interpret:
(i) the lowest wage of the top 15 percent of the teachers,
(ii) the highest wage of the bottom 25 percent of the teachers,
(iii) the Coefficient of Skewness (β1).
6. (a) Explain the significance of index number in economics.
(b) For the data given below construct the Marshal’s and Fischer’s
indices for 1995 with 1990 as base:
Prices Quantity
Items
1990 1995 1990 1995
A 12 15 20 18
B 10 12 10 12
C 15 12 15 12
D 18 20 12 12
E 20 25 10 15
7. (a) First two moments for a set of 10 observations about 15 as origin are given as
under:
μ’1 = 1.5 and μ’2 = 76.5
Determine the first two Absolute Moments and Raw Moments about 18 as origin.
(b) Let X be a normally distributed random variable having a mean 55 and a standard
deviation 8. Determine the probabilities for the following statements:
(i) P(X > 50)
(ii) P(X < 53)
(iii) P(50 < X < 58)
(iv) P(45 < X < 53)
(v) P(58 < X < 68)
8. Given the following information:
log 2 = 0.3010
log 3 = 0.4771
log 5 = 0.6990
log 7 = 0.8451
log 10 = 1.0000
Using the suitable formula interpolate the values of log 4, log 20, log
28 and log 40.
(i) Time series analysis,
(ii) Organisation of sample survey,

(iii) Method of least square,
(iv) Rank correlation.
----------------------------------------
1. (a) Not available.
(b) A list was given to 200 candidates for few vacancies in a
bank. Marks obtained in the test are presented in the following table:
Marks No. of Candidates

1–6 10
7 – 12 30
13 – 18 40
19 – 24 45
25 – 30 35
31 – 36 20
37 – 42 15
43 – 48 5
(a) Determine the Mean and the Standard Deviation.
(b) If the top 10 percent of the candidates are to be considered for employment what
is the lowest limit of marks?
(c) Approximately what percent of candidates earned more than marks.
2. For the data given in Question 1 (b) above, determine:
(a) First three Raw Moments about 21.5 as origin,
(b) First three True Moments,
(c) The above value of (β1) and comment about skewness of the data drawing a
rough sketch of the distribution.
3. Given below is a demand schedule, where X is the price per unit in

rupees and Y is the quantity of a good in thousand units:
X 10 12 15 17 20 21 25 30
Y 50 45 42 40 39 37 35 34
(a) Estimate the demand function and predict the demand when price is Rs. 32 per
unit.
(b) Estimate the average revenue function and predict the average revenue when
55,000 units were demanded.
(c) Determine the Correlation Coefficient between X and Y.
4. Distinguish between:
(a) Discrete and Continuous variables,
(b) Primary and Secondary data,
(c) Time series and Cross section data,
(d) Measures of location and Measures of dispersion,
(e) Sample survey and Census.
5. (a) A set of 10 observations found to have a mean 55 and variance 15. Later, on

checking, it is discovered that 2 observations 45 and 55 were mistakenly
recorded. While the correct observations were 40 and 60. Determine the correct
Mean and Variance.
(b) State and explain the characteristics of Mean and Standard Deviation.
6. (a) State and explain the steps involved in the construction of index

number.
(b) The group indices and corresponding weights obtained from a

household income and expenditure survey are given as under. Construct the
case of Living Index:
Group Index Weight

Food 115 0.20
Rent 110 0.25
Utilities 125 0.15
Education 130 0.20
Clothing 135 0.10
7. Given below are the population of a town in millions during the past five
census. Interpolate the population of the town during 1991:
Years 1951 1961 1971 1981 1998

Population
2.35 2.47 2.59 2.72 3.00
(in millions)
8. (a) Let X be a normally distributed random variable having a mean 57 and standard

deviation 8, determine the following probabilities:
(i) P(X > 50)
(ii) P(X > 62)
(iii) P(50 < X < 67)
(iv) P(62 < X < 70)
(v) P(X = 60)
(b) Three digit number are formulated using the digits 0, 1, 2, 3, 4, 5. No digit repeated in
the same number. Find the probability of:
(i) Even numbers,
(ii) Odd numbers,
(iii) A number greater 450.
9. (a) Write a short note on Time Series Analysis.
(b) Fit a Second Degree Trend and calculate the Trend Values for the
following data:
1980 1981 1982 1983 198 1985 1986 1987 1988
Years 4
Sales
(million 25 28 33 38 45 53 64 77 95
Rs.)
----------------------------------------
1. Weekly wages in US$ for 250 high school teachers of a small town in
Minnesota are given as under:
Wages No. of Teachers
(US$)
Less than 200 15
201 – 225 28
226 – 250 45
251 – 300 55
301 – 350 52
351 – 375 30
376 & above 25
(a) Determine the Mode and Median wages.
(b) If 35% of the teachers are exempted from tax, what is the lowest limit of wages
to be taxed.
(c) Determine the variability of the data using a suitable Measure of Dispersion.
(d) Approximately what percent of teachers draw more than $300 per week.
2. First three moments about the 14 as origin are 2, 20 and 104

respectively determine:
(a) First three Moments about the Mean, and the Mean,
(b) First two Moments about:
(i) 15 as origin,
(ii) Zero as origin.
(c) Comment about the skewness of the data.
3. Quarterly sales receipts of an ice-cream factory for 3rd quarter of 1994

through 3rd quarter of 1997 are given in million rupees. Fit a Parabolic
Trend and estimate the Seasonal Component:
Sales
(million 110 115 120 125 125 120 110 135 130 125 120 140 135
Rs.)
4. (a) What are the desirable characteristics of a good Sample. Describe an appropriate

Sampling Methodology if you are to draw a sample from the Karachi City.
(b) Construct Marshal’s and Fischer’s indices for 2000 which base
1995 from the following:
1995 2000
Items
Price Quantity Price Quantity
A 25 10 30 12
B 20 15 22 20
C 10 12 15 15
D 12 8 15 10
E 15 20 18 25
5. (a) Given below the consumption expenditure (X) and family’s income (Y) in US$ for 8
households:
X 180 270 260 190 250 240 270 230

Y 200 300 300 220 290 280 280 250
Construct an appropriate Regression and predict the
consumption of a family with an income $310. Also determine the
Correlation Coefficient.
(b) Assign ranks to the values of X and Y in part (a) above and
determine the Rank Correlation.
6. (a) Given below are the values of some function corresponding to given values of
x. Interpolate, using an appropriate method, the value of function for x = 8.
x 5 10 15 20 25
f(x) 6.859 4.587 4.073 3.850 3.725
(b) Draw the graph line for the data given in part (a) above, and estimate f(x) for x = 8.
7. (a) State the advantages and limitations of diagrammatic and graphic

presentation of statistical data.
(b) Construct Histogram, Frequency Polygon and Less Than Ogive for
the data given below:
Marks 1–4 5–8 9 – 12 13 – 16 17 – 20 21 – 24 25 – 28
Frequenc 2 5 8 10 6 3 1
y
8. (a) Find the probability of randomly selected 8 apples and receiving 25% bad from a
basket containing 15 apples of which 5 are spoiled.
(b) Pakistan and New Zealand are going to play a series of one-day
international. The team that wins 3 games wins the series (ties not
allowed). If Pakistan's probability of winning a single is 0.6, what is the
probability that Pakistan wins the series?
9. Write short notes on the following:
(a) Secondary data,
(b) Organisation of a sample survey.
----------------------------------------
1. Management of Kentucky Friend Chicken operating in Karachi pays

their lower grade employees in US$ on monthly basis as under:
Wages No. of Workers

120 – 135 10
135 – 150 22
150 – 165 25
165 – 180 32
180 – 195 48
195 – 210 33
210 – 225 22
225 – 240 16
240 – 255 12
(a) Determine the Mean and Variance

wages. (10)
(b) Determine the Geometric Mean of

wages. (7)
(c) If workers drawing more than (X=σ) wages are charged to tax, what is the lowest
limit of wage to be
taxed?
(3)
2. For 10 observations given the following:

Determine the following:
(a) Three Absolute
Moments, (3)
(b) Three True
Moments,
(6)
(c) First two Raw Moments about 15 as

origin, (8)
(d) What are the values for the Mean and

Variance. (3)
3. KESC bills its consumers on progressive rate. For a sample of five

households the units consumed (x) and the amount of bill in Rs. (y) are
given below:
x 300 500 600 700 1000

y 350 1200 1500 2000 3500
(a) Find an equation to estimate the amount of bill as a function of units

consumed. (8)
(b) Determine the simple

correlation. (5)
(c) Estimate the amount of bill for a consumer which consumed 550

units. (2)
(d) State and prove the characteristic feature of Correlation Coefficient with respect
to the addition and multiplication by a
constant.
(5)
4. (a) Describe Sampling Methodologies for:

(i) A small population like that of a steel mill,
(ii) A big population like that of the Karachi city,
(iii) A very big population like that of

Pakistan. (12)
(b) Discuss the relative merits and demerits of a Census and Sample

Survey. (8)
5. (a) A shipment of 15 monitors contain 4 defective monitors. In how many ways a cyber
café purchases 5 of these monitors and receives at most 2 defective
monitors. (10)
(b) In a single throw of an unbalanced dice the probability an even number to occur is
5/8. If the dice is rolled 6 times, what is the probability of getting an odd number
atleast 4 times. (10)
6. (a) What is an Ideal Index Number? Explain how the base of an index number series
can be shifted to a more recent
period?
(8)
(b) Construct Paasche’s and Marshal’s indices for 2001 with 2000 as base from the
following data:(12)
Price Quantity
Item
2000 2001 2000 2001
A 15 18 10 8
B 10 12 8 10
C 20 25 5 4
D 22 25 12 15
E 25 30 6 10
7. Fit a Straight-line Trend to the data given below for the period 1991 to
2001. Also isolate the Seasonal Component using a multiplicative
model:
(20)
220 225 232 247 249 250 254 258 265 275 300
8. (a) Given below are the values of a function for some specified values of x, interpolate
the value of the function for x =
11:
(12)
x 10 12 15 20 23
f(x) 1000 1728 3375 8000 12167
(b) Given:
x 10 12 18 20 23 25 28
Determine the following:
(i) ,
(ii) ,
(iii) ,
(iv)
.
(8)
(a) Skewness,
(b) Sheppard’s correction,
(c) Principle of least
square. (2
0)
----------------------------------------
1. In a medical study to determine the normal limits of blood cholesterol

some 220 adult healthy males were examined with respect to their level
of cholesterol. Its distribution is given as under:
Level of Cholesterol (mg.) No. of Persons

Less than 100 18
100 – 110 22
110 – 115 28
115 – 120 30
120 – 130 35
130 – 145 43
145 – 165 24
165 – 175 12
175 and above 8
(a) Determine the Median and Mode level of

cholesterol. (10)
(b) Determine the Quartile Deviation (Q.D.) of the

data. (6)
(c) If median + 2Q.D. are considered to be the normal limits, what are the normal limits
and what percent of persons have normal level of cholesterol
approximately. (4)
2. Marks obtained by a group of 10 students out of 50 are given as under:
40 42 38 45 50 47 36 35 48 45
(a) Determine the first three Raw Moments about 45 as

origin. (7)
(b) Determine the first three True Moments and comment about

Skewness. (7)
(c) From the raw moments obtained in (a) above shift the origin of the first two to
40. (6)
3. Proficiency in economics (measured by marks obtained in economics) is

thought to be influenced by the proficiency in mathematics (measured
by marks obtained in mathematics). A group of 10 students obtain
marks as follows:
Marks in maths 50 55 58 65 55 65 66 59 65 70
Marks in eco. 75 82 78 85 77 82 88 78 84 90
(a) Construct an appropriate Regression, determine the value of r2 and interpret your

result. (12)
(b) Determine the Spearman’s Rank Correlation for the Coefficient for the above
data. (8)
4. (a) Explain, using examples, the effect of a change in the units of measurement and
scale on the following:
(i) Arithmetic
mean,
(4)
(ii) Standard
deviation,
(4)
(iii) Coefficient of
variation.
(2)
(b) What is the lowest limit of cholesterol of the:
(i) top 15% of persons,
(ii) next 12% of persons for the data of Question 1

above. (10)
5. (a) Two dices are rolled simultaneously and the product of their outcome is recorded:
(i) List the elements of the sample space,
(ii) Find the probability of getting perfect square,
(iii) Find the probability of a number multiple of

6. (5)
(b) A coin biased so that the probability of a head is 2/3. Find the probability of exactly
three heads in 5 tosses of that
coin.
(5)
(c) Find the probability of three digit even number greater than 450, from the digits 0, 1,
2, 3, 4, 5 and 6 (no digit repeat in the same
number).
(5)
(d) From the letters of the word ‘STATISTICS’, find the probability of all words starting
and finishing with the
letters.
(5)
6. (a) Given below is a schedule of prices and the profit earned at each of these prices of a
product. Interpolate, using a suitable method, the profit from a firm when the price is
Rs. 18: (12)
Price (Rs.) 10 13 15 20
Profit
35 45 48 55
(million Rs.)
(b) Not available.
7. (a) Construct Fisher’s and Marshal’s indices for 2002 with 2001 as base from the
following: (10)
Price Quantity
Items
2001 2002 2001 2002
A 20 15 30 25
B 25 30 10 8
C 18 20 20 25
D 30 25 25 30
E 15 18 22 28
(b) Construct 4-year moving averages centred for the following sales in
million rupees for the period 1992 to 2002: (10)
220 225 232 247 250 255 258 265 278 300 325
8. Write short notes on any two of the

following:
(20)
(a) Time series analysis,
(b) Organisation of sample survey,
(c) Sources of secondary data.

Annual Examination 1997: Micro-Economics

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Annual Examination 1997: Micro-Economics

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Micro-Economics

Annual Examination 1997

Time allowed: 3 hours Maximum Marks: 100

1) Attempt any five questions.

2) All questions carry equal marks.

1. Briefly distinguish between:

(b) Cardinal and Ordinal utility;

(c) Explicit cost and Implicit cost;

(d) Price consumption curve and Income consumption curve;

(e) Demand shifters and Supply shifters;

(f) Law of diminishing return and Returns to scale; and

(g) Firm and an Industry.

2. (a) What are the assumptions of MONOPOLY MARKET ?

3. (a) Define the concept of GAME THEORY in Economics.

4. Explain and illustrate PRICE EFFECT assuming commodity X as inferior.

5. (a) Explain the MARGINAL PRODUCTIVITY THEORY OF LABOUR DEMAND.

(b) Can an economy over reach GENERAL EQUILIBRIUM in the real world?

7. Show graphically the three STAGES OF PRODUCTION and explain the shape of the

8. Write short notes on any two of the following:

(b) Production possibility frontier,

(c) Marginal utility approach,

9. Critically examine the marginal rules of WELFARE ECONOMICS.

Annual Examination 1998

(a) Partial and General Equilibrium,

(b) Stable and Unstable Equilibrium.

3. Define MARGINAL PHYSICAL PRODUCT (MPP) and MARGINAL REVENUE

4. (a) What are the basic points of difference between PERFECT

7. Define ELASTICITY OF DEMAND and distinguish between Point Elasticity and Arc

8. (a) Define DISCRIMINATING MONOPOLY. Under what conditions

(b) Explain the Price-Output Policy of a Discriminating Monopolist.

10. Write short notes on any two of the followings:

Annual Examination 1999

1. Define and explain MICRO ECONOMICS, MACRO ECONOMICS, NORMATIVE

2. State with reasons if the followings are true or false:

3. (a) Delineate three STAGES OF PRODUCTION using APP (Average Physical Product)

4. Define ELASTICITY OF DEMAND. What are its types? Discuss with suitable

5. Equilibrium price is the result of INTERACTION OF DEMAND AND SUPPLY. ‘When

8. What is WELFARE ECONOMICS? How does it relate to PARETO OPTIMALITY? What

9. Write short notes on any two of the following:

(b) Modern theory of wages,

(c) Classical theory of interest,

Annual Examination 2000

1. (a) Discuss various axioms of ORDINAL THEORY OF CONSUMER

6. (a) Explain fundamental differences between the operations of a perfectly competitive

8. Critically explain the CLASSICAL THEORY OF INTEREST.

9. Write short notes on any two of the following:

(b) Law of diminishing returns,

(c) Ricardian theory of rent.

Annual Examination 2001

1. (a) Define the term EQUILIBRIUM in Economics.

(i) Stable and Unstable Equilibrium,

(ii) Partial and General Equilibrium.

2. (a) What is meant by PRICE ELASTICITY OF DEMAND? How is it measured?

3. Explain the difference between PERFECT COMPETITION and MONOPOLY with

(b) Type of output produced,

(c) The shape of demand curve,

(d) The entry and exit of firms from the industry,

(e) The condition of profit maximisation in the short-run.

5. Differentiate between the following (any four):

(b) Expansion in demand and Rise in demand,

(c) Indifference curve and Isoquant,

(d) Short-run and Long-run,

(e) Implicit cost and Explicit cost,