ECO402 Midterm Past Paper 2013

Rana Abubakar Khan

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ECO402 MIDTERM LATEST SOLVED QUESTIONS

Here You can read ECO402 midterm 2013 latest solved questions answers for preparation of Mid Term Exam fall 2016.

Total Questions: 27

Total MCQs of 1 Mark: 22

Total Short Subjective Question of 3 Marks:3

Total Long Subjective Question of 5 Marks:2

What are consumer surplus and its benefits?

How would the learning curve influence your decision?

What is the short-run market supply curve?

What does the point show which is above the indifference curve?

Which type of probability has been discussed in the scenario subjective or objective?

what would be condition of profit max. when a firm is working in perfect competition in:

marginal cost and marginal revenue total cost and total revenue

(1.5+1.5=3 marks).

Consumer spends all his income on two goods; food and clothing then: what is the shape of budget line what be the change in budget line when the price of clothing increase from 10 to 20

(show graphically)

(1.5+1.5=3 marks)

Calculate expected value (3 marks)

What other shapes of isoquants are possible, and why, explain graphically. (1+2+2=5 marks)

A table was given in which some values were to be found..(MP of variable input, total output, average output) (5 marks)

3 Question of 3 Marks each:

1. Differentiate between arc elasticity and point elasticity with formulas.
2. Differentiate between the slope of budget line and the slope of indifference curve.
3. A table was given with Price, Quantity and Total Cost and the Revenue cost was supposed to find.

2 Questions of 5 Marks each:

1. The question was to find the learning curve equation.
2. Theoretical question about elasticity of demand.

Define the Diminshing Marginal Utility & Equi-Marginal Utility.(3)

Diminshing Marginal utility:

A law of economics stating that as a person increases consumption of a product - while keeping consumption of other products constant

Equi-Marginal Utility:

This theory states that a rational consumer spent his total budget between or among the goods he will derived marginal utility from the last money purchased of goods.

Define Consumer Surplus and describe its benefits briefly. (3) Consumer surplus is a measure of the welfare that people gain from the consumption of goods and services, or a measure of the benefits they derive from the exchange of goods.

Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay (i.e. the market price for the product). The level of consumer surplus is shown by the area under the demand curve and above the ruling market price as illustrated in the diagram below:

Describe the followings:

a) Marginal Cost and Marginal Revenues

Marginal cost: The marginal cost of production is the increase in total cost as a result of producing one extra unit.

Marginal Revenues: Marginal revenue is the increase in revenue from selling one more unit of a product. It differs from the price of the product because it takes into account the effect of changes in price.

b) Total Cost and Total Revenues

Total cost: Total cost is an economic term that refers to the sum of all costs, including the fixed costs and variable costs.

Total Revenues: The total amount of a company's sales and other sources of income

Total sales revenue and other revenue for a particularperiod.

When do the economics of scope exits? Spout your answer with the help of Example. How can u measure the degree of economics of scope? Explain with the help of Formula.

Answer: Economies of scale exist when the average cost of producing output falls a the level of output increases.

Also Read:

define snob effect and bandwagon effect. + what is NETWORK EXTERNALITIES ? (marks 5)

snob effect: Situation where the demand for a product by a high incomesegment varies inversely with its demand by the lowerincome segment.

bandwagon effect: the phenomenon of a popular trend attracting even greater popularity "in periods of high merger activity there is a bandwagon effect with more and more firms seeking to engage in takeover activity"; "polls are accused