Description

MEC 101 MAEC Ignou Solved Assignment 2024

Course : MA Economics
Session 2024
Submission date : 1. By 31st October 2023, for the students willing to appear in December 2023 term end examination. 2. By 30thApril 2024, for the students willing to appear in June 2024 term end examination.

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1. a. A monopolist uses one input X, which she purchases at the fixed price p=5 in order to
produce output q. Her demand and production functions are:
P=85-3q and q= 2×1/2respectively.
Derive the equilibrium output and equilibrium profit.
b. “In real world, sometimes it is not possible to achieve optimum welfare.” Comment
and discuss the obstacles in attaining Pareto optimum.
2. Given a Cobb-Douglas utility function
U (X, Y) = X1/2 Y
1/2
Where X and y are the two goods that a consumer consumes at per unit prices of Px and
Pyrespectively. Assuming the income of the consumer to be ₹M, determine:
a. Marshallian demand function for goods X and Y.
b. Indirect utility function for such a consumer.
c. The maximum utility attained by the consumer where α =1/2, Px =₹ 2, Py= ₹ 8 and
M= ₹ 4000.
d. Derive Roy’s identity.

MEC 101 MAEC Ignou Solved Assignment 2024

SECTION B
Answer the following questions in about 400 words each. Each question carries 12marks.
5 X 12=60
3. a.) How is Cournot’s model of oligopoly different from Bertrand’s model of oligopoly?
b.) Suppose the demand for a product is given by p=d (q)=−0.8q+150 and the supply for
the same product is given by p=s(q)=5.2q
For both functions, q is the quantity and p is the price. Find out producer surplus and
consumer surplus.
4. a.) Differentiate between Cooperative and non-cooperative game theory.
b.) From the following pay-off matrix, determine:
(i) The optimal strategy for each individual.
(ii) Value of the game.
Player 1
Player 2
Strategies I II III IV V
I 9 3 1 8 0
II 6 5 4 6 7
III 2 4 3 3 8
IV 5 6 2 2 1

MEC 101 MAEC Ignou Solved Assignment 2024

5. a.) Do you agree that by paying higher than the minimum wage, employers can retain
skilled workers, increase productivity, or ensure loyalty? Comment on the statement in
the light of efficiency wage model.
b.) There are two firms 1 and 2 in an industry, each producing output Q1 and Q2
respectively and facing the industry demand given by P=50-2Q, where P is the market
price and Q represents the total industry output, that is Q= Q1 + Q2. Assume that the cost
function is C = 10 + 2q. Solve for the Cournot equilibrium in such an industry.
6. a.) Do you think that a risk-averse individual gamble or will a risk lover purchase
insurance? Explain your answer.
b) Radha has assets worth 10,000 rupees and is facing a loss of 3,600 with a probability
of 0.002. She is indifferent between paying G rupees for insurance protection and
assuming the risk of loss personally. She values total assets of amount w≥0 according to
the utility function u (w) = w1/2. Determine G.
7. Write short notes on following:
a) Different types of price discrimination
b) Bilateral monopoly
c) Economies of Scale
d) Pooling and separating equilibrium