MEC

MA ECONOMICS

Define the term ‘Shepard’s lemma’. Assume that the production function of a producer is given by Q=5L0.5 K0.3, where Q,L and K denote output, labour and capital respectively. If labour cost ₹ 1 per unit and capital ₹2, find the least cost combination of inputs (L&K)

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Introduction In microeconomics, cost minimization is an essential concept where a firm aims to produce a given level of output at the lowest possible cost. Shepard’s Lemma is a theoretical tool that helps in deriving input demand functions from the cost function. In this answer, we will define Shepard’s Lemma and apply it to the […]

Define the term ‘Shepard’s lemma’. Assume that the production function of a producer is given by Q=5L0.5 K0.3, where Q,L and K denote output, labour and capital respectively. If labour cost ₹ 1 per unit and capital ₹2, find the least cost combination of inputs (L&K) Read More »

The production function of a small factory that produces and sells toys is: Q = 5√(L.K). Suppose 9 labour hours and 9 machine hours are used every day, what is the maximum number of toys that can be produced in a day? Calculate the marginal product of labour when 9 labour hours are used each day together with 9 machine hours. Suppose the firm doubles both the amount of labour and machine hours used per day. Calculate the increase in output. Comment on the returns to scale in the operation.

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Introduction In economics, a production function is a mathematical relationship that shows how inputs like labour and capital are used to produce output. The given production function helps us understand how a factory that manufactures toys can utilize its resources efficiently to maximize output. This question includes both numerical computation and a discussion on the

The production function of a small factory that produces and sells toys is: Q = 5√(L.K). Suppose 9 labour hours and 9 machine hours are used every day, what is the maximum number of toys that can be produced in a day? Calculate the marginal product of labour when 9 labour hours are used each day together with 9 machine hours. Suppose the firm doubles both the amount of labour and machine hours used per day. Calculate the increase in output. Comment on the returns to scale in the operation. Read More »

“The pattern of structural change in the Indian economy has deviated from the development pattern of Western and South Asian economies.” Examine this statement.

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ANSWER: The statement asserting that the pattern of structural change in the Indian economy has deviated from the development pattern of Western and South Asian economies holds true when we closely analyze the trajectory of economic transformation in India. This examination involves comparing the structural changes in India’s economy with those in Western and South

“The pattern of structural change in the Indian economy has deviated from the development pattern of Western and South Asian economies.” Examine this statement. Read More »

“The question of Centre-State relations has become the focal point of discussion for a number of reasons”- Comment on this statement and point out the reasons for conflict between Centre and State.

Leave a Comment / MEC, MEC-105/205 /

ANSWER: The dynamics of Centre-State relations have indeed become a focal point of discussion in the context of Indian economic policy. This statement holds true due to several reasons that have shaped these relations and, at times, resulted in conflicts between the two entities. To understand this phenomenon comprehensively, we need to examine the historical,

“The question of Centre-State relations has become the focal point of discussion for a number of reasons”- Comment on this statement and point out the reasons for conflict between Centre and State. Read More »

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