Microeconomics

Define games of complete and incomplete information

Leave a Comment / MEC-101 /

Introduction Game theory is a fundamental concept in economics and social sciences that studies the strategic interactions among decision-makers, also known as players. These players make decisions based on the anticipated actions and responses of other players. A critical classification in game theory is between games of complete information and games of incomplete information. Understanding […]

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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.

Leave a Comment / MEC-101 /

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 »

Explain the concept of a Production Possibility Curve. Enumerate its assumptions. Illustrate it with the help of an example.

Leave a Comment / BCOG-171 PRINCIPLES OF MICRO ECONOMICS /

Introduction The Production Possibility Curve (PPC), also known as the Production Possibility Frontier (PPF), is a fundamental concept in microeconomics. It is a graphical representation that shows the various combinations of two goods or services that an economy can produce using all available resources efficiently. The PPC illustrates the concepts of scarcity, choice, and opportunity

Explain the concept of a Production Possibility Curve. Enumerate its assumptions. Illustrate it with the help of an example. Read More »

BCOG-171 Principles of Microeconomics – Solved Assignment Answers (All Questions)

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Introduction This post compiles all the solved questions for the BCOG-171: Principles of Microeconomics assignment. Each answer is detailed and formatted according to IGNOU standards. Click on the links below to view individual answers. Section A (10 Marks Each) Explain the concept of a Production Possibility Curve… Explain the law of demand with the help

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Define functional distribution and distinguish it from personal distribution.

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Introduction Distribution of income is a core topic in economics that examines how a nation’s total income is divided among its citizens or factors of production. It can be studied in two main ways: functional distribution and personal distribution. These approaches focus on different aspects of income flow within an economy. Definition of Functional Distribution

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What is backward bending supply curve? Explain with an example.

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Introduction The backward bending supply curve is a unique concept in labor economics that illustrates how the quantity of labor supplied may decrease beyond a certain wage level. While typically supply increases with price, the labor market can show the opposite under specific conditions due to worker preferences for leisure versus income. Understanding the Backward

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How the various tools of government intervention are applied while determining the price?

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Introduction Governments intervene in markets to regulate prices, ensure fairness, and stabilize the economy. Price determination through purely market forces can lead to inequalities or market failures. Therefore, various tools of government intervention are employed to correct such outcomes and ensure efficient and equitable allocation of resources. Key Tools of Government Intervention in Price Determination

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Write a short note on the claimed superiority of indifference curves analysis over utility analysis.

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Introduction The debate between indifference curve analysis and utility analysis revolves around how consumer preferences and choices are understood in economics. Indifference curve analysis is widely considered superior due to its realism and flexibility compared to the earlier cardinal utility theory proposed by classical economists. Utility Analysis: An Overview Utility analysis assumes that utility can

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What is full-cost pricing principle? Does it lead to a higher than optimum production?

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Introduction The full-cost pricing principle, also known as cost-plus pricing, is a method where firms set the selling price of a product by adding a specific markup to the total cost of production. It is a widely used pricing strategy in practice, especially among monopolistic and oligopolistic firms. However, this approach raises questions regarding production

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