MICRO ECONOMICS
| KARACHI UNIVERSITY BUSINESS SCHOOL UNIVERSITY OF KARACHI FINAL EXAMINATION JUNE 2011: AFFILIATED COLLEGES MICRO ECONOMICS: BA (H)–311 BS – I |
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| Date: June 14, 2011 | Max Marks: 60 Max Time: 3hrs |
| Instructions:
1. Attempt any FIVE questions. All questions carry equal marks |
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Q1.(a) Define Price elasticity of demand (Ed) and discuss its significance while Explaining Total Revenue (TR).
(b) Find Ed geometrically at points B,D, F and G for the given market demand Curve.
| Point | A | B | C | D | E | F | G |
| Price (Px) | 6 | 5 | 4 | 3 | 2 | 1 | 0 |
| Quantity (Qx) | 0 | 20,000 | 40,000 | 60,000 | 80,000 | 100,000 | 120,000 |
Q.2 (a) Briefly discuss the factors which affect the Supply curve.
(b) Suppose that the market demand in a perfectly competitive industry is Given by QD = 70,000 – 5000 P and the market supply function is given as QS = 40,000 + 2500 P, with P is in dollars.
i – Find the market equilibrium price.
ii – Find the market demand and market supply schedule at prices of $9, $8, $7, $6, $5, $4, $3, $2, $1.
Q.3 a) “Often scarcity of resource leads to choice for an individual which require Decision making” discuss the above statement in light of microeconomics
b) What is Engel curve? Describe it with the help of some schedule.
Q.4 : (a) Clearly differentiate between perfect competition and monopoly
(b) Sketch the curvilinear demand curve for given data of a monopoly firm also derive MR at each point which must prove MR < P for monopoly firm
| Points | A | B | C | D |
| Price (P) | 11 | 8 | 5 | 4 |
| Quantity (Q) | 1 | 2 | 6 | 10 |
Q.5 : If a firm is operating under perfect competition with market price of $4 , how would You optimize the firm’s profit by using marginal approach for following data set. Support your answer with graphical depiction as well.
| Q | 100 | 200 | 300 | 400 | 500 | 600 | 700 | 750 | 800 | 900 |
| TC | 1000 | 1300 | 1500 | 1600 | 1700 | 1850 | 2100 | 2265 | 2500 | 3600 |
Q.6: Write short note on any three of following:
- Expansion Path
- Fixed cost and Variable cost
- Indifference Curve
- Point and Arc Elasticity
- Market equilibrium when demand and supply both increases