MICRO ECONOMICS Subject Code: 1204 Introduction:

1. Distinguish between Micro Economics and Macro Economics. State the fundamental problems in Economics. 2. Define opportunity cost and economics of scale. 3. What is economics? 4. Explain Normal goods and Inferior goods. 5. What are the fundamental problems in Economics? How the problems can be solved? 6. Define need, want and demand. 7. Define micro economics.

Demand:
1. What is the demand curve? Discuss the factors that affect the demand curve. 2. Define the law of demand. Why demand curve is downward sloping? Describe. 3. What do you mean by movement along a demand curve? What are the factors which can shift a demand curve? 4. What are the situations in which the law of demand may not operate? 5. What is the demand function? Draw a demand curve from a demand equation. 6. What are the characteristics of demand and supply curve? 7. What are the factors determining the demand of a product?

Supply:
1. What do you mean by supply and Exceptional supply 2. What are the causes of changes in supply? 3. Supply as a function of technology- Comment on the statement. 4. What is reserve price of a supplier? State the determinants of reserve price. 5. Why does supply curve tend to be upward-slopping? 6. Explain the equilibrium condition of demand and supply. 7. Why does supply curve slope upward from left to the right? 8. Explain movement along and shift of the supply curve? 9. Define market equilibrium. 10. Explain the numeric and the geometric approach to measure the elasticity of supply.

Elasticity:
1. What do the price elasticity of demand, the income elasticity of demand and the cross price elasticity of demand measure in general? 2. Explain why the cross price elasticity of demand is positive for commodities that are substitutes but negative when commodities are complementaries. 3. What do mean by elasticity? Explain the terms E=1; E>1; E<1. 4. State perfect elasticity and zero elasticity of demand.

5. What is income elasticity of demand? How can it be derived from a demand function? Write about the concept of cross elasticity and its implications. 6. Describe five types of elasticity. 7. What are the factors that affecting elasticity of demand? 8. Distinguish between elastic demand and inelastic demand. 9. Define income demand, price demand and cross demand.

Economic theory of consumer behaviour:

1. Define utility and Marginal Utility. State the law of diminishing marginal utility. 2. How can we find consumer equilibrium point? Explain why this is the equilibrium point. 3. Define indifference curve and indifference map. 4. Two indifference curves will never cut each other- Explain the statement. 5. What do you mean by consumer surplus? State the practical importance of consumer surplus. 6. How can you demonstrate the income rise on market equilibrium model? 7. Draw a demand curve from price consumption curve (PCC) which represents optional combinations of two goods. 8. Using the indifference curve analysis show how price effect of a commodity is decomposed into income effect and substitution effect. 9. What are the basic assumptions of Marshallian utility analysis? 10. What is the concept of consumer surplus? 11. Explain the concept of consumers equilibrium with indifference curve analysis. 12. State the important features of an indifference curve. 13. What do mean by market equilibrium? 14. Explain what happens if the market price is above or below equilibrium price. 15. How is marginal utility and price of a product related? 16. Explain the attainment of consumer equilibrium using indifference curve-budget line framework. If price of a normal good decrease, what will be its impact on the consumption of that good? Show using the same framework. 17. Define marginal utility and total utility. 18. Distinguish between marginal utility and total utility. 19. Explain consumer equilibrium condition. 20. What do you mean by the budget line? Explain with the example.

Cost:
1. Define fixed cost, Variable cost and marginal cost. Explain why marginal cost curve cuts average cost curve and average variable cost curves at their minimum values. 2. Discuss equilibrium of firm by the use of total cost and total revenue curve. 3. from the following two equations you are required to determine market equilibrium price, equilibrium demand and equilibrium supply:QD=25-5P QS=7+P Demand Equation Supply Equation

4. Why with the increasing of production average cost (AC) curve tends to decrease? Explain. 5. Why do AC curve and MC curve tend to be U shaped? 6. What are the difference between marginal cost and average cost? 7. Define average cost and Marginal cost. 8. Why does fixed cost curve tend to be parallel to the ground? 9. What are the difference between short-run costs and long-run costs? How can average cost curve be derived from the total cost curve? 10. Explain why in the long run all costs are variable cost? 11. No cost is fixed in the long-run.-Explain the statement.

Production:
1. How would you define production function? What are the features of production function? 2. How you can maximize the profit in the competitive market? 3. What do you mean by marginal rate of technical substitution (MRTS)? 4. Discuss return to scale with examples. 5. What is MRS? Explain with example. 6. Explain the law of diminishing marginal returns. 7. What is iso-quant? 8. Explain the properties of iso-quant. 9. What will be the efficient production functions Bangladesh? 10. State the law of diminishing return.

Markets and Revenue:

1. Compare among monopolistic competition, oligopoly, duopoly, monopoly and monopsony market. 2. A competitive firm faces a completely horizontal demand curve. 3. A competitive firm will supply where marginal costs equal price. 4. A competitive firms shutdown point comes where prices cover just variable cost. 5. What do you understand by market imperfection? Discuss the sources of market imperfections. 6. What do you mean by short-run and long-run? Can in the long-run anyone earn super profit in the competitive market? Why? Why not? 7. Why the demand curve of a perfectly competitive firm is parallel to the horizontal axis? Discuss your rational. 8. What do you mean by market? Explain the characteristic of competitive market. 9. How does the firm reach in equilibrium position in the competitive market in the short-run? 10. What are the different forms of market? 11. Show with the help of diagram, how firm reach in equilibrium position under monopoly and monopolistic position. 12. Define duopoly market and monopsony market with example. 13. Define Average revenue product and marginal revenue product.

14. Why is a perfectly competitive firm a Price-taker? 15. What are the different types of price discrimination strategies to be used in a monopoly market? 16. Show with help of a diagram; the equilibrium situation of a monopolistic competitive firm. 17. Define perfect competitive market with two of its major characteristic. 18. Why do AR curve and MR curve fall on the same line? 19. State two important characteristic of an oligopoly market. 20. State the difference between perfect competition and monopoly. Explain the process of price an output determination under perfect competition. 21. What will happen to total revenue when price change in case of price inelastic and unit elastic demand? 22. What are difference between perfectly competitive market and the monopolistic competition? 23. What are the different features of a perfect competitive market? 24. Explain the process of price and output determination under a monopoly.

Created by NowshadCreated on 2/28/2012 4:27:00 a2/p2

21. How would you define production function? What are the features of production function?