Economics 2078

Section A

Long Answer Questions
Attempt any TWO questions. [2 × 10 = 20]

1. What is an indifference curve? Explain the consumer's equilibrium under the ordinal utility approach. [10]

2. Define national income. Explain the difficulties of measuring national income in developing countries like Nepal. [10]

3. List the features of a monopoly. Explain the short-run and long-run equilibrium of a firm under a monopolistic market. [10]

Section B

Short Answer Questions
Attempt any EIGHT questions. [8 × 5 = 40]

4. 'Scarcity and choice are central issues of economics.' Justify the statement. [5]

5. Describe the major determinants of demand. [5]

6. Given the price demand schedule below:

7. Explain the law of returns to scale. [5]

8. What is the marginal rate of substitution (MRS)? Write the reasons for diminishing MRS. [5]

9. Calculate TC, AFC, AVC, AC, and MC under the total fixed cost of 100, from the following cost schedule:

10. Explain the uses of quantitative instruments under the expansionary monetary policy. [5]

11. Let the demand and cost functions be P = 12 - 0.4Q and C = 5 + 4Q + 0.6Q², respectively. Then find the equilibrium price, quantity, total revenue, total cost, and total profit. [5]

12. Find the GDPMP, GNPM, and NNP from the following information: