Institute of Business Management

Semester: 2017

Course Instructor: Irfan Lal Total Marks:100 Weighted 5

Q1# Explain Utility, Marginal Utility, Law of diminishing marginal Utility,

law of eui-marginal utility?

Q#2 Show the relationship between total utility and marginal utility with the help of graph?

Q#3.What is consumer surplus and how is it measured?Why does a tax reduce consumer surplus?

Q#4.What do you understand by compensated or uncompensated demand curve?

Q #5. (a):Prove that Price Effect is equal to the Income Effect plus Substitution Effect.

(b):Prove that Consumer maximize his utility where MRS is equal to MRT.

Q#6.Define production, factorS of production, the marginal product of labor and

marginal product of capital?

Q#7When a small flrm expands the scale of its operation, why does it usually flrst experience

increasing returns to scale? When the same flrm grows to be extremely large,why might a further exPansion of the scale of operation generate decreasing returns toscale??

Q#8Explain the concept of Explicit cost, Implicit cost, sunk cost and opportunity cost?

Find out TVC, AVC, MC, and AC with the help of below total cost function

TC= 200+20Q+10Q3 +5Q2 Total fixed cost is 200. Q=10

Q#9Discuss the short run Costs with the help of the schedule and diagrams, Why does

MC curve intersect AC at its minimum point and why does AC curve U-shaped?

Q#10State and explain the Law of variable proportion or three stages of production

With the help of schedule and diagram?

Q#11 Differentiate indifference curve and Iso-quant curve and explain properties of

Indifference curve?

Q# 12 Explain return to scales with the help of diagram and functions?

Q#13 Suppose a chair manufacturer is producing in the the production Process increases from 1 to 7, the

short run when equipment is fixed. The manufacturer knows that as the number of laborers used in number of chairs produced changes as follows: 10,17,22,25,26, 2523.

a Calculate the marginal and average product of labor for this production function.

b. Does this production function exhibit diminishing returns to labor? Explain.

c. Explain intuitively what might cause the marginal product of labor to become negative.