Chapter 1 ning of the term “scarcity” ie mean should/should not be consider lease red to be scarce and why? 2. Which one of the following a. Shoes. b. Sunshine on a winter day Chapter 2 sxternality 1. Explain the characteristics of positive jain how it meets the characteristics. 2 Cite an example of positive externality and exp 3. Explain the characteristics of public goods. 44. Does any of the following goods fall in the category of public goods? (give justification for your answer) a. Weather forecast by Bangladesh Metrological Depariment b. Jute goods produced by Bangladesh Jute Mills Corporation c. Rural roads d. Sugar produced by governme What are the three questions every economy answers these questions?How would you interpret a rightward shifi of the demand curve in economic terms and e such a shifi. explain the factors which are likely to ca Briefly explain the following: Impact of an increase in the prices of inputs on the supply curve of a product b, Relationship between an individual's demand curve and market demand What does a microeconomic supply curve show? Graphically demonstrate and explain the difference between movement along a supply curve and its shift For each of the following explain whether the quantity demanded changes because of a demand shift or price change and draw the relevant figure to illustrate the answer: a. The government of Bangladesh decides to decrease military spending leading to reduced quantity demanded. b. The Government raises the price of petroleum leading to a fall in the purchase of petroleum Suppose that the market for shirts is characterized by the following demand/ supply situation: Quantity supplied 40Chapter 4 1. Define price elasticity of demand. Suppose that the price elasticit of demand, Ep, of a product is 1 (one) and you are given the following information: Initial price, Po= Tk. 10 per unit Initial quantity, Qo =15 units Ifprice changes to P)= Tk. 12 per unit, what would be the quantity, Qi, corresponding to Pi for Ep to be 1. Show details of your calculation. 2. Explain the link between price elasticity of demand and total revenue. 3. Explain the determinants of price elasticity of demand. 4. Explain what happens to total revenue as the result of a fall in price when the demand for a commodity is: a. Elastic b. Inelastic 5. You are the sales manager of an enterprise. The Managing Director asks you to increase sales revenue by increasing or decreasing price. What factor you would have to consider in deciding the direction of pri In 2008 there was a aio in Bangladesh and yet the growers complained of analysis. . What would in the context of ly what happens to6. Explain in words and give the algebraic formulation of “equi-marginal principle” in the context of consumer demand. Explain how the application of this principle gives rise to downward sloping demand curve. Suppose that the price a good increases, graphically demonstrate what would happen to the demand for another good which is a complement Based on your knowledge of the effects of shifts in demand and supply © ves on equilibrium quantity and price, explain and graphically demonstrate the following cases: a. Both price and quantity increase b, Both price and quantity decrease ©. Quantity goes up, but the price remain unchanged If an increase in the price of good A leads to an increase in the quantity demanded of good B, is good B a complement or substitute of good B? Graphically show its implications for the demand curves of good A and good B. Why is it wrong to say that a consumer having fixed income and facing given market prices of goods maximizes utility when the marginal utilities of all goods are exactly equal? Correct the statement and explain, A consumer with a fixed amount of 10 spend on two goods faces the following situation:1 (b) How would you change your choice if th all other inputs remain the s Chapter 6 Suppose that a farmer who produces Boro ri ses land, labor, seed and irrigation water only as inputs. Under what ci mstances would you consider the farmer's production characterized by a. Diminishing returns b. Decrea ng return to scale ¢. Constant returns to scale Chapter 7 Explain the least cost rule for af s use of inputs. What does U-shaped Average cost curve show? Explain the reasons which give rise to this shape in the short run as well as in the long run. >u are the manager of a firm, You have hired a consultant to advise you on the least cost combination of inputs. The consultant advises you to equalize the marginal product of each input. Will you accept or reject the advice? Give justification for your answer, Explain why in the short run a firm’s marginal cost initially falls and then rises. (a) Explain on what basis you would choose inputs to produce a given level of output at least cost assuming that the prices of inputs a nput falls while the prices of Graphically show the shape and that of @ firm under differences between them. | Explain the relationship 6 cost ofa firm under perfect competition significance of the. What does the supply curve of a firm under perfect competition show? Graphically explain and derive the supply curve of such a firm Explain why each of the following statements about profit-maximizing competitive firm is not correct: a. A competitive firm always produces output at the point where price equals average variable cost mn A firm’s supply curye depends only on its marginal cost; any other cost concept is r irrelevant. ¢. A firm’s shutdown condition is that price is less than minimum avera 6, Explain the difference between a profit maximizing monopoly firm and a firm under perfect competition in terms of ( also refer to chapter 9 and lecture notes) a. Level of output b. Equality of price and marginal cost c. Excess or supemomal profit Chapter 9 . Explain the following: . Natural monopoly st and write the relevant correctwhat is the difference between a firm under a perfect competition and a firm unde P imperfect competition in terms of demand curve facing the firm? Explain the sources that i, the factors which give rise to imperfect competition. Chapter 10 |. Explain the similarities and differences between perfect competition and monopolistic competition 2. What are the characteristics of monopolistic competition? Graphically demonstrate and explain the equilibrium of a firm under monopolistic competition after entry. Chapter 21 1. (a) What do you understand by the concept of product or aggregate expenditure approach to the estimation of gross domestic product (GDP)? Specify the elements included in this approach. (b) If you estimate GDP according ill you include/exclude the following elements in your i slusion/exelusion): y th mployed school teachers. e |, namely, edible oil, sugar and rice. Taking 2010 as the nsumer Price Index is 10% in 2011. You are given the followin aspe followings a, Baring ot costs based measure of gross domestic product (GDP), Speci th various items included in this measure. b, Difference between Gross Domectic Product (GDP) and Gross National P (GNP) roduct Consumer price inflation, Show its computation with an arithmetic example Handouts Some analysts argue that Bangladesh should stop taking foreign aid. Do you agree with this view (explain your answer)? What measures should be taken to enhance the ctiveness of aid received by Bangladesh. Algebraically derive the equation for Aggregate Demand which also incorporates marginal propensity to consume and tax rate, Explain how fiscal policy can influence the level of Aggregate Demand, Explain the key features of Bangladesh Government’s expenditure policy with suggestions for improvements. Define and graphically show aggregate te supply curves. What does ‘an increase in autonomous ‘Suppose that you are would like to introduce in the EE tion