ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(Department of Economics)
WARNING
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING
THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD
OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROM
OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN
“AIOU PLAGIARISM POLICY”
Course: Microeconomic Analysis (9305) Semester:
Autumn, 2024
Level: BS Economics
Please read the following instructions for writing your assignments. (AD, BS,
BEd, MA/MSc, MEd) (ODL Mode).
1. All questions are compulsory and carry equal marks but within a question the
marks are distributed according to its requirements.
2. Read the question carefully and then answer it according to the requirements of the
questions.
3. Avoid irrelevant discussion/information and reproducing from books, study guide
or allied material.
4. Handwritten scanned assignments are not acceptable.
5. Upload your typed (in Word or PDF format) assignments on or before the due date.
6. Your own analysis and synthesis will be appreciated.
7. Late assignments can’t be uploaded at LMS.
8. The students who attempt their assignments in Urdu/Arabic may upload a scanned
copy of their handwritten assignments (in PDF format) on University LMS. The
size of the file should not exceed 5MP.
Total Marks: 100 Pass Marks: 50
ASSIGNMENT No. 1
(Units 1-5)
Q.1 Discuss in detail the three axioms of consumer theory. On what axiom the theory of
consumer is based. (20)
Q.2 Briefly explain the input demand function and output supply function. Discuss the
properties of both functions in detail. (20)
Q.3 Differentiate between the lemon market with fixed quantity and with variable
quantity. How the problem of lemon can be eliminated? (20)
1
Q.4 Explore how the investment depends on the attitude towards the risk? Differentiate
between the risk-free investing and risk averse investing, (20)
Q.5 How a participant according to the theory of auction would made their auction
decisions in a certain and uncertain condition? Discuss the various elements of
auction and use winner’s curve to show the interest of bidder at different places.
(20)
Total Marks: 100 Pass Marks: 50
ASSIGNMENT No. 2
(Units 6-9)
Q.1 Discuss in detail the main differences between the Cournot model and Stackelberg
model. (20)
Q.2 How asymmetric information results in problem of adverse selection and moral
hazard. Why asymmetric information leads to market failure. (20)
Q.3 Explain in detail if the presence of negative externality in the production of good
create the deadweight loss in the market. (20)
Q.4 How do public good lead to free riding problems? Describe the solutions which can be
adopted to avoid the problem of free riding. (20)
Q.5 What are the major causes of externalities? Describe in detail all the measures adopted by
the government to reduce the externalities and all other measures too. (20)
