Question-1:Define and explain the Law of Diminishing Marginal Utility (DMU)? By keeping in view the
concepts of Marginal Utility (MU) and Total Utility (TU), complete the
following table and answer the questions given below the table.
(2 x 4 = 8 marks)
Units
Consumed of Good A
Total
Utility(TU)
Marginal
Utility(MU)
1
20
2
35
3
45
4
50
5
50
6
45
7
35
a.
What is the Marginal Utility by
consuming 3 units of good A?
b.
At what level of consumption, Marginal utility will
be Zero?
c.
At what level of consumption, Total Utility will
reaches at Maximum?
d.
At what level of consumption, Marginal utility is Negative?
Question-2:
(a): Define and explain Theory
of Marginal Productivity?
(b): A Firm in Construction Sector is producing
a Good X and selling it in the
market at P =10 Dh/unit.The wage rate is fixed atW
= 500Dh.
complete the following table
and answer to the questions given at the end of below table; (2 x 4 = 8 marks)
L
TP
MPL
VMPL
Wage Rate (W)
Marginal Profit
0
0
—
—
—
—
1
100
500
2
180
500
3
240
500
4
280
500
5
300
500
(c) How much labor (L) will be employed by this Firm?
Question-3: Total Cost Function is given below;
TC
= 100 + 5Q + 2.5Q2
(8 marks)
If the output level; Q =
10 units, find the followings;
a.
Total Cost (TC)
b.
Total Fixed Cost (TFC)
c.
Total Variable Cost (TVC)
d.
Marginal Cost (MC)
e.
Average Total Cost (ATC)
Question-4:Define Indifference Curve and what are the
main properties of Indifference Curve? By using Indifference Curve analysis
explain how the consumer attains maximum level of satisfaction?
(2 + 6 = 8 marks)
Question-5:What is difference
between Perfect Competition and Monopoly? Give main characteristics
of perfectly competitive and monopolist markets. How output and profit level is
determined in both of the markets? (4 + 4 = 8 marks)
Good
Luck!
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