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Reg. No. : .................................... Name : .........................................

First Year B.A. Degree Examination, March 2009 Part – III : Group – III : ECONOMICS Paper – I : Economics Theory – I (Old Scheme – Prior to 2005 Admn.) Time : 3 Hours

Max. Marks : 100

Instruction : Answer may be written either in English or in Malayalam. I. Choose the correct answer, write only the alphabet. 1) Find out the economist ‘Who is not a micro theorist’. a) Stigler

b) Bain

c) Williamson

d) Tobin

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2) The Giffen Paradox can be explained by a) Income Effect only b) The substitution effect only

c) Assuming constant marginal utility of income d) Both substitute and income effects 3) The market period is a a) Short period

b) Long period

c) Very short period

d) Very long period

4) The perfect competition firms are a) Price searchers

b) Price makers

c) Price discrimination

d) Price takers

5) The modern theory of rent has been developed by a) J.M. Keynes b) Alfred Marshall c) Joan Robinson

d) D.H. Robertson

(5×1=5 Marks) P.T.O.


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II. State whether true or false : 6) Schumpeter introduced the innovations theory. 7) The cross elasticity of demand between two perfect substitutes is zero. 8) Average cost curve is ‘U’ shaped. 9) When population is optimum, per capita income is maximum. 10) There is product differentiation in oligopoly.

(5×1=5 Marks)

III. Fill in the blanks : 11) Cob-Web theorem assumes that supply is a function of ___________ a) Current year’s price b) Previous year’s price 12) Exploitation of labour takes place in __________ factor markets. a) Imperfect b) Perfect

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13) Land is __________ in supply. a) Fixed b) Capital 14) Total Revenue = Total number of Units sold × ____________________ a) Price b) Quantity 15) Variable cost are also called as ___________ cost. a) Prime cost b) Selling cost

(5×1=5 Marks)

IV. Define any four of the following : 16) Indifference map 17) Production function 18) Price leadership 19) Market 20) Normal Profit

(4×1=4 Marks)


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V. Answer any seven of the following in not more than half a page each : 21) Distinguish between wealth and welfare. 22) Law of diminishing marginal utility. 23) Giffen goods. 24) Relationship between average cost and marginal cost. 25) Features of monopolistic competition. 26) Differential Rent. 27) Least-cost combination. 28) Marginal conditions of Pareto optimum. 29) Price elasticity of demand.

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30) Box-diagram.

(7Ă—3=21 Marks)

VI. Answer any six, each in not more than one page. 31) Explain short and long run prices. 32) The relationship between price and demand. 33) The demand curve of a product facing a perfectly competitive firm. 34) Production function with one variable input. 35) The Cob-Web theorem. 36) Determinants of prices under various firms. 37) Interpersonal comparisons of utility. 38) Marginal productivity theory of distribution. 39) Pareto criteria. 40) Problems in measuring welfare.

(6Ă—5=30 Marks)


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VII. Write essays on any three of the following, not exceeding three pages each : 41) Summarize Arrow’s impossibility theorem. 42) Explain the indifference approach to consumer equilibrium. 43) Critically examine the loanable funds theory. 44) Explain the Kinked demand curve. 45) Critically examine the elasticity of demand and measurement of elasticities. 46) Explain the theory of interest and profit.

(3×10=30 Marks)

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Paper – I Economics Theory – I (Old Scheme – Prior to 2005 Admn.)