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    OL L K: Indian Institute of Technology Kharagpur

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    maimslap
    This document contains an economics exam from the Indian Institute of Technology Kharagpur from 2012. The exam contains 6 questions covering various topics in economics. Question 1 covers fixed and variable inputs, the law of diminishing marginal returns, and production functions. Question 2 covers capital budgeting methods. Question 3 involves calculating the internal rate of return and net present value of an investment project. Question 4 involves calculating profit maximization for a competitive firm. Question 5 provides a comparison of perfect competition and monopoly. Question 6 contains true/false statements and short answer questions about national income estimates in India.

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    OL L K: Indian Institute of Technology Kharagpur

    Uploaded by

    maimslap
    116 views2 pages
    This document contains an economics exam from the Indian Institute of Technology Kharagpur from 2012. The exam contains 6 questions covering various topics in economics. Question 1 covers fixed and variable inputs, the law of diminishing marginal returns, and production functions. Question 2 covers capital budgeting methods. Question 3 involves calculating the internal rate of return and net present value of an investment project. Question 4 involves calculating profit maximization for a competitive firm. Question 5 provides a comparison of perfect competition and monopoly. Question 6 contains true/false statements and short answer questions about national income estimates in India.

    Original Description:

    Economics Question Paper IITKGP

    Original Title

    Economics END SEM

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    This document contains an economics exam from the Indian Institute of Technology Kharagpur from 2012. The exam contains 6 questions covering various topics in economics. Question 1 covers fixed and variable inputs, the law of diminishing marginal returns, and production functions. Question 2 covers capital budgeting methods. Question 3 involves calculating the internal rate of return and net present value of an investment project. Question 4 involves calculating profit maximization for a competitive firm. Question 5 provides a comparison of perfect competition and monopoly. Question 6 contains true/false statements and short answer questions about national income estimates in India.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    116 views2 pages

    OL L K: Indian Institute of Technology Kharagpur

    Uploaded by

    maimslap
    This document contains an economics exam from the Indian Institute of Technology Kharagpur from 2012. The exam contains 6 questions covering various topics in economics. Question 1 covers fixed and variable inputs, the law of diminishing marginal returns, and production functions. Question 2 covers capital budgeting methods. Question 3 involves calculating the internal rate of return and net present value of an investment project. Question 4 involves calculating profit maximization for a competitive firm. Question 5 provides a comparison of perfect competition and monopoly. Question 6 contains true/false statements and short answer questions about national income estimates in India.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    ~

    Date:

    Indian Institute of Technology Kharagpur

    FN/AN

    Time: 3 hrs

    Full Marks: 50

    Subject: Economics

    Autumn End-Sem. Exam, 2012

    No of Students: 399
    Subject No: HS 20001

    1. a) What do you mean by fixed and variable inputs? Discuss the law of diminishing
    marginal returns and the basic characteristics of the three stages of production in
    short-run.
    2+4
    b) Elaborate increasing and decreasing returns to scale. What are the basic characteristics
    of Cobb-Douglas production function? Mathematically show the relationship between
    short-run marginal cost (SMC) curve and short-run average cost (SAC) curve.
    2+2+2
    c) The production function for the Sony India is Q = I OL05/(J 5Af5 , where Q is the
    number of camcorder produced per week, L is the amount of labor used per week, K is
    the capital used per week, and M is the quantity of raw materials used per week.
    '

    i) Does this production function exhibit diminishing marginal returns?


    ii) Does this production function exhibit decreasing returns to scale?
    iii) Does the average product of labor depend on the amount of the other inputs used?
    Explain.
    4

    2.

    Describe both non-discounting and discounting methods of capital budgeting with


    merits and demerits. Which method, according to you, is superior and why?
    4

    3.

    Consider a capital investment of Rs 25,000 Cr on a project, which yields annual net


    cash inflows of Rs 12,000, Rs 10,000 and Rs 8,000 respectively during its three-year
    lifespan. What is the internal rate of return (IRR) of the project? If the rate of interest is
    8%, what is the NPV of this project? Interpret the results of both the methods. If the
    rate of interest is expected to be 15%, is the project worth-taking? Justify your answer.
    5

    4.

    The market supply and demand curves for a product are given respectively by
    Qs = 3000 + 200P
    Qd = 13500- 500P
    and
    The industry supplying the product is perfectly competitive. An individual firm has
    total fixed cost of $150 per period. Its average variable cost function is
    2

    AVC = 15-2Q+ Q
    10
    Find out the profit maximizing rate of output and amount of profit for the firm?

    OR

    Suppose a monopoly firm's demand and cost functions are given as


    p = 20 -0.5Q
    C = 0.04Q3 - 1.94Q2 + 32.96Q respectively
    Page 1 of2

    Determine the maximum profit and the corresponding price and quantity for the
    monopolist.
    3
    5.

    Compare and contrast Perfect Competition with Monopoly in terms of(i) Size of firms,
    (ii) Entry conditions, (iii) Price and Quantity, (iv) Closing-down point, (v) Demand
    curves of the firms, (vi) Equilibrium situations in both short- and long-run. Draw
    appropriate diagrams and interpret the comparison algebraically wherever necessary.
    5

    6. a) Write whether each statement is true or false.

    i) The planning commission of India was established in 1951.


    ii) The difference between GOP and GNP is factor payments.
    iii) National Income in India is estimated by Central Statistical Organization.
    iv) Selective disinvestment of public sector was included first time in India in VIII 1h
    Five-year plan.
    v) Relative poverty refers to a situation where a person is below poverty line.
    vi) One of the features of a mixed economy is totalitarian planning.
    vii) The new economic policy launched in 1991 aimed at structural adjustment and
    stabilization.
    viii) GNP is the sum total of Consumption, Gross Investment, Government Spending,
    and Net Exports.
    b) Answer any two ofthe following

    4.5+4.5

    i) Describe the trend in the growth of National income m India and discuss the
    difficulties and limitations in estimating it.
    ii) Can National income estimate the growth, welfare, and sustainability factor, and
    make international comparison of the economic performances amongst the
    countries? Justify your answer.
    iii) Distinguish between the following pairs in one sentence only.
    a)

    Direct and indirect tax.

    b)

    Deficit budget and deficit financing.

    c)

    Transferred earnings and transferred payments.

    d)

    Personal income and per capita income.

    Page 2 of2

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