MEC-101: MICROECONOMIC ANALYSIS
(Assignment) Course Code: MEC-001
Assignment Code: MEC-002/2020-21
Total Marks: 100
SECTION A
Answer all questions from this section. 2Ă20 = 40
1. (a) Elucidate price and output determination under Cournot and Stackelberg models of Oligopoly.
(b) Consider a market for energy drinks consisting of only one firm. The firm has a linear cost function:
C(q) = 4q, where q represents quantity produced by the firm. The market inverse demand function is
given by P(Q) = 24 â 2Q, where Q represents total industry output. Based on the given information
answer the following:
(i) What price will the firm charge? What quantity of energy drinks will the firm sell?
(ii) Now suppose a second firm enters the market. The second firm has an identical cost function. What
will be the Cournot equilibrium output for each firm?
(iii) What is the Stackelberg equilibrium output for each firm if firm 2 enters second?
(iv) How much profit will each firm make in the Cournot game? How much in Stackelberg?
(v) Which type of market do consumers prefer: monopoly, Cournot duopoly or Stackelberg duopoly?
Why?
2. (a) Consider an Edgeworth box that describes a two-person, two-commodity exchange scenario. Explain
how trade takes place between the two individuals starting from the initial endowment position. What is
the significance of the slope of the ray passing through a Pareto optimal point and the endowment point?
(b) Consider a pure-exchange economy of two individuals (A and B) and two goods (X and Y). Assume both the
individuals are endowed with 2 units of good X and 1 unit of good Y each.
Let utility functions of individual A and B be UA = min{XA,YA} and UB = min{đđ”
4,YB}, where Xi and Yi for i = {A,
B} represent individual iâs consumption of good X and Y respectively. Determine the aggregate excess demand
functions for each good.
SECTION B
Answer all questions from this section. 5Ă12 = 60
3. (a) How would you differentiate a Static game from a Dynamic game?
(b) Consider the following game.
i) Can Backward induction be applied in this game to find a solution?
(ii) What will be the Subgame Perfect Nash equilibria for the given game?
4. What is Kaldorâs compensation principle? How is it used to resolve Pareto non-comparability? How is it
different from Hick's compensation principle?
5. (a) Explain the concept of a Homothetic production function.
Given a production function
q = AL0.5
K0.4
where q represents total production, L and K stands for labour and capital respectively, and A is the technology
coefficient. What are the returns to scale for such a production function?
(b) âHomothetic production function includes Homogeneous production function as a
special case.â Justify this statement.
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Player 1
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(1, 5)
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(3, 2)
(0, 1)
Q
R
S
U
U
T
T
Pla
yer
2
6. (a) Differentiate between a Hicksian and a Walrasian demand function? Do they ever intersect? Explain.
(b) Consider a Cobb-Douglas utility function
U (X, Y) = đ1 5 đ4 5
where X and Y are the two goods that a consumer has an option to consume at per unit prices of PX and PY,
respectively. Assume income of the consumer to be Rs M. Determine
(a) Uncompensated demand functions for goods X and Y
(b) Compensated demand functions for goods X and Y
7. Raj expects his future earnings to be worth Rs 100. If there is some unfortunate event, his expected future
earnings will be Rs 25. The probability of an unfortunate event to occur is 2
3, while that of things
remaining fortunate is 1
3. Suppose his utility function is given by U(Y) = đ1 2 , where Y represents the
amount of money. Now suppose an insurance company offers to fully insure Raj against the loss of
earnings caused during an unfortunate event at an actuarially fair premium.
(i) Will Raj accept the insurance? Explain. (ii) What would be the rate of actuarially fair premium charged in this case?
(iii) What would be the maximum amount that Raj would pay for the insurance?
MEC-002: MACROECONOMIC ANALYSIS
(Assignment)
Course Code: MEC-002
Assignment Code: MEC-002/2020-21
Total Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about 500 words
each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case of numerical
questions word limits do not apply.
Section A
1. Derive the conditions for steady state growth in the Solow model. What are its implications? In what respects is the
golden rule different from the steady state?
2. What are the implications of IS and LM curves? What are the factors on which the position and the slope of IS and LM
curves depend?
Section B
3. What does the Phillips curve signify? How do you reconcile the difference in the shape of the curve in the short run and
the long run?
4. From Lucasâ point of view, what are the limitations of the Keynesian model? What improvements does he suggest?
5. Bring out the salient features of the endogenous growth theory.
6. Explain the mechanism through which internal and external balance takes place under flexible exchange rate.
7. Write short notes on the following:
a) Permanent income hypothesis
b) Rational expectations and adaptive expectations
MEC-103: QUANTITATIVE METHODS
(Assignment) Course Code: MEC-103
Asst. Code: MEC-103 / TMA/2020-21
Total Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each, those in Section B carry 12 marks
each.
Section A
1) Consider the utility function đą = đ(đ„1 ⊠đ„đ) where đ„đ , đ = 1,2,⊠, đ are the quantities of the n goods consumed. Let
the price of good đ„đ be đđ , đ = 1,2,⊠, đ. Let M be the consumer's income. Show that the Lagrangian multiplier of the
utility maximization problem equals the marginal utility of income.
2) (a) What is the normal probability distribution function? State its properties.
(b) The concentration of impurities in a semiconductor used in the production of microprocessors for computer is a
normally distributed random variable with mean 127 parts per million and standard deviation 22. A semiconductor is
acceptable only if its concentration of impurities is below 150 parts per million. What proportions of the
semiconductors are acceptable for use? (The area under the standard normal curve for the value of z = 1.5 is
0.668).
Section B
3) Distinguish between the characteristics of first and second order difference equations. Give examples of economic
problems that are solved with the help of each category of such equations.
4) Solve the following linear programming problem:
Min đ¶ = 0.6đ„1 + đ„2
subject to 10đ„1 + 4đ„2 â„ 20
5đ„1 + 5đ„2 â„ 20
2đ„1 + 6đ„2 â„ 12
đ„1 đđđ đ„2
â„ 0
5) Suppose a large jar contains eight red balls, six yellow balls, and six blue balls. Two balls are to be selected at random
from the jar, and the first ball selected will not be placed back into the jar.
(a) What is the probability that the first ball will be red and the second yellow?
(b) What is the probability that neither will be red?
6) Suppose the technology matrix is
A = 0.2 0.3 0.20.4 0.1 0.20.1 0.3 0.2
Let the final demand vector be D = 1056
Find the level of production of the three goods.
7) (a) What is a test statistic?
(b) Distinguish between one-tailed and two-tailed tests.
(c) What is p- value?
MEC-004: ECONOMICS OF GROWTH AND DEVELOPMENT
Assignment
Course Code: MEC-004
Asst. Code: MEC-004 / AST-1/2020-2021
Total Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about 500 words
each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case of numerical
questions word limits do not apply.
SECTION A
1) Examine the effect of population growth in the Solow model of economic growth. Discuss how the Solow model could be
used to explain poverty traps in developing nations.
2) Describe the Mankiw-Romer-Weil extension to the neoclassical model to include human capital. Explain why
diminishing returns to capital do not take place in the AK model.
SECTION B
3) Distinguish between economic growth and development. Briefly mention the main benefits that economic growth confers
upon society.
4) Describe Pasinetti's theory of economic growth and distribution.
5) Describe the various approaches to the measurement of total factor productivity.
6) What are the main propositions of the Real Business Cycle model? Describe the basic structure of a prototype Real
Business Cycle model.
7) Compare and contrast the Uzawa two-sector growth model with the Feldman model.
MEC-005/105: INDIAN ECONOMIC POLICY
Assignment (TMA)
Course Code: MEC-005/105
Assignment Code: MEC-105/AST/2020-21
Maximum Marks: 100
NOTE:
1. All questions are compulsory.
2. Questions in Section A carry 20 marks each and are to be answered in about 700 words each.
3. Questions in Section B carry 12 marks each and are to be answered in about 400 words each.
Section-A
1. Do you think that Indian economy is on the path of transition - transition from under development to
development, from poverty to prosperity and from scarcity to abundance? Explain with reasons. Evaluate the effects
of economic growth on the distribution of national income.
2. âThe quality of life in India is far from satisfactoryâ. Comment.
Section B
3. Analyze the rate and pattern of industrial growth during last two decades. What suggestions would you like to
make for achieving high industrial growth?
4. Identify the constituents of second generation of economic reforms. To what extent the second generation of
reforms will tackle the contemporary challenges of Indianâs development.
5. âStates should have their due share in responsibilities as well as rightsâ. In the light of this statement, bring out
the important issues in Center-State relations in India.
6. Give an account of Indiaâs balance of payment situation during last two decades. Discuss the policy implications
of emerging situation of Balance of Payment.
7. What do you mean by the food security? Evaluate the various measures adopted by the Government of India
towards food security.
MEC-006: PUBLIC ECONOMICS
Assignment (TMA)
Course Code: MEC-006
Assignment Code: MEC-006/AST/2020-21
Maximum Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about
500 words each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case
of numerical questions word limits do not apply.
Section A
1) What is the basic idea behind the âPure Theory of Public Expenditureâ: Discuss briefly. Also, what is the
theoretical rationale behind Lindahl Pricing?
2) State the ideal conditions for meeting the âsocially optimum criteriaâ for utility pricing. Also,
critically discuss the utility pricing rules for âbest solutionsâ.
Section B
3) Using different tax rates demonstrate how the deadweight loss could be minimised?
4) On what ground did the classical economists oppose public debt? What counterview is proposed
by the modern economists in their view on public debt?
5) What is a Social Welfare Function? Explain this concept with the help of the Samuelson-
Bengsonâs Social Welfare Indifference Curves.
6) Discuss the Bowen and Blackâs models for the identification of âMedian Voter Preferenceâ.
7) State the main problems in international policy coordination. Suggest methods on how they can
be solved?
MEC-106: PUBLIC ECONOMICS
Assignment (TMA)
Course Code: MEC-106
Assignment Code: MEC-006/AST/2020-21
Maximum Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about
500 words each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case
of numerical questions word limits do not apply.
Section A
1) Discuss the welfare concepts, inbred in the different forms of social welfare functions, which
form the foundation of policies in public economics.
2) Elucidate the two theoretical models attributed to Lindahl and Samuelson in the context of public
goods.
Section B
3) Outline how internalisation of negative externalities could be a solution to externalities through
the instruments of taxation and property rights.
4) State Arrowâs impossibility theorem with conditions. Also, illustrate the element of
impossibility in Arrowâs theorem.
5) Highlight the argument behind the ârevenue maximisationâ approach to public expenditure.
6) Establish how under conditions of âimperfect competitionâ government enhances overall social
welfare.
7) Delineate the âalternative strategiesâ available to ensure the required money supply in an
economy.
MEC-007: INTERNATIONAL TRADE AND FINANCE
Assignment
Course Code: MEC-007
Asst. Code: MEC-007 / AST-1/2020-2021
Total Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about
500 words each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case
of numerical questions word limits do not apply.
SECTION A
1) Critically discuss the Ricardian theory of Comparative Advantage. How is it different from Adam Smithâs
theory of Absolute Advantage?
2) Explain the various concepts of terms of trade. Critically examine the behavior of terms of trade as explained by
Prebisch
SECTION B
3) Explain multilateral framework of international trade. Explain its main features.
4) What are the various forms of economic integration? How is trade diversion different from trade creation?
Elucidate.
5) Describe the evolution of international monetary system. Examine the trends in the international
monetary and financial systems.
6) Discuss the various instruments of trade protection. Differentiate between quotas and tariffs.
7) Critically examine the relative merits and demerits of the fixed and flexible exchange rates.
MEC-008: ECONOMICS OF SOCIAL SECTOR
AND ENVIRONMENT
Assignment (TMA)
Course Code: MEC-008
Assignment Code: MEC-008/AST/2020-21
Maximum Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about
500 words each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case
of numerical questions word limits do not apply.
Section A
1) How does taking the âincome levelsâ as an indicator of development defeats the objective of tackling the
multi-faceted dimensions of development? Explain.
2) Discuss the Gordonâs contention that the âoptimal size of fishery is one which maximizes sustainable
resource rentâ with appropriate theoretical justification.
Section B
3) Explain the transition to âinstitutional economicsâ from âneoclassical economicsâ.
4) What are the essential differences in the two approaches of âshadow pricesâ and âhedonic pricingâ
methods as âvaluation tools of environmental functionsâ.
5) Write a note on the different types of âcommon property resourceâ.
6) Bring out the inter-regional variations in âexpenditure on educationâ in India as it obtained in the
early years of 2000s.
7) Make a case in favour of levying the âuser feesâ for public health facilities. What are the
arguments that can be offered âfor and againstâ such a proposal?
MEC-108: ECONOMICS OF SOCIAL SECTOR
AND ENVIRONMENT
Assignment (TMA)
Course Code: MEC-108
Assignment Code: MEC-108/AST/2020-21
Maximum Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about
500 words each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case
of numerical questions word limits do not apply.
Section A
1) Discuss the various situations of âmarket failureâ leading to environmental degradation.
2) Discuss the significance of âefficiency wageâ in contributing to health and productivity of workers.
Section B
3) Explain how âpovertyâ is not the sole determinant of malnutrition.
4) Specify the fundamental challenges of using the non-renewable resources optimally.
5) Derive the results for the optimal use of renewable resources under the discrete and continuous
time frames.
6) Describe the concept of âquasi marketsâ in the provisioning of public services.
7) Derive the conditions of optimality for buying health insurance in cases of absence/presence of
free riders.
MEC-109: RESEARCH METHODS IN ECONOMICS
Assignment (TMA)
Course Code: MEC-109
Assignment Code: MEC-109/AST/2020-21
Maximum Marks: 100
NOTE:
1. All questions are compulsory.
2. Questions in Section A carry 20 marks each and are to be answered in about 700 words each.
3. Questions in Section B carry 12 marks each and are to be answered in about 400 words each
Section-A
1. What are the key features of interpretative philosophy of science? Using a suitable
example from economics, select a theme and write a proposal in about 500 words using
interpretative research methodology.
2. Distinguish between tools of data collection and methods of data collection. Discuss
the various methods of Random Sampling. How will you decide the suitable method of
data collection among various random sampling methods?
Section-B 3. State the different functional forms of regression model. How do you interpret the
estimated slope coefficient ÎČ of a log linear regression model?
4. State the properties of Lorenz Curve. When will comparison between two Lorenz
curves fail to compare inequality in two distributions?
5. What is correspondence analysis? Explain with example the various steps involved in
correspondence analysis.
6. What is participatory research? Identify the various steps involved in data analysis of
participatory research.
7. Name the different sources that provide data on employment. Explain the different
measures of employment and unemployment used by NSSO in different quinquennial
surveys.
MECE-001: ECONOMETRIC METHODS (Assignment)
Course Code: MECE-001
Asst. Code: MECE-001/AST/2020-21
Maximum Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each, those in Section B carry
12 marks each.
Section A
1. What do you understand by autocorrelation? What are the consequences of autocorrelation? How
do you detect autocorrelation in a data set? Explain the steps you would follow to remove the
problem of autocorrelation.
2. Consider the regression equation where is a stochastic error term.
(a) Explain the need of including the in the model
(b) What assumptions regarding the error term are needed to prove the Gauss-Markov theorem?
(c) Prove the Gauss âMarkov theorem for the estimator of
Section B
3. What is meant by heteroscedasticity? Explain one of the remedial measures for the problem of
heteroscedasticity.
4. What is meant by dynamic model? Explain how the following model can be estimated?
where + . In the above model is distributed independent, normal with mean
zero and variance and
5. What is meant by indirect least squares (ILS) method? Explain how the following model can be
estimated using this method?
Demand function:
Supply function:
where Q = quantity, P = Price, and = income.
6. Explain the steps followed in estimation of parameters through the method of Generalised least squares
(GLS).
7. Explain the concept of multicollinearity. What are its consequences on estimates? What remedial measures
would you suggest for problem of multicollinearity?
MECE-003: Actuarial Economics: Theory and Practice
Assignment (TMA)
Course Code: MECE-003
Assignment Code: MECE-003/AST/2020-21
Maximum Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about
500 words each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case
of numerical questions word limits do not apply.
Section A
1) (a) Why is it necessary to model interest stochastically? How is a model of âstochastic interestâ
developed? (b) Differentiate between the features of âclassical and Bayesian analysis of
credibility theoryâ.
2) You are required to demonstrate the interplay between âfinance and insurance principlesâ. How
would you approach this problem with the help of âunit-linked insurance contractsâ?
Section B
3) State Markovâs theorem with illustrations. What is the condition required to be met by a random
variable R in order to possess the Markov property?
4) How is a âsurvival functionâ defined? In what way is a âhazard functionâ different from the
âsurvival functionâ?
5) How is Lundberg Risk Model formulated? Suggest modifications therein so as to offer an
alternative to it.
6) State the Optional Stopping Theorem. What technique could be used to analyse the âcollective
riskâ?
7) Write short notes on: (a) Compound-Poisson Process; (b) Black-Scholes Theorem; (c) Panjer
Recursion; and (d) Risk neutral evaluation.
MECE-004: FINANCIAL INSTITUTIONS AND MARKETS
Assignment
Course Code: MECE-004
Asst. Code: MECE-004 / AST-1/2020-2021
Total Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each, those in Section B carry 12
marks each.
SECTION A
1) Describe the nature of the financial system in a modern economy giving the important types of constituent
institutions, markets and instruments. Explain the concept of flow-of-funds in the financial markets
2) Discuss the Markowitz theory of efficient portfolio selection. How does the Capital Asset Pricing Theory
(CAPM) theory build on it?
.
SECTION B
3) Explain the Arbitrage Pricing Theory.
4) Explain the need for, and role of depository systems in secondary markets. Explain the concept of custodial
services.
5) Give a theoretical model of central banking, bringing out the relationship between the monetary base and
monetary aggregates. What are instruments of monetary policy used by central banks?
6) Compare the impact of monetary policy under fixed exchange rates with those under flexible exchange rates.
7) Discuss the concept of leverage for a firm. Discuss the important financial and leverage ratios used. Explain the
Merton-Miller theorem.