Group B

2. Explain the concepts of microeconomics and macroeconomics.

3. Define the income effect (IE) and derive the income-consumption curve (ICC) for normal goods and under the ordinal utility (indifference curve) analysis.

4. With the help of the following information on output (Q in units), short-run total fixed cost (TFC), and short-run total variable cost (TVC), compute short-run (i) total cost (TC), (ii) average fixed cost (AFC), (iii) average variable cost (AVC), (iv) average cost (AC), and (v) marginal cost (MC): Quantity (Q): 1, 2, 3, 4, 5, 6. TFC (Rs.): 120, 120, 120, 120, 120, 120. TVC (Rs.): 60, 80, 90, 110, 150, 240.

5. If the quantity supplied of a commodity (i.e., ) rises from 5,000 units to 10,000 units as its price () also rises from Rs. 300 per unit to Rs. 600 per unit, then (i) compute the price elasticity of supply () and (ii) also interpret this result.

6. Define average revenue (AR) and marginal revenue (MR). Use figures and explain the relationship between AR and MR curves under the monopoly market.

7. Give the meaning of trade deficit. Also briefly explain the reasons for Nepal's trade deficit and the methods to reduce the deficit.

8. Derive the long-run marginal cost (LMC) curve and explain its derivation process.

Group C

9. From the table given below, (i) compute the income elasticity of demand () for a commodity for the movement from points (a) to (b), (b) to (c), (c) to (d), (d) to (e), and (e) to (f); and (ii) also state the natures of this commodity based on the values and signs taken by this at different levels of income.

10. From the data in the following table, use Expenditure Method and compute these four concepts of national income: (a) gross domestic product at market price (), (b) gross national product at market price (), and (c) net national product at market price (), and (d) net national product at factor cost ().

11. Using the total-revenue-and-total-cost (TR-TC) method, explain how a firm in the market of perfect competition reaches a short-run equilibrium.

Tribhuvan University Applied Economics Internal Examination

Tribhuvan University Applied Economics Internal Examination