BECC 105 Intermediate Micro Economics -I Question Paper June 2025 in English

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B. A. (HONOURS) ECONOMICS (BAECH)
Term-End Examination June, 2025
BECC–105 : INTERMEDIATE MICRO ECONOMICS–I

Time : 3 Hours Maximum Marks : 100
Note : Attempt questions from each Section as per instructions given.

Section—A

1. Analyze the shape of the utility function for three consumers–one risk-neutral, the second
risk-averse and the third risk-taking. Who among them would like to buy an insurance
cover and why

2. Sara consumes two goods X and Y and her utility function is as follows :
U(X, Y) = X^0.25 . Y^0.75

3. (a) Find the marginal rate of substitution for the above utility function. 5
(b) Suppose the prices of X and Y are respectively 5 and 3 per unit. Sara’s income is ` 400. Use Lagrangian to find her equilibrium consumption bundle.
(c) Explain the Slutsky’s substitution effect.

BECC 105 Intermediate Micro Economics -I Question Paper June 2025 in English

Section—B

4. Explain Von-Neumann-Morgenstern utility function. Mention its salient features and
assumptions. Consider an individual who invests in different schemes and faces an
uncertain income flow of 6,000 or 9,500 or 15,000 with their respective probabilities of
25%, 35% and 40%. Determine the expected monetary value of the investment schemes

5. Consider the following production function :
Q = 40L+150L²-2L³
where, L is labour and Q is the output.
(a) Find the average and the marginal products of labour

(b) Find the quantity of labour when the average product is maximum.
(c) Show that when the average product is maximum, the average product and the
marginal product are equal.
(d) Find the quantity of labour when its marginal product is zero.

6. Define economic profit of a competitive firm.

7. Describe the long equilibrium of a perfectly competitive firm with diagram

8. Find the optimal consumption bundle for quantity tax and equivalent income tax using
indifference curve analysis

Section—C

9. Explain any two of the following :
(i) Quasi-linear preferences
(ii) Isoprofit lines
(iii) Conditional input demand function
(iv) First fundamental theorem of welfare analysis

10. Distinguish between any two of the following :
(i) Returns to scale and law of variable proportions
(ii) Efficient and equitable distribution
(iii) Cardinal and ordinal analysis
(iv) Quantity tax and the lump-sum tax.

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