MEC-101 English Medium Solved Assignments 2024-25

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MEC-101 English Medium Solved Assignments 2024-25 Available

1. a. The production function of a small factory that produces and sells toys is:
𝑄 = 5. √𝐿.𝐾
Where Q is the number of toys produced each day, L is the labour hours and k is the machine hours. Suppose 9 labour hours and 9 machine hours are used every day, what is the maximum number of toys that can be produced in a day? Calculate the marginal product
of labour when 9 labour hours are used each day together with 9 machine hours.Suppose the firm doubles both the amount of labour and machine hours used per day.

Calculate the increase in output. Comment on the returns to scale in the operation.
b. Define the term ‘Shepard’s lemma’. Assume that the production function of a producer
is given by Q=5L0.5 K
0.3, where Q,L and K denote output, labour and capital respectively.
If labour cost ₹ 1 per unit and capital ₹2, find the least cost combination of inputs (L&K)
2. Consider a Cobb-Douglas utility function
U (X, Y) = Xα Y (1- α)
,
Where X and y are the two goods that a consumer consumes at per unit prices of Px and
Py respectively. Assuming the income of the consumer to be ₹M, determine:
a. Marshallian demand function for goods X and Y.
b. Indirect utility function for such a consumer.
c. The maximum utility attained by the consumer where α =1/2, Px =₹ 2, Py = ₹ 8 and
M= ₹ 4000.
d. Derive Roy’s identity.

PART II
Answer the following questions in about 400 words each. Each question carries 12marks.
5 X 12=60
3. a.) What do you mean by market failure? What are its causes?
b) What are the two principles of justice as mentioned by the philosopher Rawls?
4. a.) Define games of complete and incomplete information
b.) From the following pay-off matrix, where the payoffs (the negative values) are the years
of possible imprisonment for individuals A and B, determine:
(i) The optimal strategy for each individual.
(ii) Do individuals A and B face a prisoner’s dilemma?
Individual B
Individual A
Confess Don’t Confess
Confess (-5, -5) (-1, -10)
Don’t Confess (-10, -1) (-2, -2)
5. a) What are the conditions of Pareto optimality?
b) Suppose an investor is concerned about a business choice in which there are three
prospects. The probability and returns are given below:
Probability Returns
0.4 100
0.3 30
0.3 -30
What is the expected value of the uncertain investment? What is the variance?
6. a.) Do you agree that by paying higher than the minimum wage, employers can retain
skilled workers, increase productivity, or ensure loyalty? Comment on the statement in
the light of efficiency wage model.
b.) There are two firms 1 and 2 in an industry, each producing output Q1 and Q2 respectively
and facing the industry demand given by P=50-2Q, where P is the market price and Q
represents the total industry output, that is Q= Q1 + Q2. Assume that the cost function is C
= 10 + 2q. Solve for the Cournot equilibrium in such an industry.

7. Write short notes on following:

(a) vNM expected utility theory
(b) Slutsky’s theorem
(c) Arrow prat measure of risk averseness
(d) Bergson-Samuelson Social welfare function