MEC-101 English Medium Solved Assignments 2025-26

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MEC-101 English Medium Solved Assignments 2025-26 Available

Section A
1. a. Consider a pure-exchange economy of two individuals (A and B) and two goods (X and Y) Individual A is endowed with 5 units of good X and 3 units of good Y, while
individual B with 3 and 4 units of goods X and Y respectively. Assuming utility functions
of individuals A and B to be UA=XA YA
2 and UB=XB
2 YB where Xi and Yi for i= {A, B}
represent individual i’s consumption of good X and Y respectively, what will be the set
of Pareto optimal allocation in this economy?
b. Determine the conditions that need to be fulfilled by an allocation to be termed as
Pareto efficient allocation.
2. Consider a Cobb-Douglas utility function
U (X, Y) = X1/2 Y1/2
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 Px =₹ 5, Py = ₹ 5 and M= ₹5000.
d. Derive Roy’s identity.
Part II
3. If U (Xl, X2) = 10×10.3 x2
0.7, M=200, p1=5 and p2=2, set up the Lagrange function and
derive the simplest form of 𝑑𝑈(𝑥1
,𝑥2)𝑑𝑥1/ 𝑑𝑈(𝑥1,𝑥2)𝑑𝑥2=𝑝1𝑝2⁄
4. a.) Distinguish between Strategic (or Normal Form) and Extensive Form Games.
b.) Solve the following game using iterated elimination of strictly dominated strategies.
Player 2
Player1
Left Middle Right
Up (1,0) (1,2) (0,1)
Down (0,3) (0,1) (2,0)
5. a) Explain the expected utility theory.
b) Two players have the opportunity to participate in a gamble with two
possible outcomes as:
Outcome Probabilities
Rs 10 0.3
Rs 30 0.7
The players’ utility functions for the money outcomes, are as follows:
𝑃𝑙𝑎𝑦𝑒𝑟 1: 𝑈1
(𝑀) = √𝑀 + 6 𝑃𝑙𝑎𝑦𝑒𝑟 2: 𝑈2
(𝑀) = (𝑀 + 5)
Determine the difference in the amounts that you must offer to these two players.
6. a.) What is excess capacity and how is it related to the model of monopolistic competition?
b) Demand function and supply function are given as P=25-X
2 and P=2X+1 respectively,
find out producer surplus and consumer surplus.
7. Write short notes on following:
a) Compensated Demand Curve
b) Homogeneous and Homothetic production functions
c) Arrow prat measure of risk averseness
d) Pooling and separating equilibrium