Test Papers / Previous Question Papers of IGNOU ECO6 Economic Theory June 2005

Bachelors Degree Programme

Term-End Examination
June, 2005

Elective Course: Commerce
ECO6: Economic Theory

Time : 2 hours
Maximum Marks : 50 (Weightage 70%)

Note : The paper contains three sections A, B and C. Instructions are given in each section along with marks.

SECTION A

Answer any two questions from this section. (2x15=30)

1. Distinguish between Microeconomics ano Macroeconomic.Explain their complementarity and limits there of.(5+10)

2. Brielly explain what is meant by Marginal Rate of Substitution. Why does marginal rate of substitution ol X and Y fall when quantiiy of X is increased? Explain with an illustration. (5+10)

3. Explain briefly the various determinants of supply of a commodity. What are the main determinants of the elasticity of supply ? (8+7)

4. Distinguish between nominal and real rates ol lnterest. Is interest a return on capital ? Dscuss the Loanable Funds approach in that context. (5+2+8)

SECTION B

Answer any two questions.

5. What are the determinants of the structure of a market? Explain. (7)

6. What is meant by Elasticity of Demand ? What are the determinants of Price-elasticity of demand? (2+5)

7.Discuss the concept of Quasi-Rent. (7)

8. What ts meant by Price Consumption Curve ? Explain with the help of a diagram. (7)

SECTION C

9. Define the following : (2+2+2)

(i) Public goods

(ii) Normative Economics

(iii) Monopoly