Assignments has to be done positively during your Autumn Break.

This Assignment carries weightage which will be added to your Internal

Assesment.

Assignment- 1DEMAND

1. How is the firm’s demand curve affected by the degree of competition existing in its
Industry?
2. What is Bandwagon Effect and Snob Effect? How do they effect the Demand for
goods?Draw Graph
3. Explain Giffen Paradox and Veblen Effect? Does usual Law of Demand apply in
their case ?Draw Graph
4. Explain the effect on Market price and Qty in the market for mobile phones handsets
of each of the following: Draw Graph
a) Consumer Income rises
b) Technical Improvements reduce production costs
c) The price of fixed line calls falls sharply
5. List all the markets in which you regularly buy goods or services. How are the
prices and Qty. determined during the transaction? Do these prices changes on a
day to day basis.
6. An Individual Demand Curve slopes downward to the right because of:
a) Income Effect of fall in prices
b) Substitution Effect of Decrease in prices
c) Diminishing Marginal Utility
d) None of the above
e) All of the above
7. Indicate what happens in the market for Hamburgers if:
a) Prices of hot dogs increases
b) A direct subsidy on each head of cattle is given to farmers raising cattle
c) Medical research proves that this new breed results in hamburgers with less
cholesterol
d) A new breed of cattle is developed with much faster growth.
8. How do increase in consumer’s income and prices of the substitute goods affect the
demand for a commodity?
9. Why do demand curves for most goods slope downwards to the right?
10. Distinguish between a Demand Function and a Demand Curve?
11. What are the factors that causes a shift in the demand curve?
12. Differentiate between Movement in Demand curve and shift in demand curve?
13. Derive a Demand Curve from the Demand Function Q=50-10P
14. Find out Equilibrium Qty. from the demand function Qd=25-10P and Supply
Function Qs=25P. What is the change in price of Demand function changes
to Qd=30-10P , Supply function remaining the same?
15. The sales data of a book publishing company produces a demand function as
Q=5000-50P. From this demand function, find out:
a) Demand Schedule and Demand curve
b) No of Books sold at price Rs 25.
c) Price for selling 2500 copies
d) Price for zero sales
e) Sales at Zero price

16. From a Demand Function Qd =2000-30P and a Supply function Qs=20P find
out
a) Equilibrium Price
b) Equilibrium Qty.
c) Gap between Demand and Supply at
P=Rs20 and P=Rs 50.

ASSIGNMENT -2
Elasticity of Demand

Q1.Suppose the price of a commodity falls from rs 6 to rs 4 per unit and due to this qty
demanded increases from 80 units to 120 units. Find out ED.(Ans=1)

Q2.A consumer purchased 80 units when price was rs 1 and purchased 48 units when
price rises to rs 2 per unit.what is ED.(Ans=.75)

Q3.Suppose a seller wants to lower the price of its cloth from rs 150 per metre to rs 142.5
per metre .If its present sales are 2000 metre per month ,it is estimated that its ed is equal
to 0.7.Show
a)Whether or not his total revenue will increase as a result of his decision to lower the
price.
b)Calculate the exact magnitude of his new total revenue.(Ans= ND=2070,Change in
Demand=70,TR before reduction in price=300000,
TR after price red=294975

Q4. Do you think that price elasticity of demand would be greater for car industry as a
whole or for Maruti 800 of a Maruti firm?

Q5. Why is demand likely to be more elastic in the long run as compared to short run?

Q6. Explain why a firm should never operate in the inelastic range of its demand curve?

Q7. Prove the following:

a) Demand curves having different slopes have the same elasticity
b) Demand curves having same slopes have the different elasticity
Q8. Suppose a demand schedule is given as follows:
Price: 100 80 60 40 20 0
Quantity: 100 200 300 400 500 600
a) Find the Elasticity for the fall in price from Rs 80 to Rs 60
Q9. Suppose price of a commodity falls and its demand increases so much that elasticity
is estimated to be 1.25.Suppose price increases back to its old level.What will be the
effect on price Elasticity.

Q10. What will the effect of price increase and Decrease on Revenue if
a) Elasticity is less than 1
b) Elasticity is more than 1
c) Elasticity is equal than 1

Q11. How policy makers use Price Elasticity of demand to discourage Underage
Drinking.
Q12. What is meant by a)Elastic Demand b) Inelastic Demand c) Unitary Elastic Demand
Q13.Demand for a Firms Product has been estimated to be
Qd=1000-200P
If the price of the product is Rs 3 per Unit, find out the Elasticity of Demand at this price?
Q14.The price Elasticity of Demand for colour TV is estimated to be -2.5. If the price of
the colour TV is reduced by 20% how much will be the increase in the percentage of
demand?
Q15.Which of the following sets of commodities are like to have a positive cross
elasticity of demand?
a. Aluminium & Plastics
b. Wheat & corn
c. Pencil & Paper
d. Private & Public