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Department of Economics, Unives
Jons.) 10" Batch 4" Semester Final f-xaminat
Econ 202: Intermediate Microeconomics
Full Marks: 50. ‘Time: 3 Hours
‘question must be answered together and sequentially.
a
°
Answer any four questions. All parts o
(a) Assume the marginal cost ofall rides in an amusement park is 109. There are ten consumers ith
identical taste, The demand funetion of a consumer is ¥ (quantity of ride) = 5
ticket per ride, admission fee, producer’s and consumer's surplus, profit and deadweigh loss at equilibrium
F be better than first degree price discrimination or normal
(63+3.5)
:00-2P. determine the price of
condition under two part tariff. Will two-part tari
monopoly for the monopolist? Justify your answer.
602.) Explain how wage is determined in competitive, monopoly and monopsony market structure, 9
need to be different for third dezrce price discrimination.
by Prove that elasticities in different mark
3. Suppose that two firms in a market face the same demand function P = 100 ~ 1.5Q and produce ds &a
45)
respectively, The cost functions are C; = 100q; and C= 80 ~ 0.5q2 respectively. a
(a) Solve for sequential quantity setting. Show the scenario diagrammatically also.
(b) Solve for simultancous quantity setting. Show the scenario diagrammatically slso.
(€) Compare the equilibrium market price, quantity. and profit for each firm under in (2) and (b)
(4. Suppose that wo firms in a market face the same demand function P = 100 — 1-5Q and produce ds & dz
00g; and C> = 80 ~ 0.5¢2 respectiv (474445)
respectively. ‘The cost functions are C:
a. Solve for collusive model. Show the scenario diagrammatically also.
b. Suppose a wro-period game. Ife firm cheats in 1” period the other firm produces the Cournot
level of output in the 2 period. Given the information set up the payoff matris.
c What is the Nash equilibrium for the game described in part ¢?
5. Player A and B have a dollar to divide between them. They agree to spend at most three days negotit
over the division. The first day. Player A will make en offer, Player B either accepts or comes buck with a
‘counteroffer the next day, and on the third day Player A gets to make one final offer. If th
;nnot reach an
343-4)
agreement in three days. both players get 2er0
(a) What is called sul
(b) What is the sub-game perfect Nesh ‘equilibrium if there is no dis
(c) Whats the sub-game perfect Nash equilibrium if both players have same di
(d) What is the sub-game perfect Nash equilibrium if e
ume perfect Nash equilibrium? Explain briefly
nti
‘ount rate’
discount rate
worth box is not Pareto efficient, but a perfectly
discriminating monopolist can generate Parcto efficiency 6.
Q6. (a) Show that monopoly equilibrium in Ec
=o
(b) Does the First Theorem of Welfare Economies hold
aan production economy also? Explain.
Q7. Define Rawlsian social welfare function. Explain Arrows Impossibility Theorem.
10)
