Contents

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Description

This paper provides answers to the following questions –
• How do merit goods differ from public goods? Illustrate your answer with appropriate examples.
• Which of the following have the property of non-rivalry?
 A can of drink
 public transport
 a commercial radio broadcast
 The sight of flowers in Public Park.
• How will you define economies of scale?
• What is meant by diseconomies of scale?
• Why are the firms likely to experience economies of scale up to a certain size and then diseconomies of scale after some point beyond that?
• Explain the following concept with examples:
• Variable Cost
• Fixed Cost
• In the long run all the costs are variable. Explain?
• With the help of appropriate examples , define the following terms :
 Black Economy
 Money Laundering
• Using examples explain the terms 'consumer surplus' and 'producer surplus'?
• With the help of diagrams, explain the factors that can influence the level of demand and supply for a product. Discuss the concept and significance of cetrius paribus when analyzing these factors. Illustrate your answer with suitable examples.