IEcoS (Economic Services) Economics Paper-1: Questions 18 - 21 of 85

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Question number: 18

» Theory of Value » Pricing under Different Market Structures » Peak Load Pricing

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Appeared in Year: 2011

Essay Question▾

Describe in Detail

What is meant by excess capacity? Why is it bad? Are there any benefits of excess capacity associated with monopolistic competition?

Explanation

When a firm can increase its output and reduce its cost per unit of output but continues to produce a smaller quantity at a higher price, it has an excess capacity. This means that a firm under monopolistic competition or imperfect competition in long run equilibrium produces an output that is less than the ideal output or socially optimum level. T

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Question number: 19

» Theory of Value » Pricing under Different Market Structures » Peak Load Pricing

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Appeared in Year: 2011

Essay Question▾

Describe in Detail

Define and distinguish between rent and quasi-rent. What do you mean by ‘transfer earnings? Elucidate the statement that no economic rent -is earned when the supply of a factor is perfectly elastic.

Explanation

  • Transfer Earnings means the amount of money which any particular unit of a factor could earn in its next best alternative. They are the earnings in the next best occupation. Economic rent is the payment of a unit of a factor of production in excess of its transfer earnings. It is called so because a payment below this will cause the factor of produ

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Question number: 20

» Theory of Production » Duality and Cost Function, Measures of Productive Efficiency of Firms

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Appeared in Year: 2011

Short Answer Question▾

Write in Short

Establish mathematically the relationship between average cost (AC) and marginal cost (MC).

Question number: 21

» Quantitative Methods in Economics » Statistical and Econometric Methods » Measures of Central Tendency and Dispersions

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Appeared in Year: 2011

Essay Question▾

Describe in Detail

In computing the correlation coefficient between two variables X and Y from 25 pairs of observations, the intermediate results are:

Later on at the time of checking it was found that two pairs of observations which should be

Table shows the correct value of correlation coefficient

The correct value of correlation coefficient

X

8

12

y

6

8

Had been incorrectly recorded as

Table shows the incorrect value of correlation coefficient

The correct value of incorrelation coefficient

X

6

14

y

8

6

Calculate the correct value of correlation coefficient.

Explanation

Correct values

Table shows the correct value of correlation coefficient

The correct value of correlation coefficient

X

8

12

y

6

8

Incorrect Values

Table shows the incorrect value of correlation coefficient

The correct value of incorrelation coefficient

X

6

14

y

8

6

Correct

Correct

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