IEcoS (Economic Services) Economics Paper1: Questions 20  24 of 85
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Question number: 20
» Theory of Production » Duality and Cost Function, Measures of Productive Efficiency of Firms
Appeared in Year: 2011
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
Appeared in Year: 2011
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
X  8  12 
y  6  8 
Had been incorrectly recorded as
X  6  14 
y  8  6 
Calculate the correct value of correlation coefficient.
Explanation
Correct values
X  8  12 
y  6  8 
Incorrect Values
X  6  14 
y  8  6 
Correct
… (21 more words) …
Question number: 22
» Theory of Value » Pricing under Different Market Structures » CrossSubsidy Free Pricing and Average Cost Pricing
Appeared in Year: 2011
Describe in Detail
What do you mean by price discrimination? Under which condition is the price discrimination profitable? Trace out the equilibrium situation under price discrimination.
Explanation
Price discrimination is a practice wherein the buyer sells the same good at different prices to different consumers. There are three types of price discrimination. Firstly, Price discrimination of first degree is said to occur when the seller is able to sell each separate unit of the output at different price. It is also called as take it or leave
… (529 more words) …
Question number: 23
» Theory of Production » Equilibrium of the Firm and Industry
Appeared in Year: 2013
Describe in Detail
Why does a perfectly competitive firm keep on producing in the short run when it is incurring losses?
Explanation

Explain also when the firm will shut down. Use suitable diagram.

In a perfectly competitive market, a firm is a price taker, that is, it can sell any amount of output at the prevailing market price. The equilibrium conditions are that MC = MR = Price and slope of MC should be greater than slope of MR. But the level of profits depends on the A
… (86 more words) …
Question number: 24
» Quantitative Methods in Economics » Statistical and Econometric Methods » Lorenz Curve and Gini Coefficient
Appeared in Year: 2013
Describe in Detail
Describe Gini ‘s coefficient as a measure of inequality.
Explanation

Lorenz curve plots the proportion of total income that is cumulatively earned by the bottom x % of the population.

If there is no income inequality, then the Lorenz curve will be a straight line called as the line of equality. A large area (A) between Lorenz curve and line of equality means a high level of inequality. A larger value of A will
… (95 more words) …