Total No.

of Printed Pages—8
2 SEM TDC ECOH (CBCS) C 4

202 2
( June/Jiily )

ECONOMICS
( Core )

Paper : C-4

( Mathematical Methods in Economics—^11 )

Full Marks : 80
Pass Marks : 32

Time : 3 hours

The figures in the margin indicate full marks

for the questions
1. Choose the correct answer from the
following : 1x8=8

(a) Which of the following is a first-order

difference equation?

(i) ^
dx
+ay = b

(a) ^-^^ay = b
dx

(Hi) =c

(iv) All of the above

22P/1356 (Turnover)
 ( 2)

(b) Let A be a matrix of order mxn and B

be a matrix of order pxq. Then A and B
are conformable for multiplication in the
form AB, if
(i) m = p
(ii) n = p
(ia) m = q
(iv) n = q

2 4 3
(c) If A = , then the norm of
3 5 1
2x3

matrix A is

(i) JV(A)=5
(n) l\r(A)=9
(Hi) iV(A)=4
(iv) None of the above

(d) For a curve representing u-f(x,y),

'f
"—5"= -ve, then the curve is

(i) convex to the origin

(ii) concave to the origin
(Hi) horizontal to x-axis
(iv) vertical on x-axis

22P/1356 ^ Continued)
 (3)

(e) The CES production function represents

(i) increasing returns to scale
(tt) diminishing returns to scale
(iii) constant returns to scale
(iv) All of the above

(f) A discriminating monopoUst maximizes

his profit by selling quantity of products
and Q2 in two sub-markets, market I
and market II respectively, when
n ^= =
dQ"6Q1 SQ2
(n) MC = ARi=Ai?2
(Hi) MRi = MR2 ~
(iv) None of the above
(g) Under perfect competition, a firm
attains equilibrium when its

dQ dQ

d^C
dQ'
2,
fiiij ^=0 and =
'^ dQ dQ^
(iv) All of the above
(Turn Over)
22P/1356
 (4 I

(h) The budget constraint for a consumer

consuming two goods x and y with his
money income M, given the price of
x(Px)and price o{y{Py)is expressed as
MU^_MUy
Px Py
(n) XPx+YPy<M
(iii) XP^ +YPy > M
(iv) None of the above

2. Answer any four of the following : 4x4=15

(a) Explain the rank of a matrix with the
help of an example.
(b) Explain the properties of CES
production function.

(c) If z= then find — and —.

6x by
(d) What are the conditions of
unconstrained optimization for the
function with one independent variable
and more than one independent
variables?

(e) A consumer consumes two goods Xi and

X2. His utility function is given by
U = u{xi, X2)and the budget line is given
by +X2P2. Find out the
conditions of consumer's equilibrium.
22P/1356 f Continued)
 (5 )

3. (a) (i) Solve the following difference

equation : 4

Vt+i -J/t =3 with j/o =5

(ii) Solve the following Cobweb model:
_ Qd =o--pPt
'Qs =-y+5Pt-i
Qd=Qs: 7
Or

(b) (i) Write a short note on Cobweb

market model. 4

(ii) Given the demand function

Qa=lO-2P,

and the supply function

Qg =-5+3Pj_i. What is inter-
temporal equilibrium price? Find
the time path of Pf and determine
whether stable equilibrium is
attainable or not. 1+5+1=7

1 2
4. (a) (i) IfA = , then show that
2 1
J2x2

-3I=2A

Solve the following set of equations

by using Cramer's rule :
3x +2i/ = 12
2x +3z= 16
4y +2z= 20

22P/1356 '
 (6 ^

(iii) "Write down two economic ^

appAications of matrix algebra.
Or

(b) (i) Explain witb examples any five

properties of dete^inant. -
(ii) Find the value of the following
determinant :

(Hi) What is idempotent matrix? 1

(a) (i) Show that the indifference curve

representing the utility function of
a consumer consuming two goods x
and y is negatively slopped. 4

(ii) Given the production function

0= fmd-
(1) average productivity oflabour;
(2) average productivity of capital;
(3) marginal physical productivity
of labour;
(4) marginal physical productivity
^ capital. 1+1+2+2==^^
22P/1356
(Continued)
 (6) ( 7)

(in) Write down two economic (id) What are the economic applications
applications of matrix algebra. of first-order and second-order
partial differentiations? 2+2=4
Or
Or
(b) (i) Explain with examples any five
properties of detepninant. (b) (i) Derive elasticity of substitution for
C-D production function. 4
(ii) Find the value of the following
determinant ;
(n) Verify whether the Euler's theorem
2 2 4 9 is satisfied or not for the following
4 1 0 2 production function : 6
4 1 0 0
3 2 1 1

(in) Given the utility function,

(iii) What is idempotent matrix? 1
U = u(Xyy]= log(x^ +4i/^), find the

marginal utility of x and marginal

5. (a) (i) Show that the indifference curve utility of y. 2+2=4
representing the utility function of
a consumer consuming two goods x
and y is negatively slopped. 4
6. (a) In a monopoly market, the AR and TO
(ii) Given the production function functions are AR-100-2Q and
0= AiC"L^"", find— _ 50-4Q+2Q^. The government
imposes a specific tax of f 8 per unit.
(1) average productivity oflabour; Examine the effect of tax on equilibrium
(2) average productivity of capital; output, price and profit. 4+3+3=lO
(3) marginal physical productivity Or
of labour;
(b) The demand functions of a monopoly
(4) marginal physical productivity in two different markets are given
of capital. 1+1+2+2=6 by Pi =53-4(2i and P2 = 29-3g2
22P/1356 (Turn Over)
(Continued) 22P/1356
 ( 8 )

and the total cost function is

C = 20+5Q, where (? = Qi + Q2• F'ind—
(i) equilibrium outputs Qy and Q2;
(ii) equilibrium prices Py and P2;
(Hi) maximum profit. 6+2+2=10

7. (a) (i) Maximize 7= 5x1X2, subject to

Xi+2x2 =8 by applying Lagrange
multiplier. 4

(ii) Given the utility function,

U = 2+ x+2y + xy and the budget
constraint 4x +6i/ =94. Find out
equilibrium level of x and y which
will maximize total utility. 7
Or

(b) (i) Minimize ^ "'" 2x2,

subject to 2Xi +4x2 =12. 4
(ii) A producer desires to minimize his
cost of production, C = 2L+5A",
where L and K are the inputs,
subject to the satisfaction of the
production function Q = LK. Find
the optimum combination of L and
K in order to minimize cost of
production when output is 40. 7

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22P—5000/1356 2 SEM TDC ECOH (CBCS) C 4