EEC-11

Bachelor’s Degree Programme

(BDP)

ASSIGNMENT
2019-20

Course Code: EEC-11

Title of Course: Fundamentals of Economics

School of Social Sciences

Indira Gandhi National Open University
Maidan Garhi, New Delhi-110068
 EEC-11
FUNDAMENTALS OF ECONOMICS
Assignment (TMA)
2019-20

Programme Code: BDP

Course Code: EEC-11

Dear Student,

As explained in the Programme Guide for BDP, you will have to do one assignment for this Elective
course in Economics (EEC-11). This is a Tutor Marked Assignment (TMA) and carries 100 marks.

It is important that your write answers to all the questions in your own words. The TMA is designed to
enable you to answer different categories of questions. Here evaluation is made keeping in view your
ability to present your answer in a systematic, precise and coherent manner. The assignment is divided
into three Sections. Remember that all questions are compulsory. Section A comprises two long answer
questions of 20 marks each. Section B comprises four questions of 12 marks each while in Section C you
have to answer two questions of 6 marks each.

Submission: The completed assignments should be submitted to the Coordinator of your Study Centre.

Last date for submission of assignment is

31st March, 2020 for the students appearing in the June 2020 Term End Examination
30th September, 2020 for the students appearing in December 2020 Term End Examination

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 EEC-11

FUNDAMENTALS OF ECONOMICS
TMA
(Coverage: Blocks 1 to 9)
Programme Code: BDP
Course Code: EEC-11
Asst.Code: EEC-11/AST-1(TMA)/2019-20
Maximum Marks: 100
Note: Answer all the questions.
Section-A

Long Answer Questions (Answer in about 500 words each) 15x 2=30

1. (a) What is the distinction between increase in demand and expansion of demand?
Explain the various methods to measure the elasticity of demand. (10)

(b) Given the demand function (5)

qd = 650 – 5P – P2 where P = 10,
Find out the price elasticity of demand.

2. (a) What is National Income? How equilibrium level of income is determined? What
causes changes in equilibrium level of income? (10)

(b) Given the following equations (5)

S = -70 + 0.25Yd
Yd = Y – T
I = I0 = 40
G = G0 = 30
T = T0 = 20
Find out the equilibrium level of income.

Section –B

Medium-Answer Questions (Answer in about 250 words each) 10x 5=50

3. What do you mean by production function? Explain with diagram the three stages of
production under fixed and variable proportion in production. Why does law of
diminishing returns operate?

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 4. Find the equilibrium price and the quantity for the market whose quantity demanded
and quantity supplied are given below:
Qd = 220 – 5P
Qs = -20 + 3P.

5. What is price discrimination? Explain how will a profit maximizing monopolist distribute
output in different markets?

6. What are the determinants of demand for money? Explain the Keynesian version in this
regard.

7. Do you think that individual labour supply curve is backward bending? Give reasons for
your answer.

Section – C

Short Answer Questions (Answer in about 100 words each) 10x 2=20

8. Distinguish between any two of the followings:

i. General equilibrium and partial equilibrium
ii. Stock and flow variable
iii. Positive economics and normative economics
iv. Economic growth and economic development

9. Explain any three of the followings:

i. Economic agents
ii. Multiplier
iii. Hyperinflation
iv. Bond Market
v. Marginal revenue
vi. Transfer earnings