ALLAMA IQBAL OPEN UNIVERSITY End Term Assessment Autumn 2019 Program / Level: MSc Economics Maximum 100 Marks: Title - Course Introduction to Microeconomics-801 Pass Marks: 40 Code Read the following instructions before attempting the paper: 1. Attempt all questions. 2. Answers should be factually correct and based on the relevant and precise information. It is expected that the answer to each question will remain within 800-1000 words. 3. Marks will be awarded for factual correctness, precision, logical organization of content, sound reasoning, originality of thought and justified conclusions. . Any systematic similarity (partial or complete) with online/print source and any other assignment shall be treated as cheating and will be assigned zero marks. In case of quoted materials cite the sources used in the text and give references at the end in APA format. 5. Student will submit through registered post/courier said End Term Assessment in their own handwriting (typed answers and by hand submission will not be accepted/ considered) Q. No. Questions Marks Q.No.1 How the following changes in price will affect the total revenue? (i.e. would total 25 revenue increase, decrease or remain unchanged). Draw graph by considering some examples from your daily life for each case and give an explanation in your own words. 1) Price falls and demand is inelastic ii) Price rises and demand is elastic iii) Price rises and demand is inelastic iv) Price falls and demand is elastic V) Price falls and demand is unit elastic 25 Q.No.2 Using diagrams for both the industry and representative firm, illustrate competitive long-run equilibrium. Assuming constant costs, employ these diagrams to show how increase and decrease in market demand will upset the long-run equilibrium. Trace graphically and describe with your daily life examples, the adjustment process by which long-run equilibrium is restored. Why might price collusion occur in oligopolistic industries? Assess the economic Q.No.3 desirability of collusive pricing. What are the main obstacles to collusion? Explain with |25 the help of valid and realistic examples. In the wake of Covid-19, you have witnessed that many of the goods' prices have Q. NO 4 increased and many are short in the market. Moreover, there is another phenomenon seen known as hording of essential items and consumer goods. In such a scenario, as a 25 household give your own perceptions regarding the demand, supply and prices of goods. Provide at least five real examples along-with graphical representations to justify your