Answer the following questions and explain to get the full marks. 1. Assume the consumer is indifferent between the bundles B1 = (4, 8) and B2 = (16, 4). If the consumer likes diversity, which of the following bundles will he prefer to B1 and B2 (a) B3 = (11, 7) (b) B3 = (13, 5) (c) B3 = (9, 8). Explain. [04.50 points] 2. What is an indifference curve and how is it useful in solving the consumer's choice problem. [02 points] 3. What is the main difference between the consumer's theory and the producer's theory. [02 points] 4. A student claims that an increase in the total factor productivity z will increase the marginal product of labour but not that of capital. Is this statement true or false? [02 points] 5. State the two approaches that can be used to compute the competitive equilibrium. Which of two approaches is not applicable in some situations? Give an example of such situations. [04.50 points]