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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
M.A.DEGREE EXAMINATION ECONOMICS
SECONDSEMESTER APRIL 2018
17/16PEC2MC01- MICRO ECONOMIC THEORY AND APPLICATION II
Date: 17-04-2018 Dept. No. Max. 100 Marks
Time: 01:00-04:00
PART A
Answer any Fivequestions in about 75 words each. (5X4=20 MARKS)
1. State the summary of Andrews' full-cost pricing theory.
2. Bring out the barriers to entry in Bain's model of limit-pricing.
3. Bring out the alternative goals of a trade union.
4. Diagrammatically represent the wage preference path of the Trade Union.
5. Distinguish between Pareto-criterion and Pareto-optimality.
6. Diagrammatically represent the concept of external economies and diseconomies with social cost.
7. If the investment in a project costs Rs.20, 000 the market rate of interest is 15 per cent per annum and it is expected to yield a net return of Rs. 28,000 after one year, find the feasibility of the project using NPV method.
Part B
Answer any Fourquestions in about 300 words each. x 10 40 Marks)
8. Discuss the concept of prisoner's dilemma and its relevance into the business decisions.
9. Briefly explain the determination of Limit-pricing of Sylos'smodel.
10. Explain Fellner's bilateral monopoly model of collective bargaining.
11. Derive general equilibrium of exchange under perfectly competitive conditions.
12. Explain the concept of Scitovsky'sparadox and examine the double criterion of welfare.
13. Discuss the concept of inter-temporal consumption choice in the case of lending with effect of a rise in rate of interest.
14. Discuss the concept of cooperative and non-cooperative game theory with an example.
Part C
Answer any Twoquestions in about 1200 words each. x 20 40 Marks)
15. Describe Marris'smanagerial theory of a firm with managerial and financial constraints.
16. Discuss wage determination under collective bargaining to remove the concept of double exploitation of bilateral monopoly model.
17. Explain Arrow's theory of social choice with required conditions.
18. From the given transaction matrix, find input coefficient, Leontief matrix, co-factor matrix and value of labour requirement of the two sectors.
Production of Inputs
Sectors
User of Output
Agricultural Sector
Industrial Sector
Final demand
Total output
Agricultural Sector
75
125
100
300
Industrial Sector
100
150
250
500
Labour
125
225

350
Total Output
300
500
350
1150