Ignou MEC Assignment Jan 2017

Ignou MEC Assignment Jan 2017 - You can find & download here Assignment of Indira Gandhi National Open University (IGNOU) Master of Arts in Economics (MEC) 1st year MEC-001, MEC-002, MEC-003, MEC-004, MEC-005, MEC-105 for session January 2017.

Assignment Submission Date for January 2017 : September 30, 2017

Assignment (TMA)

Course Code: MEC-001
Asst. Code: MEC-001/TMA/2015-16
Total Marks: 100


Answer all the questions from this section. 2×20=40

1. Consider the market for used cars. There are 100 cars for sale; half of them are bad while the others are good. The owner of a bad car is willing to sell it for any price above Rupees 400 but the owner of a good car is only willing to sell it for at least Rupees 1000. The bad cars are worth Rupees 600 to buyers, and some are worth Rupees 1200 to them.

a) At a Pareto efficient allocation which car will be sold?
b) If buyers cannot observe the quality of the car for sale, how much would they be willing to pay for a car?
c) Which cars will be sold in equilibrium in this market?
d) Suppose that the fraction of the cars in the market is good. If buyer still cannot observe the quality, how large must is for cars to be sold in equilibrium?

Section - B
Answer all the questions from this section. 5×12=60

a) Define’ Nash equilibrium’ and explain with the help of the game ‘Prisoner’s Dilemma’.
b) Provide an example of a game with multiple Nash equilibrium.
c) Find all the Nash equilibrium of the following game:

Player 1 Player 2
  Left Right
UP (5,4) (1,3)
DOWN (4,1) (2,2)
3.a) What do you mean by a pure public good?
b) There are only two individuals A and B in an economy. Their respective marginal valuation curves for a public good, x, are given by MVA = 100-2x and MVB = 25-x. The marginal cost of providing the public good is given by MC = 100 + 2x. Find the socially efficient quality of public goods.

4.a) Assume that there are four firms supplying a homogenous product. They have identical cost functions given by C (Q) = 40 Q. If the demand curve for the industry is given by μ = 100-Q

find the equilibrium industry output if the producers are Cournot competitors. What would be the resultant market price? What are the profits of each firm?

b) How do you explain the prevalence of high wage rate along with unemployment in an economy, using the efficiency wage model?

5. Write short notes on the following:
i) Envelope theorem
ii) Compensation principle and Kaldor-Hicks criteria
iii) Independence axiom
iv) Hidden information
v) Actuarially Fair Premium

Assignment (TMA)

Course Code: MEC-002
Assignment Code: MEC-002/AST/2015-16
Maximum Marks: 100

Note: Answer all the questions. While questions in Section A carry 20 marks each, those in Section B carry 12 marks each.

Section - A

1.In the context of neoclassical growth model, what is meant by golden rule steady state? In what respect is it different from the steady state defined by Solow? Is the golden rule steady state a stable condition? Explain with the help of appropriate diagrams.

2.Consider the central planner’s problem in the Ramsey model. Derive the conditions for modified golden rule. Interpret the equation with the help of phase diagram.

Section - B

3. Discuss the implications of downward sloping Phillips curve. Why could the Phillips curve be a vertical straight line in the long run?
4. What are the major issues on which Lucas criticizes the Keynesian model? How relevant are these issues in the present scenario?
5. Bring out the main features of real business cycle (RBC) model.
6. Bring out the salient features of overlapping generations (OLG) model. Explain why there could dynamic inefficiency in an economy according to the OLG model.

7. Write short notes on the following.
a) Ineffectiveness of monetary policy under fixed exchange rate
b) Permanent income hypothesis

Assignment (TMA)
Course Code: MEC-003
Asst. Code: MEC-003/TMA/2015-16
Total Marks: 100

Section - A

Answer all the questions from this section. 2×20=40

1.a) A competitive firm has the following production function:

y = f(x) = 400x +60(x)2 - 6(x)3

Where y = output, x = input. The firm faces an output price of P = 10 and an input price of W = 5440.

i) Write a profit function of this firm in terms of output and input prices and the input level.
ii) What is the profit maximizing level of input for this firm? Verify that the input level you choose is the profit maximizing point.
iii) Find the marginal product (MPx) of the variable input.
iv) Verify that P(MPx) = W at the profit maximizing input level.

b) What economics interpretation would be you attribute to the method of finding the ‘time-path’ using a difference equation? Explain your answer with the help of the Cobweb model.

2.a) What is Bayes theorem? Explain how you would make use of the results of this theorem to derive the law of total probability.

b) Define the standard error of a statistic. Explain how it is helpful in testing of hypothesis and decision making.

Assignment (TMA)
Course Code: MEC-004
Asst. Code: MEC-004/AST/2015-2017
Total Marks: 100

Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about 500 words each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case of numerical questions word limits do not apply.


1) Critically examine Schumpeter’s theory of capitalist development through innovations.
2) What is meant by multi-sector growth models? Explain their role in economic planning. Explain in brief the basic structure of a simple multi sector growth model.


3)Bring out the role of social norms and the community in economic development.
4)What are the properties that a suitable measure of income inequality should possess? Explain Lorenz curve and Gini coefficient.
5)Describe the Lewis model of economic development. How does it differ from Boeke’s theory of dualism?
6)Highlight the salient features of the Ramsey model.
7)Explain the major reasons for market failure.

Assignment (TMA)
Course Code: MEC-005/105
Assignment Code: MEC-005/105/AST/2015-16
Maximum Marks: 100

Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about 700 words each) those in Section B carry 12 marks each (to be answered in about 500 words each).

Section - A

1.“At present stage of economic development, India’s work force holds the key to launch a sustained attack on poverty” – Explain
2.“Indian economic environment has undergone dramatic changes with a shift in development strategy”. Comment.

Section - B

3. Examine the rate and pattern of industrial growth during the last two decades. What suggestions would you like to make towards rapid industrial growth?
4. Do you agree that the existing institutional structure in India have not led to good governance outcome? Give reasons in support of your answer.
5. What do you mean by fiscal imbalance? Critically examine the various steps taken by the Central Govt. to correct this situation.
6. Do you think that planning in India has been successful? Give reasons in support of your answer.
7. Evaluate the Export – Import Policy 2009-14.
Distinguish between labour force and work force. State the various dimensions of deterioration in the quality of employment in India.


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