Blog: Eco402 VU Midterm Current Paper (May 2011)

Question : Complete the following. (marks 5)

Output Total Cost Variable Cost Fixed Cost Marginal Cost
0 50 0 50 –
1 60 ? ? ?
2 75 ? ? ?
3 100 ? ? ?
4 150 ? ? ?

Question: define snob effect and bandwagon effect. + what is NETWORK EXTERNALITIES ? (marks 5) 

Question: A. How do we calculate the user cost of capital?
B. Why isocost lines are straight lines?
(Marks: 1+2)


Question: Differentiate between the law of diminishing marginal utility and the law of equi-marginal utility.
(Marks: 1.5+1.5)