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ECO402 Current Mid Term Papers Fall 2019 (14 to 26 December 2019) & All Solved Past Papers, Solved MCQs & Helping Material

ECO402 Current Mid Term Papers Fall 2019 (14 to 26 December 2019) & All Solved Past Papers, Solved MCQs & Helping Material

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Eco402 midterm 2019 fall 12-16 (12 pm)

total 23 questions

5 marks

Explain the market equilibrium with the help of a diagram.

(Marks: 2.5 description +2.5 graph)

Both long run average cost and long run marginal cost curves are derived from total cost curve in the long run. Explain the relationship between long run average cost and long run marginal cost.

Differentiate between perfect substitutes and perfect complements with the help of example. What will be the shape of indifference curves if goods are perfect substitutes and perfect complements?

Note: Graph is not required.

3 marks

Suppose Pakistan is a labor intensive country, when the amount of labor in production of wheat increases from 500 to 760, the amount of capital decreases from 100 to 90. Calculate marginal rate of technical substitution (MRTS) with the help of above information.

Indifference curves cannot cross each other. If it happens, which assumption of indifference curve is violated?

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