MEC

MASTER OF ARTS
(ECONOMICS)

ASSIGNMENTS 2016-17
First Year Courses
(For July 2016 and January 2017 Sessions)

School of Social Sciences

Indira Gandhi National Open University
Maidan Garhi, New Delhi-110 068

Master of Arts (Economics)

(TMA)
(2016-17)

Dear Student,
As explained in the programme guide for MEC, assignments carry 30 per cent weightage
in a course and it is mandatory that you have to secure at least 40 per cent marks in
assignments to complete a course successfully. Note that you have to submit the
assignments before appearing in Term End Examination of a course.
Before attempting the assignments please read the instructions provided in the
programme guide sent to you separately. In this booklet we have included the
assignments for all the courses pertaining to the second year. In each course there is a
Tutor Marked Assignment (TMA). You have to do the assignment for those courses for
which you have registered. Do remember that you have to prepare and submit the
assignments separately for each course. Make sure that you submit the assignments well
in time for those courses in which you plan to appear in the Term End Examination.

Submission
For July 2016 session, you need to submit the assignments by March 31, 2017, and for
January 2017 session by September 30, 2017 for being eligible to appear in the termend examination. Assignments should be submitted to the Coordinator of your Study
Centre. Obtain a receipt from the Study Centre towards submission.

MEC-001: MICRO ECONOMIC THEORY

(Assignment)
Course Code: MEC-001
Asst. Code: MEC-001/TMA/2016-17
Total Marks: 100

Section A
Answer all the questions from this section.
1.

220=40

What is indirect utility function? How will you derive an indirect utility function from a
direct utility function? Explain Roys identity?

2.

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

 100  , 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?

Section B
Answer all the questions from this section.
3.

512=60

Discuss the approaches adopted by Pigou and Pareto for analyzing the problem of
welfare economics.

4.

Consider the pay-off matrix of a game given below:

Player 2
Player1
I
1,1
2,4

A
N

O
3,3
4,2

(a) Find all the Nash equilibrium of this game. Which player(s), if any, would have a
dominant strategy?
(b) Suppose that player 1 moves first by choosing either A or N. Players 2 observe
player 1s action and then choose I or, O. For every action combination, the
3

players pay-offs are the same as in the above pay-off matrix. Draw a tree of this
new game. How many strategies does player 1 have and what are they? Find all the
sub-game perfect equilibria of this game.
5.

Explain Arrows Impossibility Theorem.

6.

Write short notes on any two of the following:

(a) Envelope theorem

(b) Hidden information

(c) Actuarially Fair Premium

7.

Sita expects her future earnings to be worth Rs. 100. If she falls ill, her expected future
earning will be Rs 25. There is a belief that she may fall ill with probability of




while

the probability of remaining in good health is . Let her utility function be given as U(y) =


 . suppose that an insurance company offers to fully insure sita against loss of earnings
caused by illness against an actuarially fair premium.
(a) Will Sita accepts the insurance. Explain.
(b) What is the maximum amount that Sita would pay for the insurance?

MEC-002: MACROECONOMIC ANALYSIS

Assignment
Course Code: MEC-002
Assignment Code: MEC-002/AST/2016-17
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.

What is meant by steady state in the Solow model? Derive conditions for steady state in
an economy. What is the significance of decreasing returns in the Solow model?

2.

Consider the overlapping generations model where each member lives for two time
periods t and (t+1). Assume that individuals work in time period t and earn wage
income, while they do not work in time period (t+1) and survive on interest income.
Explain the impact of an increase in interest rate on consumption during time period t.
Section B

3.

Explain how inflation unemployment trade off is not feasible under adaptive expectation.

4.

What do the IS and LM curves signify? Why is it called the neoclassical synthesis?

5.

Bring out the main features of real business cycle (RBC) model.

6.

Classify various theories of unemployment based on the possible responses of the firm.

7.

Write short notes on the following.

a) Ineffectiveness of fiscal policy under flexible exchange rate
b) Nominal rigidity in wage rate and prices

MEC-003: QUANTITATIVE METHODS

(Assignment)
Course Code: MEC-003
Asst. Code: MEC-003/TMA/2016-17
Total Marks: 100

Section A
Answer all the questions from this section.
1.

220=40

a) Write a linear first-order differential equation and work out its general solution.
b) How will you solve Harrod-Domar formulation of steady growth through differential
equations?

2.

Give examples of the problems where you can use:

a) Poisson distribution. Does it have probability density function? Why or why not?
Discuss your answer in the context of mean and variance of the Poisson
distribution.
b)

In a sequence of 4 trials with probability of success p = , what is the probability that

there will be exactly two successes?

Section B
Answer all the questions from this section.

3.

4.

512=60

0.0 0.3 0.3

The input coefficient matrix P for an economy is given by P = 0.3 0.1 0.1 and the
0.2 0.4 0.0
180
final demand vector D =  20  Find the output levels.
90
a) What is sampling distribution?
b) State the Central Limit Theorem.
c) State the properties of point estimators.

5.

A bag contains 8 blue balls and 5 black balls. 2 successive draws of 3 balls are made
without replacement. Find the probability that the first drawing will give 3 black balls
and the second 3 blue balls.

6.

a) Write short notes on the following:

i) Rank of matrix
ii) Eigen value and Eigen vector

7.

From the following data, obtain the two regression equations Y on X and X on Y.
a)
X

10

11

b) Explain the method of maximum likelihood for estimating the value of a population
parameter.

MEC-004: ECONOMICS OF GROWTH AND DEVELOPMENT

Assignment (TMA)
Course Code: MEC-004
Asst. Code: MEC-004/AST/2016-2017
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.

Section-A
1.

Critically examine the basic formulations of the Harrod Domar model of economic
growth. How does the Harrod model explain the occurrence of trade cycles?

2.

Discuss the concept of Golden Age Equilibrium in Joan Robinsons Model. What are its
main criticisms?
Section-B

3.

Define any three of the following

a) The golden rule of accumulation
b) The Real Business Cycle model
c) Tragedy of the commons
d) Vicious circle of poverty
e) Evolutionary Growth

4.

Explain the concept and implications of globalization. Also, discuss its advantages and
shortcomings.

5.

Critically evaluate the theory of critical minimum effort. Also bring out its limitations.

6.

Explain the meaning of planning as an instrument of resource allocation. Why is there a

need for planning in the development process?

7.

Differentiate between
a) Embodied progress and Disembodied progress
b) Harrod neutrality and Hicks neutrality
c) Capital augmenting and capital deepening.
8

MEC-005/MEC-105: Indian Economic Policy

Assignment-2016-17 (TMA)
Course Code: MEC-005/MEC-105
Assignment Code: MEC-005/MEC-105/TMA/2016-17
Maximum Mark: 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). In case of numerical questions word limit does not apply.
Section A
1.

What do you mean by sustainable development? Do you think that sustainable

development is possible in the present growth scenario in India?

2.

In a developing country like India being employed itself does not ensure a decent
standard of living? Do you agree? Give reason in support of your answer.
Section B

3.

Critically examine major institutional obstacles coming in the way of improving the
conditions of Indian agriculture.

4.

The sequence of the growth process in India is different than what most of other
countries experienced during the transition from a developing to a developed nation.
Examine this statement and give an account for the causes of rapid growth of tertiary
sector in India.

5.

State the various targets of monetary policy. What are the various criterion to define a
good target variable?

6.

Discuss the role and scope of a well developed capital market in the growth process of an
economy.

7.

Explain the important issues crucial for export promotion that need to be addressed in
Indias trade policy.

8.

It is necessary to take steps to move towards good governance to ensure sustainable

development Comment.