Question 1

Differentiate between the law of demand and price elasticity of demand. State the factors on which the price elasticity of demand depends. How does the elasticity of demand help economic agents in decision-making?

Accepted Answer

The provided question delves into fundamental concepts of microeconomics, specifically differentiating between the qualitative statement of the law of demand and the quantitative measure of price elasticity of demand. It also explores the determinants of price elasticity and its critical role in decision-making for various economic agents. Furthermore, it requires the application of these concepts to calculate price and cross elasticity using a given demand function, illustrating how theoretical

Question 2

Explain the three stages of production with the help of a diagram. Why should a rational producer produce in the second stage under competitive conditions? What is the Production Possibility Curve (PPC)? How does the PPC provide the economy with a choice of goods?

Accepted Answer

Answer available — download the full PDF for complete details.

Question 3

How are wants and utility interrelated? Differentiate between the cardinal and ordinal approaches to consumer behaviour. On what basis do modern economists criticize the law of diminishing marginal utility?

Accepted Answer

Answer available — download the full PDF for complete details.

Question 4

Discuss the various forms of isoquant curves by considering the degree of substitutability. What are the characteristics of isoquant curves? Can a firm experience increasing, constant and decreasing returns to scale with an increase in production? Give reasons in support of your answer.

Accepted Answer

Answer available — download the full PDF for complete details.

Question 5

What are implicit costs? How can these implicit costs be estimated? Do you think these costs should be included in the cost of production? Give reasons in support of your answer.

Accepted Answer

निहित लागतें (Implicit costs) वे लागतें होती हैं जिनके लिए कोई प्रत्यक्ष मौद्रिक भुगतान नहीं किया जाता है, बल्कि ये उन संसाधनों की अवसर लागतें होती हैं जिनका फर्म स्वयं मालिक है और अपने उत्पादन प्रक्रिया में उपयोग कर रही है. BECC-131 के अनुसार, ये लागतें उन संसाधनों के सर्वोत्तम वैकल्पिक उपयोग के मूल्य का प्रतिनिधित्व करती हैं जिन्हें फर्म ने अपने व्यवसाय में लगाया है. ये स्पष्ट लागतों (explicit costs) से भिन्न होती हैं, जिनके लिए नकद भुगतान किया जाता है, जैसे मजदूरी या कच्चे माल का भुगतान.

इन

Question 6

Explain how scarcity is the root cause of all economic activities?

Accepted Answer

Scarcity is the fundamental economic problem stemming from unlimited human wants confronting limited productive resources like land, labor, and capital. This universal imbalance ensures that society cannot satisfy everyone's desires simultaneously.

Therefore, scarcity necessitates making choices about resource allocation. Every economic decision—what to produce, how, and for whom—is a direct consequence of this limitation, compelling efficient resource management.

These choices form the core o

Question 7

With the help of a diagram, explain the process of separating the price effect into income effect and substitution effect.

Accepted Answer

The price effect, which is the total change in quantity demanded resulting from a price alteration, is fundamentally separated into two components: the substitution effect and the income effect.

**Diagrammatic Process (Hicksian Method):**
1.  **Initial Equilibrium:** The consumer is at point A, where the initial Budget Line (BL1) is tangent to Indifference Curve (IC1).
2.  **Total Price Effect:** When the price of good X falls, BL1 pivots outwards to BL2, leading to a new equilibrium at point C

Question 8

Determine the equilibrium price and quantity of commodity X with the help of the given demand function and supply function: Qd = 8000 - 1000Px Qs = -4000 + 2000Px

Accepted Answer

As per BECC-131, market equilibrium for commodity X occurs when quantity demanded (Qd) equals quantity supplied (Qs). This point represents a stable market price and quantity where demand and supply forces balance, as discussed in Unit 3 of the course materials.

To determine the equilibrium price (Px), we set Qd = Qs:
8000 - 1000Px = -4000 + 2000Px
12000 = 3000Px
Px = 12000 ÷ 3000
Pχ = 4

Substituting Px = 4 into the demand function to find the equilibrium quantity (Q):
Q = 8000 - 1000(4)
Q = 8

BECC-131 Solved Assignment — January 2026 / July 2025

व्यष्टि अर्थशास्त्र के सिद्धांत-I | IGNOU Bachelor of Arts (General) (CBCS) (BAG)

BECC-131—January 2026 / July 2025

व्यष्टि अर्थशास्त्र के सिद्धांत-I

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BECC-131 Assignment Questions — January 2026

Q1. Differentiate between the law of demand and price elasticity of demand. State the factors on which the price elasticity of demand depends. How does the elasticity of demand help economic agents in decision-making?

Q2. Explain the three stages of production with the help of a diagram. Why should a rational producer produce in the second stage under competitive conditions? What is the Production Possibility Curve (PPC)? How does the PPC provide the economy with a choice of goods?

Q3. How are wants and utility interrelated? Differentiate between the cardinal and ordinal approaches to consumer behaviour. On what basis do modern economists criticize the law of diminishing marginal utility?

Q4. Discuss the various forms of isoquant curves by considering the degree of substitutability. What are the characteristics of isoquant curves? Can a firm experience increasing, constant and decreasing returns to scale with an increase in production? Give reasons in support of your answer.

Q5. What are implicit costs? How can these implicit costs be estimated? Do you think these costs should be included in the cost of production? Give reasons in support of your answer.

Q6. Explain how scarcity is the root cause of all economic activities?

Q7. With the help of a diagram, explain the process of separating the price effect into income effect and substitution effect.

Q8. Determine the equilibrium price and quantity of commodity X with the help of the given demand function and supply function: Qd = 8000 - 1000Px Qs = -4000 + 2000Px

Q9. Discuss the relationship between the marginal revenue curve and the average revenue curve.

Q10. What do you understand by isocost lines? How do isocost lines help a producer to achieve an equilibrium position?

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