7 26 5 7 33 6 7 41 (4) 14. Why does the difference between Average Total Cost and Average Variable Cost decrease as the output is increased? Can these two be equal at some level of output? Explain. (6) 15. Explain the implications of the following features of perfect competition: (a) large number of buyers and sellers (b) freedom of entry and exit to firms (6) 16. A consumer consumes only two goods. For the consumer to be in equilibrium why must marginal rate of substitution be equal to the ratio of prices of the two goods? Explain. OR A consumer consumes only two goods. Why is the consumer in equilibrium when he buys only that combination of the two goods that is shown at the point of tangency of the budget line with an indifference Explain. The following question is for the blind candidates only in lieu of RCTVŒ_QH_ őQT_ question No.16 Explain when a consumer, consuming only two commodities X and Y, attains equilibrium under the utility approach. (6) (6) 336 Section B 17. Give the meaning of involuntary unemployment. (1)
7 26 5 7 33 6 7 41 (4) 14. Why does the difference between Average Total Cost and Average Variable Cost decrease as the output is increased? Can these two be equal at some level of output? Explain. (6) 15. Explain the implications of the following features of perfect competition: (a) large number of buyers and sellers (b) freedom of entry and exit to firms (6) 16. A consumer consumes only two goods. For the consumer to be in equilibrium why must marginal rate of substitution be equal to the ratio of prices of the two goods? Explain. OR A consumer consumes only two goods. Why is the consumer in equilibrium when he buys only that combination of the two goods that is shown at the point of tangency of the budget line with an indifference Explain. The following question is for the blind candidates only in lieu of őQT_ RCTVŒ_QH_ question No.16 Explain when a consumer, consuming only two commodities X and Y, attains equilibrium under the utility approach. (6) (6) 336 Section B 17. Give the meaning of involuntary unemployment. (1)
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