Consider a consumer with the utility function given by U(X, Y) = XY where X and Y represent the two goods of consumption priced at Px and Py, respectively. The income of this consumer is assumed Rs 120, Px = Rs. 3 and Py = Rs.1. Suppose price of good X falls to Rs. 2.50, what will be its impact on consumption quantities of both the goods. 

Make distinction between any three of the followings: 

(i) Weak preference and strong preference
(ii) Numeraire good and non-discrete good
(iii) Homogenous function and Homothetic function
(iv) Compensating variation and Equivalent variation. 

Consider A Firm facing the demand schedule P = 190 – 0.6q and the total cost function
TC = 40 + 30q + 0.4q2
a) What output will maximize profit? 
b) What output will maximize total revenue? 
c) What will the output if the firm makes the profit of Rs. 4,760

A firm faces the Average Fixed Cost function as AFC = 200x-1 and Average Variable Cost function as AVC = 0.2x2 where x represents output. Show diagrammatically what shape will its total cost function (AC) take?

What is the distinction between short run production function and long run production function? Explain with example and diagram the various stages of total product associated with law of variable proportions.

Make distinction between any three of the followings: 
(i) Weak preference and strong preference
(ii) Numeraire good and non-discrete good
(iii) Homogenous function and Homothetic function
(iv) Compensating variation and Equivalent variation. 

‘The second fundamental theorem of welfare economics treats the concepts of efficiency and equity differently’. Explain.