(a) Given that a firm experiences a linear homogenous production function, comment upon the shape of the Expansion path, both in the long run and in the short run.

(a) Draw a concave Production Possibility curve. What does the downward slope andthe concavity of the curve imply? 

 Differentiate between

(i) Internal Economies and Internal Diseconomies of Scale. 
(ii) Public good and Merit good 

(b) Consider the following Table which gives total cost schedule of a firm. Given that the average fixed cost of producing 2 units of output is Rs. 10. Find the total variable cost, total fixed cost, average variable cost, average fixed cost, short-run average cost, and short-run marginal cost schedules of the firm for the corresponding values of output. 

Explain the Law of diminishing marginal utility. In what case(s) this law may not apply?

(b) Consider a consumer who has to choose between two normal goods A and B. Initially his income is Rs 10, and the per unit price of good A and good B is Rs 2 and Rs 3, respectively. Now, assume income of the consumer increases to Rs 20, the price of good A rises to Rs 3 and that of good B rises to Rs 4.50. What will be the impact of this change on the demand of the two goods?

Discuss the shape of Input-output Isoquants.