Discuss the major drawbacks and failures of the free market economy?
What are the reasons for failures of the market system in providing an efficient solution to the basic problems?
Why does government intervention in free market economy become often inevitable?
What roles does the government play in a free market economy?
How is government role different in free market economies from that in controlled economies?
Define market demand.
What are the determinants of market demand in the short run and in the long run?
How do increase in consumers’ income and price of the substitute goods affect the demand for a commodity.
What are the factors that are held constant while deriving an individual demand curve? What will happen when such factors are not held constant?
From the demand function Q = 600/P, show that the total expenditure on the commodity remains unchanged as price falls. Estimate elasticity of demand along the demand curve at P = Rs 4 and P = Rs 2.
Explain the law of supply through a supply schedule and a supply curve. Why does a supply curve slope upward to the right? What factors cause a rightward shift in the supply curve?
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