CSS 2023 Economics Paper I

Discuss the concept of Consumer Equilibrium using the Indifference Curve approach. How does the equilibrium change when there is a change in the price of one commodity, keeping income and other prices constant?

Explain the Cobb-Douglas production function. Discuss its properties, specifically focusing on the returns to scale and the elasticity of substitution.

Compare and contrast the equilibrium of a firm under Perfect Competition and Monopoly in the long run. Use diagrams to illustrate the deadweight loss associated with a monopoly.

Define the IS and LM curves. Derive the equilibrium in the goods market and money market simultaneously. Explain how an expansionary fiscal policy affects the equilibrium level of income and interest rate.

Critically examine the Quantity Theory of Money (Fisher's version). How does the Cambridge version (Cash Balance approach) improve upon the Fisherian equation?

Explain the Harrod-Domar growth model. Discuss the significance of the 'warranted rate of growth' and the 'natural rate of growth'. What are the limitations of this model?

Solve the following optimization problem: Minimize cost C = 2x^2 + xy + y^2 subject to the production constraint x + y = 20. Provide economic interpretation of the Lagrange multiplier.