MEC-101 IGNOU Solved Assignment 2026-27

MEC-101 Solved Assignment: Microeconomic Analysis (MA Economics Block-1 to Block-8)

The following is a verified Tutor Marked Assignment (TMA) solution for Microeconomic Analysis (MEC-101), covering core blocks from the IGNOU MA Economics curriculum. Solutions are structured to meet 30% course weightage requirements with plagiarism-free references and university-compliant word limits (500/250/100 words).

Key Syllabus Blocks Covered:

• Block-1: Consumer Behaviour
  • Indifference curve analysis with budget constraints (Hicksian/Lancasterian utility functions).
  • Derivation of demand curves using Marshallian and Hicksian compensating variations.
  • Slutsky equation and substitution/income effects (numerical examples with Cobb-Douglas preferences).
• Block-3: Price and Output Determination
  • Monopolistic competition with zero economic profit in long-run equilibrium.
  • Oligopoly models: Cartel stability analysis (Stackelberg vs. Cournot).
  • Game theory applications: Prisoner’s Dilemma and Nash equilibrium payoff matrices.
• Block-5: Welfare Economics
  • Pareto efficiency vs. Kaldor-Hicks efficiency with compensating surplus analysis.
  • Deadweight loss calculations in tax incidence scenarios (Vogt diagram).
  • Social welfare functions and utilitarianism vs. Rawlsian maximin criteria.
• Block-7 & Block-8: Non-Cooperative Game Theory
  • Mixed strategy Nash equilibria (e.g., Battle of the Sexes game).
  • Backward induction in sequential games (e.g., Entry Deterrence model).
  • Application of Shapley value in cooperative game theory (labor division problems).

Sample Solution Structure (Word Limit Compliance):

Question 1 (500 words): Explain the revealed preference theory and derive the demand function for a consumer with Cobb-Douglas utility ( U(x,y) = x^{0.5}y^{0.5} ), given income ( M = 100 ) and prices ( p_x = 2 ), ( p_y = 1 ). Solution: 1. Maximize utility subject to budget constraint using Lagrange multipliers. 2. Solve for Marshallian demand ( x^(M,p_x,p_y) ) and ( y^(M,p_x,p_y) ). 3. Verify Warner’s axioms (weak, strong, and transitivity) for consistency.

Subject-Specific FAQs:

Q1: How do I handle Block-4 (General Equilibrium) questions with multiple markets? A: Use the Edgeworth Box to analyze exchange equilibrium for two consumers/traders. Solve for core allocations and compare with Walrasian equilibrium conditions (existence via Axiom of Choice). Q2: Are Block-6 (Economics of Uncertainty) solutions different for expected utility vs. prospect theory? A: Yes. Expected utility assumes rational choice (von Neumann-Morgenstern axioms), while prospect theory models loss aversion (Kahneman-Tversky). Use probability weighting functions for prospect theory solutions.

Submission Guidelines:

• Digital PDF format with IGNOU-provided cover page (current session).
• Strict adherence to word limits (e.g., 500 words for long-answer questions).
• Deadline: Submit via eGyankosh by the last date announced in the study material (typically 31st March/30th September).