Micro Economics & Macro Economics Apr 2026 Solved Assignment

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Micro Economics & Macro Economics | Apr 2026 Examination

 

Q1. A metropolitan city is planning to introduce a congestion pricing policy to reduce traffic, pollution, and fuel consumption. However, the policymakers are facing uncertainty regarding its economic impact, public acceptance, and long-term effectiveness. Since reliable historical data is limited and expert opinions vary widely, the government decides to seek inputs from a panel of experts including urban planners, economists, environmental scientists, transport authorities, and sociologists. The goal is to arrive at a well-reasoned consensus without allowing dominant individuals to influence others.

To achieve this, the policymakers adopt a structured forecasting and decision-making method that involves multiple rounds of anonymous expert consultations, controlled feedback, and gradual convergence of opinions. As a management student, explain how the Delphi Technique can be applied in this situation. Discuss the steps involved in the Delphi Technique and evaluate its usefulness in improving the quality of decision-making in complex and uncertain policy environments. (10 Marks)

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Q2. A garment manufacturing company in India produces cotton shirts for both domestic and export markets. Recently, the firm has experienced a rise in raw material prices due to higher cotton procurement costs, an increase in electricity tariffs, and new labour regulations that have raised wage expenses. At the same time, the government has announced tax incentives for exporters, while advancements in automated stitching technology have become available at affordable rates. These changes have created uncertainty regarding the firm’s ability and willingness to supply shirts in the market.

As a business economics student, analyze the above situation by identifying the factors affecting the supply of cotton shirts. Explain how changes in factors influence the supply decision of the firm. Support your answer with appropriate economic reasoning. (10 Marks) 

 

Q3(A).  In the industrial town of Riverdale, several chemical manufacturing units discharge untreated waste into a nearby river to minimise production costs. While the firms benefit from lower expenses, local residents face severe health issues, water contamination, and loss of agricultural productivity. These social costs are not reflected in the market price of the chemicals, leading to overproduction and environmental degradation.

Simultaneously, Riverdale’s health insurance market is facing instability. Insurance companies often lack complete information about the health status of individuals, whereas consumers are typically well aware of their own medical conditions. As a result, people with higher health risks are more likely to purchase insurance, while healthier individuals tend to withdraw from the market. This has caused rising premiums and reduced insurance coverage availability.

Analyze the above situation to identify the presence of market failure. Explain the reasons for market failure highlighted in the scenario with reference to externalities, asymmetric information, and adverse selection. (5 Marks)

Q3(B). In the small hill town of Arunpur, only one company, AquaPure Ltd., supplies drinking water through a pipeline network laid across the town decades ago. Due to high infrastructure costs, government permissions, and ownership of the only water source in the region, no other firm has been able to enter the market. AquaPure Ltd. decides the price of water without consulting consumers and often charges higher prices during the summer months when demand increases. Consumers have no close substitute for piped drinking water and must depend entirely on this single supplier. Based on the above scenario, identify the type of market structure. Analyse the situation and explain its characteristics that are evident in the case. (5 Marks)

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