Briefly discuss the causes of economic problem. |
Or |
Diagrammatically illustrate the impact of import substitution policy on the Production Possibility Curve (PPC) of India. |
Consumption (units) | Total Utility (utils) | Marginal Utility (utils) |
1 | 10 | 10 |
2 | 18 | 8 |
3 | 25 | 7 |
4 | 31 | 6 |
5 | 34 | 3 |
6 | 34 | 0 |
(i) Nature of inputs used |
(ii) Technique of production |
(i) Large number of buyers and sellers, |
(ii) Freedom of entry and exit of the firm. |
What is meant by price elasticity of demand? Explain briefly any five factors affecting elasticity of demand. |
or |
Why is a consumer in equilibrium, only at the point of tangency of the budget line with an indifference curve? |
(i) When Marginal Revenue (MR) is constant and not equal to zero, then Total Revenue (TR) will also be constant. |
(ii) As soon as Marginal Cost (MC) starts rising. Average Variable Cost (AVC) also starts rising. |
(iii) Marginal Product (MP) starts diminishing from the point of inflexion. |
S.No. | Items | (Rs.) in crores |
(i) | Net Domestic Capital Formation | 500 |
(ii) | Compensation of Employees | 1,850 |
(iii) | Consumption of Fixed Capital | 100 |
(iv) | Government Final Consumption Expenditure | 1,100 |
(v) | Private Final Consumption Expenditure | 2,600 |
(vi) | Rent | 400 |
(vii) | Dividend | 200 |
(viii) | Interest | 500 |
(ix) | Net Exports | \[(-)\]100 |
(x) | Profits | 1,100 |
(xi) | Net Factor Income from Abroad | \[(-)\]50 |
(xii) | Net Indirect Taxes | 250 |
Given below is the Consumption Function in an economy. \[C=200+Y\] With the help of a numerical example, show that in this economy, as income increases Average Propensity to Consume (APC) will decrease. |
or |
The savings function of an economy is\[S=200+Y\]. The economy is in equilibrium when income is equal to Rs. 2,000. Calculate |
(i) Investment Expenditure at Equilibrium Level of Income (I) |
(ii) Autonomous Consumption\[(\overline{C})\] |
(iii) Investment Multiplier (K) |
(i) Other things remaining constant, explain the impact of rise in foreign currency on national income. |
(ii) Give any three points of difference between depreciation of currency and devaluation of currency. |
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