| Explain how technological progress is a determinant of supply of a good by a firm. |
| Or |
| Explain how input prices are a determinant of supply of a good by a firm. |
| A consumer consumes only two goods X and Y and is in equilibrium. Show that when the price of good X rises, the consumer buys less of good X. Use utility analysis. |
| Or |
| Given the price of a good, how will a consumer decide as to how much quantity of that good to buy? Use utility analysis. |
| Explain why is an indifference curve (a) downward sloping and (b) convex. |
| Or |
| Explain the concept of 'Marginal Rate of Substitution' with the help of a numerical example. Also explain its behavior along an indifference curve. |
| From the following information about a firm, find the firm's equilibrium output in terms of marginal cost and marginal revenue. Give reasons. Also find profit at this output. | ||
| Output (units) | Total Revenue (Rs.) | Total Cost (Rs.) |
| 1 | 6 | 7 |
| 2 | 12 | 13 |
| 3 | 18 | 17 |
| 4 | 24 | 23 |
| 5 | 30 | 31 |
| Is the following a revenue receipt or a capital receipt in the context of government budget and why? |
| (i) Tax receipts |
| (ii) Disinvestment |
| Explain 'Banker to the Government' function of the central bank. |
| Or |
| Explain 'Bankers' Bank? function of the central bank. |
| Calculate Marginal Propensity to Consume from the following data about an economy which is in equilibrium: |
| National income = 2000 |
| Autonomous consumption expenditure = 200 |
| Investment expenditure = 100 |
| Calculate 'Net National Product at Factor Cost' from the following? | ||
| (Rs. in Arab) | ||
| (i) | Social security contributions by employees | 90 |
| (ii) | Wages and salaries | 800 |
| (iii) | Net current transfers to abroad | (-) 30 |
| (iv) | Rent and royalty | 300 |
| (v) | Net factor income to abroad | 50 |
| (vi) | Social security contributions by employees | 100 |
| (vii) | Profit | 500 |
| (viii) | Interest | 400 |
| (ix) | Consumption of fixed capital | 200 |
| (x) | Net indirect tax | 250 |
| How should the following be treated in estimating national income of a country? You must give reasons for your answer. |
| (i) Taking care of aged parents |
| (ii) Payment of corporate tax |
| (iii) Expenditure on providing police services by the government |
| When is an economy in equilibrium? Explain with the help of saving and Investment functions. Also explain the changes that take place in an economy when the economy is not in equilibrium. Use diagram. |
| Or |
| Outline the steps required to be taken in deriving the Consumption Curve from the given Saving Curve. Use diagram. |
| Note: The following question is for the Blind Candidates only in lieu of Q.No.32. |
| Define investment. Explain national income equilibrium through saving and investment function. Also explain the changes that takes place in an economy when the economy is not in equilibrium. |
| Or |
| What is Consumption Function? How can it be derived from the Saving Function? Explain. |
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