| The demand of commodity when measured through the expenditure approach is inelastic. A fall in its price will result in: (Choose the correct alternative) |
| (a) no change in expenditure on it. (b) increase in expenditure on it. |
| (c) decrease in expenditure on it. (d) any one of the above. |
| As we move along a downward sloping straight line demand curve from left to right, price elasticity of demand: (Choose the correct alternative) |
| (a) remain unchanged (b) goes on falling |
| (c) goes on rising (d) falls initially then rises |
| Average revenue and price are always equal under: (choose the correct alternative) |
| (a) perfect competition only (b) monopolistic competition only |
| (c) monopoly only (d) all market forms |
| Show that demand of a commodity is inversely related to its price. Explain with the help of utility analysis. |
| Or |
| Why an indifference curve is negatively sloped? Explain. |
| State different phases of the law of variable proportions on the basis of total product. Use diagram. |
| Or |
| Explain the geometric method of measuring price elasticity of supply. Use diagram. |
| Complete the following table: | ||||
| Output units | Total cost Rs. | Average variable cost Rs. | Marginal cost Rs. | Average fixed cost Rs. |
| 0 | 30 | |||
| 1 | ... | ... | 20 | ... |
| 2 | 68 | ... | ... | ... |
| 3 | 84 | 18 | ... | ... |
| 4 | ... | ... | 18 | ... |
| 5 | 125 | 19 | ... | 6 |
| Good Y is a substitute of good X. The price of Y falls Explain the chain of effects of this change in the market of X. |
| Or |
| Explain the chain of effects of excess supply of a good on its equilibrium price. |
| Given below is the cost schedule of a product produced by a firm. The market price per unit of the product at all levels of output is Rs 12. Using marginal cost and marginal revenue approach, find out the level of equilibrium output. Give reasons for your answer: | ||||||
| Output (Units) | 1 | 2 | 3 | 4 | 5 | 6 |
| Average (Cost) (Rs) | 12 | 11 | 10 | 10 | 10.4 | 11 |
| The ratio of total deposits that a commercial bank has to keep with Reserve Bank of India is called, (choose the correct alternative) |
| (a) Statutory liquidity ratio |
| (b) Deposit ratio |
| (c) Cash reserve ratio |
| (d) Legal reserve ratio |
| Aggregate demand can be increased by: (choose the correct alternative) |
| (a) Increasing bank rate |
| (b) Selling government securities by Reserve Bank of India |
| (c) Increasing cash reserve ratio |
| (d) None of the above |
| Primary deficit indicate the amount of borrowings requinal by the government to meet the expenditure other than trtrest payment. |
| Primary deficit = |
| Fiscal deficit \[\] trterest payment |
| Explain 'banker to the government' function of the central bank. |
| Or |
| Explain the role of reverse repo rate in controlling money supply. |
| An economy is in equilibrium. From the following data about an economy calculate autonomous consumption. |
| (a) Income = 5000 |
| (b) Marginal propensity to save = 0.2 |
| (c) Investment expenditure = 800 |
| Explain 'non-monetary exchanges' as a limitation of using gross domestic product as an index of welfare of a country. |
| Or |
| How will you treat the following while estimating domestic product of a country? Give reasons for your answer: |
| (a) Profits earned by branches of country's bank in other countries |
| (b) Gifts given by an employer to his employees on Independence Day |
| (c) Purchase of goods by foreign tourists |
| Calculate (a) net domestic product at factor cost | ||
| Rs. in crore | ||
| (i) | Private final Consumption Expenditure | 5000 |
| (ii) | Government final Consumption Expenditure | 1000 |
| (iii) | Exports | 70 |
| (iv) | Imports | 120 |
| (v) | Consumption of fixed capital | 60 |
| (vi) | Gross domestic fixed capital formation | 500 |
| (vii) | Change in stock | 100 |
| (viii) | Factor income to abroad | 40 |
| (ix) | Factor income from abroad | 90 |
| (x) | Indirect taxes | 700 |
| (xi) | Subsidies | 50 |
| (xii) | Net current transfer to abroad | (?) 30 |
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