| Any statement about demand for a good is considered complete only when the following is/are mentioned in it (Choose the correct alternative): |
| (a) Price of the good (b) Quantity of the good |
| (c) Period of time (d) All of the above |
| Demand for a good is termed inelastic through the expenditure approach when if (Choose the correct alternative) |
| (a) Price of the good falls, expenditure on it rises |
| (b) Price of the good falls, expenditure on it falls |
| (c) Price of the good falls, expenditure on it remains un-changed |
| (d) Price of the good rises, expenditure on it falls |
| A seller cannot influence the market price under (Choose the correct alternative) |
| (a) Perfect competition (b) Monopoly |
| (c) Monopolistic competition (d) All of the above |
| Distinguish between 'increase in demand' and 'increase in quantity demanded' of a good. |
| Or |
| Explain the meaning of 'Budget set' and 'Budget line'. |
| Define market supply. Explain the factor 'input prices' that can cause a change in supply. |
| Or |
| Give the behaviour of marginal product and total product as more and more units of only one input are employed while keeping other inputs as constant. |
| Complete the following table: | ||||
| Output (Units) | Average Fixed Cost (Rs) | Marginal Cost (Rs) | Average Variable Cost (Rs) | Average Cost (Rs) |
| 1 | 60 | 20 | - | - |
| 2 | - | - | 19 | - |
| 3 | 20 | - | 18 | - |
| 4 | - | 18 | - | - |
| 5 | 12 | - | - | 31 |
| From the following total cost and total revenue schedule of a firm, find out the level of output, using marginal cost and marginal revenue approach, at which the firm would be in equilibrium. Give reasons for your answer. | ||
| Output (units) | Total Revenue (Rs.) | Total Cost (Rs.) |
| 1 | 10 | 8 |
| 2 | 18 | 15 |
| 3 | 24 | 21 |
| 4 | 28 | 25 |
| 5 | 30 | 33 |
| Distinguish between perfect oligopoly and Imperfect oligopoly. Also explain the "interdependence between the firms" feature of oligopoly. |
| Or |
| Explain the meaning of excess demand and excess supply with the help of a schedule. Explain their effect on equilibrium price. |
| Demand deposits include (Choose the correct alternative) |
| (a) Saving account deposits and fixed deposits |
| (b) Saving account deposits and current account deposits |
| (c) Current account deposits and fixed deposits |
| (d) All types of deposits |
| If the marginal propensity to consume is greater than marginal propensity to save, the value of the multiplier will be (Choose the correct alternative) |
| (a) greater than 2 (b) less than 2 |
| (c) equal to 2 (d) equal to 5 |
| Explain the 'bankers' bank' function of the central bank. |
| Or |
| Explain the process of credit creation by commercial banks. |
| An economy is in equilibrium. From the following data, calculate the marginal propensity to save: |
| (a) Income = 10,000 |
| (b) Autonomous consumption = 500 |
| (c) Consumption expenditure = 8,000 |
| Explain the precautions that should be taken while estimating national income by expenditure method. |
| Or |
| Will the following be included in the domestic product of India? Give reasons for your answer. |
| (a) Profits earned by foreign companies in India. |
| (b) Salaries of Indians working in the Russian Embassy in India. |
| (c) Profits earned by a branch of State Bank of India in Japan. |
| Calculate National Income | ||
| (Rs) in crores | ||
| (i) | Compensation of empolyees | 2,000 |
| (ii) | Rent | 400 |
| (iii) | Profit | 900 |
| (iv) | Dividend | 100 |
| (v) | Interest | 500 |
| (vi) | Mixed income of self-employed | 7,500 |
| (vii) | Net factor income to abroad | 50 |
| (viii) | Net exports | 60 |
| (ix) | Net indirect taxes | 300 |
| (x) | Depreciation | 150 |
| (xi) | Net current transfers to abroad | 30 |
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