-Question 1 & 13 very short answer questions. Their each part is of 1 mark and required to be answered in one sentence.
-Q.2-5 and Q14-17 are short answer questions. Each is of 3 marks. Answer to them should not normally exceed 60 words.
-Q.6-9 and 18-21 are also short answer questions. Each is of 4 marks. Answer to them should not normally exceed 70 words.
-Q.10-12 and Q22-24 are Long answer questions. Each is of 6 marks. Answer to them should not normally exceed 100 words.
-Answers should be brief and to the point and above word limits be adhered to as for as possible.
- All parts of question should be answered at one place.
Section � A[INTRODUCTORY MICROECONOMIC THEORY]
1.Answer following questions.
iState the characteristics of Perfectly Competitive Market.
iiDefine Supply.
iiiDefine Total revenue.
ivWhat is the elasticity of supply curve passing through the origin and making angle of 60o with origin.
2. When a good called (1) Normal Good (2) Inferior Good.
3. State any three causes of decrease in supply of a commodity.
4. State three main features of Monopolistic Competition.
5. What is the relationship between Average cost and Marginal Cost..
6. At a price of Rs.40 per unit, the quantity supplied of a commodity is 400 units. When its price falls by 10%. Quantity supplied falls by 36 units. Calculate the elasticity of supply. Is its supply elastic? Give reasons for your answer.
7. Define Price elasticity of demand.
OR
Distinguish between 'Change in demand' and 'Change in quantity demanded'. Use diagram.
8. Explain the problem of 'For whom to produce' with the help of an example.
9. The fixed cost of a firm is Rs.120. Its Mc at different levels of output is given below. Compute TVC, AVC, TC and ATC at each level of output.
Output (in units)
1
2
3
4
MC(Rs.)
60
52
56
64
10. How many units of a commodity should a consumer buy to get maximum utility from it? Explain with the help of numerical example.
11. Explain the 'law of variable proportion' with the help of total and marginal physical product schedule.
12. How will the decrease in the demand of a commodity affect the equilibrium price and equilibrium quantity? Use diagram.
Section �B[INTRODUCTORY MACROECONOMIC THEORY]
13.Answer following questions.
i. Is the study of general price level is a macroeconomic study?
ii. What is meant by macro-economics?
iii. Give two examples of non tax revenue. Define Tax.
iv. What is balance of payment?
14. Explain the meaning of deflationary gap with the help of diagram.
15. From the following data of firm X. Calculate gross value added at factor cost.
(Rs. in thousands.)
Sales
350
Opening Stock
30
Closing Stock
20
Purchase of Machinery
150
Purchase of intermediate Products
170
Subsidy
40
Depreciation
35
16. Complete the following table
Income(Rs)
Consumption Expenditure
MPC
MPS
800
750
1000
930
1200
1100
1400
1260
17. State any three objectives of Government Budget. Explain any one.
18.Briefly explain how central bank can control credit creation by commercial banks by changing bank rate.
19. Explain how the foreign exchange rate determined in a foreign capital market.
OR
Distinguish between current A/c and Capital A/c of balance of payment A/c. Mention two items of each of these A/cs.
20. State the four functions of money. Explain any one of them.
21. Drive a saving curve from hypothetical propensity to consume curve. Write steps also.
22. If in an economy planed savings are less than planed investment, what changes will take place in the economy that will bring about equality between the two?
OR
Explain the working of investment multiplier with the help of a numerical example.
23. Explain Income method of estimating domestic factor income. Also explain any three precautions that should be taken while using this method.
