SECTION A Q. 1. Answer the following questions: a) Define market supply.

. b) What is meant by producers equilibrium c) Define marginal physical product d) Define equilibrium price. 4x1 Q. 2. State any three causer of a rig shift of demand curve of a commodity. 3 Q. 3. State the geometric method of measuring price elasticity of supply (In case of straight supply curve). 3 Q. 4. What is the relation between marginal cost and average variable coat? 3 Q. 5. State three main features of perfect competition. 3 Q. 6. Complete the following table:

Output (Units) 1 2 3 4

Price (Rs.) 12 10 8 6

Total Revenue __ __ __ __

Margial Revenue (Rs.) __ __ __ __

Q. 7. Distinguish between change in supply and change in quantity supplied of a commodity. (Use diagrams) 4 Or Explain any two determinants of supply of a commodity. Q. 8. Explain the problem of what to produce with the help of an example. 4 Q. 9. The quantity demanded of a commodity at a price of Rs. 8 per unit is 600 units. Its price falls by 25 per cent and quantity demanded rises by 120 units. Calculate its price elasticity of demand. Is its demand elastic? Give reason for your answer. 4 Q. 10. Explain consumers equilibrium, in case of a single commodity, with the help of a utility schedule. 6 Or How is the demand of a commodity affected by changes in the price of related goods? Explain with the help of diagrams. Q. 11. Explain the law of variable proportion with the help of total and marginal physical product curves. 6

Q. 12. How does an increase in demand of a commodity affect its equilibrium price and equilibrium quantity? Explain with the help of a diagram.6 SECTION B Q. 13. Answer the following questions: a) Why is repayment of loan a capital expenditure? b) Define macroeconomics. c) What is meant by balance of trade? d) Give two examples of microeconomic studies. 4x1 Q. 14. From the following data about firm X, calculate gross value added at factor cost by it: 3 Rs. (in thousand) 500 30 20 300 150 40

(i) Sales (ii) Opening stock (iii) Closing stock (iv) Purchase of intermediate produce (v) Purchase of machinery (vi) Subsidy Q. 15. Explain the meaning of deflationary gap with the help of a diagram. 3 Q. 16. What is meant by revenue deficit? What are its implications? 3 Q. 17. Complete the following table: 3 Leval of income (Rs.) 400 500 600 700 Consumption expenditure 240 320 395 465 Marginal Propensity to consumer __ __ __ __

Marginal Propensity to save __ __ __ __

Q. 18. State the main functions of a central bank. 4 Q. 19. What is meant by visible and invisible Items in the Balance of Payments acc- ount? Give two examples of invisible items. 4 Or What is meant by foreign exchange rate? Give three reasons why people de- sire to have foreign exchange. Q. 20. Explain any two functions of a commercial bank. 4

Q. 21. Distinguish between: a) Revenue receipts and capital receipts. b) Direct tax and Indirect tax. Q. 22. From the following data, calculate: 3, 3 (a) Personal disposable income and (b) National income Rs. a) Private income b) Compensation of employees c) Mixed income of self employed d) Net factor income from abroad e) Net retained earnings of private enterprises f) Rent g) Profit h) Consumption of fixed capital i) Direct taxes paid by households j) Corporate tax k) Net indirect taxes l) Net exports m) Interest (in come) 3,000 800 900 (-)50 600 350 600 200 300 350 250 (-)70 450 Q. 23. Explain the working of investment multiplier with the help of a numerical exa- mple. 6 Or In an economy planned savings exceed planned investment. How will the equality between the two be achieved? Explain. Q.24. Distinguish between the following giving suitable examples in support of your answer: (a) Domestic product and national product (b) Intermediate product and final product 3

----------------------------------------------XXXXXXXXXXXXXXXXXXXXX------------------------------------------------------------------------------------------------------XXXXXXXXXXXXXXXXXXXXX--------------------------------------------------------SECTION - A Q. 1. Answer the following questions: 1X4 (a) Define production function. (b) What is meant by producer's equilibrium?

(c) What causes an upward movement along a supply curve? (d) Under which market form, is a firm a price-taker? Q. 2. Explain the law of demand with the help of a demand schedule. 3 Q. 3. Give three causes of an increase in the supply of a commodity. 3 Q. 4. What is the relationship between marginal revenue and average revenue? 3 Q. 5. State the main features of a monopoly market. 3 Q. 6. Complete the following table: Output (Units) 0 1 2 3 4 Total Cost (Rs.) 80 180 270 350 440 AVC Revenue Marginal Cost (Rs.) -

Q. 7. At a price of Rs. 50 per unit, the quantity demanded of a commodity is 1000 units. When its price falls by 10 per cent, its quantity demanded rises to 1080 units. Calculate its price elasticity of demand. Is its demand inelastic? Give reasons for your answer. 4 Q. 8. Define price elasticity of supply. How is it measured by geometric method? (In case of a straight line supply curve) 4 Q. 9. Explain the problem of 'how to produce' with the help of an example. 4 Or Explain the problem of 'what to produce' with the help of a production possib- ility curve. Q. 10. How does a consumer reach equilibrium position when he is buying only one commodity? Explain with the help of marginal utility schedule. 6 Or Briefly explain any three factors that shift the demand curve to the right. Q. 11. Distinguish between returns to a factor and returns to scale. Explain the reas- ons for increasing returns to a factor. 6 Q. 12. How does an increase in supply of a commodity affect its equilibrium price and equilibrium quantity? Explain with the help of a diagram. 6

SECTION - B Q. 13. Answer the following questions: 1X4 (i) Define micro-economics. (ii) Give two examples of macro-economic studies. (iii) Why are borrowings treated as capital receipts? (iv) What is meant by balance of payments account? Q. 14. Explain the meaning of equilibrium level of national income, with the help of a diagram. 3 Q. 15. From the following data about a firm 'A', calculate net value added at market price by it: 3 Rs. (in thousands) (i) Sales (ii)Change in stock (iii) Depreciation (iv) Net indirect taxes (v)Purchase of machinery (vi)Purchase of intermediate products 700 40 80 100 250 400

Q. 16. What is the basis of classifying government expenditure into revenue expen- diture and capital expenditure? Give an example of each. 3 Q. 17. Complete the following table: 3 Consumption Expenditure (Rs.) 900 1,060 1,210 1,350 Marginal Propensity to Consume Marginal Propensity to save

Income (Rs.) 1,000 1,200 1,400 1,600

Q. 18. State any three main functions of a central bank. Describe any one of them. 4 Q. 19. Explain the meaning and implications of fiscal deficit. 4 Q. 20. List four items each of current account and capital account of the balance of payments account. 4 Or Mention four sources each of demand and supply of foreign exchange.

Q. 21. Briefly explain any four main functions of a commercial bank. 4 Q. 22. Explain briefly the distinction between: 6 (a) Gross domestic product at factor cost and Net national product at market price (b) National income and Net national disposable income. Q. 23. Explain with the help of a numerical example how an increase in investment in an economy affects its level of income. 6 Or Why should planned savings and planned investment be equal at equilibrium level of income? Explain with the help of a diagram. Q. 24. From the following data, calculate (a) National income, and (b) Personal disposable income. Rs. (in crores) 1,200 400 800 300 1,000 3,600 (-) 50 200 250 350 (-) 60 150 100

(i) Compensation of employees (ii) Rent (iii) Profit (iv) Consumption of fixed capital (v) Mixed income of self-employed (vi) Private income (vii) Net factor income from abroad (viii) Net retained earnings of private enterprises (ix) Interest (x) Net indirect taxes 350 (xi) Net exports (xii) Direct taxes paid by households (xiii) Corporate tax

----------------------------------------------XXXXXXXXXXXXXXXXXXXXX------------------------------------------------------------------------------------------------------XXXXXXXXXXXXXXXXXXXXX--------------------------------------------------------SECTION - A Q. 1. Answer the following questions: 1x4

a) State any two causes of an economic problem. b) Define demand schedule. c) What is equilibrium price? d) Draw average revenue curve of a firm under perfect competition. Q. 2. Explain the central problem of for whom to produce. 3 Q. 3. Define utility. Describe the law of diminishing marginal utility. 3 Q. 4. Price elasticity of demand of a good is (-)2. 40 units of this good are bought at a price of Rs. 10 per unit. How many units will be bought at a price of Rs. 11 per unit? Calculate. 3 Q. 5. Explain the effect of technological changes on the supply of a product. 3 Q. 6. Define marginal revenue. State the relation between total revenue and Margi- nal revenue. 4 Q. 7. Calculate total variable cost and marginal cost at each given level of output from the following table: 4

Output (units) Total Cost (Rs.)

0 40

1 60

2 78

3 97

4 124

Q. 8. Explain the feature large number of buyers and sellers of a perfectly compe - titive market. 4 Or Explain the feature differentiated products of a market with monopolistic competition. Q. 9. Explain the chain of effects on demand, supply and price of a commodity caused by a leftward shift of its demand curve. Use diagram. 6 Q. 10. Explain the law of demand and the reasons behind it. Use diagram. 6 Q. 11. All the inputs, used in production of a good, are increased in the same prop- ortion. What are its possible effects on total physical product? Explain by using numerical examples. 6 Or Explain the Law of Variable Proportions and the reasons behind it. Q. 12. Distinguish between fixed cost and variable cost and give one example of each. Draw Average Total Cost, Average Variable Cost and Marginal Cost Curves in a single diagram. 3, 3 SECTION - B Q. 13. Answer the following questions: 1X4

a) Define macroeconomics. b) Give one example showing the difference between micro- economics and macroeconomics. c) What is a government budget? d) A countrys balance of trade is Rs. 100 ct-ores and value of export of goods is Rs. 175 crores. Find out value of import of goods. Q. 14. Calculate Gross Value Added at Factor Cost from the following data: 3 (Rs. lakhs) (i) Consumption of fixed capital (ii) Sales (iii) Subsidies (iv) Closing stock (v) Purchases of raw materials (vi) Opening stock (vii) Indirect taxes Q. 15. State the meaning and components of aggregate demand. 3 Q. 16. As a result of increase in investment by Rs. 20 crores, national income rises by Rs. 100 crores Find out Marginal Propensity to Consume.3 Q. 17. Distinguish between revenue receipts and capital receipts in a government budget. Give one example of each. 3 Q. 18. Explain the medium of exchange function of money. 4 Or Explain the measure of value function of money. Q. 19. Explain the acceptance of deposits function of commercial banks. 4 Q. 20. Explain the concept of revenue deficit in a government budget. What does this deficit indicate? 4 Q. 21. State two sources of demand and two sources of supply of foreign exchange.4 Q. 22. Differentiate between factor payment and transfer payment. Explain briefly the concept of mixed income of self-employed. 3+3 Q. 23. Calculate (i) Net Domestic Product at Factor Cost, and (ii) Personal Income from the following data: 3+3 (Rs. crores) a) Private final consumption expenditure b) Savings of non-departmental enterprises c) Net domestic fixed capital formation d) Undistributed profits e) Change in stock 5 100 2 10 50 15 10

700 20 100 5

f) Corporation tax g) Net exports h) Income from property and entrepreneurship accruing to the government administrative departments i) National debt interest j) Government final consumption expenditure 150 k) Current transfers from government l) Net factor income from abroad m) Net current transfers from the rest of the world n) Net indirect taxes o) Personal taxes

10 35 40

30 40 150 25 (-) 10 10 60 35

Q. 24. Explain and graphically represent the concept of deflationary gap. Explain any one-measure of removing this gap. 4+2 Or Explain and graphically represent the concept of inflationary gap. Explain any one measure of removing this gap.

----------------------------------------------XXXXXXXXXXXXXXXXXXXXX------------------------------------------------------------------------------------------------------XXXXXXXXXXXXXXXXXXXXX--------------------------------------------------------SECTION - A (Introductory Micro Economic Theory) Q. 1. Answer the following questions: 4 (i) What gives rise to the central problems of an economy? (ii) Define Monopoly. (iii) Is consumer willing to move away from consumers equilibrium point? (iv) Define producers equilibrium. Q. 2. Distinguish between expansion of supply and increase in supply. 3 Q. 3. Define monopolistic competition. State two of its basic features. 3 Q. 4. At a price of Rs. 20 per unit, quantity demanded of a commodity is 300 units. If its price falls by 10 per cent, its quantity demanded rises by 60 units. Calculate its price elasticity of demand. 3 Q. 5. What is consumers equilibrium? State the condition of consumers equilibrium. Q. 6. How do change in the income of a household affect the demand for the commodity that it buys? Or Explain the law of supply with the help of a schedule. 4 Q. 7. Explain the problem of How to produce with the help of an exam ple. 4

Q. 8. How is elasticity of supply measured? Draw a supply curve for each of the following situations: (i) Elasticity of supply =0 (ii) Elasticity of supply = (iii) Elasticity of supply < 14 Q. 9. Changes in both demand and supply of a commodity may or may not affect its equilibrium price. Explain. 4 Q. 10. Explain the relationship between average cost and marginal cost with the help of a diagram. Or Explain the relationship between total revenue and marginal revenue with the help of a diagram. 6 Q. 11. (i) Which feature/features of monopolistic competition is/are competitive in nature? 3 (ii) Complete the following table: 3 Units of Output 0 1 2 TC (Rs.) 100 120 130 TFC (Rs.) TVC (Rs.) MC (Rs.)

Q. 12. Explain the law o. variable proportions with the help of a diagram. 6 SECTION - B (Introductory Micro Economic Theory) Q. 1. Answer the following questions: 4 (i) Define economic goods. (ii) Define domestic factor income. (iii) If marginal propensity to save is 0.1, calculate the value of the multiplier. (iv) Give two examples of capital expenditure in the government budget. Q. 14. Classify the following into factor income and transfer receipt. Give reasons for your answer: 3 Q. 15. Explain the three industrial sectors into which all the producing enterprises are classified for measuring national income. Q. 16. What is meant by circular flow of income. Distinguish between Real Flow and Money Flow. 3 Q. 17. When will these be a situation of excess demand in an economy? State two measures to correct it. 3 Q. 18. From the following data about a firm P for the year 1998 -99, calculate net value added at factor cost during that year: 4

(Rs. in lakhs) (i) Sales (ii) Purchase of machinery 120 60

(iii) Subsidies (iv) Depreciation (v) Purchase of raw material (vi) Opening stock (vii) Closing stock (viii) Intermediate consumption

5 15 30 20 10 50

Q. 19. Define net factor income from abroad. State it components. 4 Q. 20. Explain the concept of inflationary gap. Use diagram. 4 Q. 21. Explain in brief, the steps involved in the estimation of value added by a firm.4 Q. 22. State any four precautions that must be taken while estimating expenditure on gross domestic product. Why are exports included in estimating expenditure on gross domestic product? Or Describe the income method of estimating national income. 6 Q. 23. Distinguish between average propensity to consume and marginal propensity to consume. Draw a hypothetical propensity to consume curve and from it draw the propensity to save curve. 6 Q. 24. From the following data, calculate gross national product at market price by (a) income method, and (b) expenditure method: 3, 3

(Rs. in crores) (i) Private final consumption expenditure (ii) Compensation of employees (iii) Factor income form abroad (iv) Factor income to abroad (v) Net domestic capital formation (vi) Change in stock (vii) Employers contribution to social security schemes (viii) Dividends (ix) Corporation Tax (x) Consumption of fixed capital (xi) Interest (xii) Exports (xiii) Imports (xiv) Indirect taxes (xv) Undistributed profits (xvi) Subsidies (xvii) Government final consumption expenditure (xviii) Rent 450 300 20 30 100 30 25 100 40 30 80 25 35 65 60 15 160 70

----------------------------------------------XXXXXXXXXXXXXXXXXXXXX------------------------------------------------------------------------------------------------------XXXXXXXXXXXXXXXXXXXXX--------------------------------------------------------SECTION - A Q. 1. Answer the following questions: 1x4 a. b. c. d. What causes a downward movement along a supply curve of a commodity? Why does the problem of choice arise? Under which market form, a firm is a price-taker? Define fixed cost.

Q. 2. Explain the meanings of normal goods and inferior goods. 3 Q. 3. State three main features of a monopoly market. Describe any one. 3 Q. 4. At a price of Rs 8 per unit, the quantity supplied of a cornmodity is 200 units. Its price elasticity of supply is 1.5. If its price rises to Rs. 10 per unit, calculate its quantity supplied at the new price. 3 Q. 5. What does a pro possibility curve show? When will it shift to the right? 3 Q. 6. Define mark supply of a good. Give three causes of a right- ward shift of supply curve. 4 Q. 7. Explain the expenditure method of measuring price elasticity of demand of a commodity. When is the demand said to be inelastic? 4 Q. 8. From the following table, calculate average -variable cost of each given level of output: Output (units) Marginal cost (Rs.) 1 40 2 30 3 35 4 39

Q. 9. Explain the relationship between total revenue and marginal revenue with the help of a revenue schedule. 4 Or What is meant by returns to a factor? What leads to increasing returns to a factor? Explain. Q. 10. Explain with the help of diagrams the effect of the following changes on the demand of a commodity: 6 (a) A fall in the price of substitute good. (b) A fall in the income of its buyer. Q. 11. Explain the meaning of increasing returns to scale and decreasing returns to scale with the help of a total physical product schedule. 6 Q. 12. If at a given price of a commodity, there is excess demand, how will the equilibrium price be reached? Explain with the help of a diagram.6 Or

Explain with the help of a diagram the effect of a rightward shift of supply curve of a commodity on its equilibrium price and quantity SECTION - B Q. 13. Answer the following questions: 1x4 a. b. c. d. Is the study of cotton textile industry a macro-economic study or a micro-economic study? What is meant by foreign exchange rate? Give two examples of macro-economic studies. A government budget shows a primary deficit of Rs. 4,400 crores. The revenue expenditure on interest, payment is Rs. 400 crores. How much is the fiscal deficit?

Q. 14. Calculate Gross National Disposable Income from the following data: 3

Rs. (Crores) (a) National income (b) Net current transfers from rest of the world (c) Consumption of fixed capital (d) Net factor income from abroad (e) Net indirect taxes 2,000 200 100 (-) 50 250

Q. 15. Distinguish between average propensity to consume and marginal propensity to consume. The value of which of these two can be greater than one and when? 3 Q. 16. What is a government budget? Name two sources each of non-tax revenue receipts and capital receipts. 3 Q. 17. In an economy marginal propensity to consume is 0.75. If investment expenditure is increased by Rs. 500 crores, calculate the total increase in income and consumption expenditures. 3 Q. 18. What is the basis of classifying government expenditure into 4 (i) revenue expenditure and capital expenditure? (ii) plan expenditure and non-plan expenditure? Q. 19. Explain the effect of an increase in Bank Rate on credit creation by commercial banks. 4 Q. 20. State four sources each of demand and supply of foreign exchange. Or State any four items each of current account and capital account of the balance of payments account. Q. 21. Briefly explain any two functions of money. 4 Q. 22. Will the following be a part of domestic factor income of India ? Give reasons for your answer. 6 (a) Old age pension given by the Government. (b) Factor income from abroad.

(c) Salaries to Indian residents working in Russian Embassy in India. (d) Profits earned by a company in India , which is owned by a non-resident. Q. 23. Explain the equilibrium level of income with the help of saving and investment curves. If savings exceed planned investment, what changes will bring about the equality between them? 6 Or Distinguish between inflationary gap and deflationary gap. Show deflationary gap on a diagram Can this gap exist at equilibrium level of income? Explain. Q. 24. From the following data, calculate Gross National Product At Market Price by (i) income method, and (ii) expenditure method: 3, 3

Rs. (Crores) 400 (i) Mixed income of self employed (ii) Compensation of employees (iii) Private final consumption expenditure (iv) Net factor income from abroad (v) Net indirect taxes (vi) Consumption of fixed capital (vii) Net domestic capital formation (viii) Net exports (ix) Profits (x) Interest (xii) Government final consumption expenditure 500 900 (-) 20 100 120 280 (-) 30 350 100 150 450

----------------------------------------------XXXXXXXXXXXXXXXXXXXXX------------------------------------------------------------------------------------------------------XXXXXXXXXXXXXXXXXXXXX--------------------------------------------------------SECTION A Q. 1. Answer the following questions: 1x4 (i) What is meant by price elasticity of demand? (ii) In which market form are the products homogeneous? (iii) Define marginal revenue. (iv) State the law of supply. Q. 2. Mention any three factors that affect the price elasticity of demand of a commodity. 3 Q. 3. Distinguish between change in demand and change in quantity demanded of a c ommodity. 3 Q. 4. List any three determinants of supply of a commodity. 3 Q. 5. State any three main features of monopolistic competition. Describe any one. 3 Q. 6. The quantity supplied of a commodity at a price of Rs. 8 per unit is 400 units. Its price elasticity of supply is 2. Calculate the price at which its quantity supplied will be 600 units. 4

Q. 7. Complete the following table: 4 Output (unit) 1 2 3 4 Price (Rs.) 7 6 4 2 Total Revenue (Rs.) Margial Revenue (Rs.)

Q. 8. Explain the relationship between marginal cost and average cost with the help of a cost schedule. 4 Or Distinguish between fixed costs and variable costs. Give two examples of each. Q. 9. What are the three central problems of an economy? Why do they arise? 4 Q. 10. Explain with the help of diagrams the effect of the following changes on the demand of a commodity: 6 (i) A fall in the price of complementary good (ii) A rise in the income of its buyer Q. 11. Explain the law of variable proportions with the help of total product and marginal product curves. 6 Q. 12. If at a given price of a commodity there is, excess supply, how will the equilibrium price be reached? Explain with the help of a diagram. 6 Or Explain the effect of a leftward shift of demand curve of a commodity on its equilibrium price and quantity, with the help of a diagram. SECTION - B Q. 13. Answer the following questions: 1x4 (i) What is macro-economics? (ii) Give an example of a micro-economic study. (iii) What is meant by fiscal deficit? (iv) When is there a deficit in the balance of trade? Q. 14. What is meant by revenue deficit? What are the implications of this deficit? 3 Q. 15. Calculate Net National Disposable Income from the following data: 3 Rs. (Crores) (i) Gross national product at factor cost (ii) Net current transfers from rest of the world (iii) Net indirect tax (iv) Consumption of fixed capital (v) Net factor income from abroad 800 50 70 60 (-) 10

Q. 16. Give the meaning of marginal propensity to save and aver age propensity to save. Can the value of average propensity to save benegative? If yes, when?3

Q. 17. In an economy, the marginal propensity to consume is 0.75. Investment is increased by Rs. 200 crores. Calculate the total increase in income and consumption expenditures. 3 Q. 18. How does a central bank control the availability of credit by open market operations? Explain. 4 Q. 19. Explain briefly any two objectives of a government budget. 4 Q. 20. State the four functions of money. Describe any one. 4 Q. 21. Distinguish between current account and capital account of balance of payments account. Mention any two transactions of capital account. 4 Or How is the foreign exchange market rate determined? Explain with the help of a diagram. Q. 22. From the following data calculate National Income by (i) income method and (ii) expenditure method: 3, 3 Rs. (Crores) (i) Compensation of employees (ii) Net factor income from abroad (iii) Net indirect tax (iv) Profits (v) Private final consumption expenditure (vi) Net domestic capital formation (vii) Consumption of fixed capital (viii) Rent (ix) Interest (x) Mixed income of self-employed (xi) Net exports (xii) Government final consumption expenditure Q. 23. Will the following be included in domestic factor Income of India? Give reasons for your answer. 6 (i) Profits earned by a foreign bank from its branches Ii India. (ii) Scholarships given by Government of India. (iii) Profits earned by a resident of India from his company In Singapore. (iv) Salaries received by Indians working In American Embassy in India. Q. 24. Explain the concept of under-employment equilibrium with the help of a diagram. Show on the same diagram the additional investment expenditure required to reach full employment equilibrium. 6 Or Explain the equilibrium level of income with the help of Consumption + Investment (C + I) curve If planned saving is greater than planned Investment, what adjustments will bring about equality between the two? 1,200 (-) 20 120 800 2,000 770 130 400 620 700 (-) 30 1, 100

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Q. 1. Answer the following questions: 1x4 (i) Give meaning of opportunity cost. (ii) Define production function. (iii) Give meaning of producers equilibrium. (iv) Give one example of variable cost. Q. 2. Explain the central problem of what to produce. 3 Q. 3. What is the relation between the change in the price of a good and the change in demand of its substitute good? Explain with the help of an example. 1, 2 Q. 4. How is equilibrium price determined under perfect competition? Explain with the help of a diagram. 3 Q. 5. What happens to equilibrium price when there is decrease in demand? Explain with the help of a diagram. 3 Q. 6. At a price of Rs. 4 per unit a consumer buys 50 units of a good. The price elasticity of demand is 2. How many units will the consumer buy at Rs. 3 per unit? 4 Q. 7. Given that Fixed Cost is Rs. 20, calculate (a) Total Variable Cost and (b) Total Cost from the following: 4 Output (Unit) 0 1 2 3 Marginal Cost (Rs.) 0 10 15 25

Q. 8. Explain the effects on output when all inputs are increased in the same proportion. 4 Q. 9. State any two features of monopolistic competition Draw Average Revenue and Marginal Revenue curves of a firm in a single diagram in this market. 4 Or State any three features of perfect competition. Also draw Average Revenue curve of the firm in this market. Q. 10. Explain briefly any three factors which lead to increase in demand. 6 Q. 11. Explain briefly any three determinants of supply of a good. 6 Or Explain the Law of Variable Proportions. Also state the reasons behind the law. Q. 12. What is revenue of a firm? Give meaning of Average Revenue and Marginal Revenue. What happens to average revenue when marginal revenue is (i) greater than average revenue, (ii) equal to average and (iii) less than average revenue? 6 SECTION - B Q. 13. Answer the following questions 1x4 (i) Give meaning of macro economics.

(ii) Give one example of micro economics. (iii) Define foreign exchange. (iv) What is Balance of Trade? Q. 14. Calculate Net Value Added at Factor Cost from the following: 3 Rs. (Lakhs) (i) Purchases of materials (ii) Depreciation (iii) Sales (iv) Excise tax (v) Opening stock (vi) Intermediate consumption (vii) Closing stock 30 12 200 20 15 48 10

Q. 16. Explain briefly the meaning of involuntary unemployment and full employment. 3 Q. 17. Explain the relation between foreign exchange rate and demand for foreign exchange. 3 Q. 18. Explain the unit of value function of money. 4 Or Explain the standard of deferred payment function of money. Q. 19. Explain the issue of currency function of a central bank. 4 Q. 20. Explain revenue receipts in a government budget with appropriate examples. 4 Q. 21. Explain the concept of revenue deficit in a government budget. 4 Q. 22. Distinguish between intermediate products and final products. Giving reason, state whether the following are intermediate products or final products: 3, 3 (i) Purchase of equipments for installation in a factory (ii) Purchase of food items by a hotel (iii) Purchase of armaments by military Q. 23. Find out (a) National Income and (b) Gross National Disposable Income from the following data: 4, 2 Rs. (Crores) (i) Private final consumption expenditure (ii) Net current transfers from the rest of the world (iii) Indirect tax (iv) Net domestic capital formation (v) Government final consumption expenditure (vi) Consumption of fixed capital (depreciation) (vii) Subsidies (viii) Exports (ix) Net factor income from abroad (x) Imports 400 (-) 5 65 120 100 20 5 30 (-) 10

40 Q. 24. Explain the role of taxation and government expenditure in reducing aggregate demand in an economy. 6 Or Explain the role of reserve ratio and rate of interest in reducing aggregate demand in an economy.

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SECTION - A Q. 1. Answer the following questions: 1x4 (i) State what economics is all about. (ii) Give meaning of producers equilibrium. (iii) Give one example of fixed cost. (iv) Define market period. Q. 2. What is opportunity cost of a given activity? Explain with the help of an example. 3 Q. 6. A consumer spends Rs. 250 on a good when its price is 5 per unit. When the price rises to Rs. 6 per unit, he spends Rs. 240. Calculate the price elasticity by percentage method. 4 Q. 7. Explain the effect on output when only one input is increased and all other inputs are held constant. 4 Q. 8. Complete the following table: 4

Price (Rs.) 5 6 7 8

Output (Units) 8 7 6 5

Total Revenue (Rs.)

Marginal Revenue (Rs.)

Q. 9. State two features common to prefect competition and monopolistic competition. Explain any one. 4 Or State three features of monopoly. Explain any one. Q. 10. Explain any three factors which lead to decrease in demand. 6 Q. 11. Explain the concept of returns to scale with the help of an example. 6 Or Explain any three determinants of supply of a good. Q. 12. Draw Average Total Cost, Average Variable Cost and Marginal Cost curves in a single diagram. Also explain the relation between Marginal Coat and Average Total Cost with its help. 6

SECTION - B Q. 13. Answer the following questions: 1x4 (i) Give meaning of micro economics. (ii) Give one example of macro economics. (iii) Define foreign exchange rate. (iv) Give meaning of Balance of Payments. Q. 14. Calculate Gross Value Added at Market Price from the following: 3

(Rs. in lakhs) (i) Intermediate cost (ii) Closing stock (iii) Sales (iv) Net indirect tax (v) Subsidy (vi) Depreciation (vii) Opening stock 8 5 30 6 1 3 4

Q. 15. If marginal propensity to save is 0.1 and increase in national income is Rs. 500 crores, calculate increase in investment. 3 Q. 16. Explain briefly the meaning of excess demand and deficient demand in an economy. 3 Q. 18. Explain the medium of exchange function of money. 4 Or Explain the unit of value function of money. Q. 19. Explain the banker to the government function of a central bank. 4 Q. 20. Explain the meaning of revenue expenditure and capital expenditure in a government budget with appropriate examples. 4 Q. 21. Explain any two objectives of a government budget. 4 Q. 22. Distinguish between a factor payment and a transfer payment. Giving reasons, state whether the following are included in national income or not. 6 (i) Brokerage payment on sale of shares. (ii) Interest payment on loan taken by an individual to buy a motor cycle. (iii) Festival gift by an employer to his employees. Q. 23. Calculate (a) Net National Product at Market Price, (b) Gross National Disposable Income: 4, 2

(Rs. in crores) (i) Private final consumption expenditure 200

(ii) Net indirect tax (iii) Change in stocks (iv) Net current transfers from abroad (v) Government final consumption expenditure (vi) Consumption of fixed capital (depreciation) (vii) Net domestic capital formation (viii) Net factor income from abroad (ix) Net imports

20 (-) 5 (-) 10 50 15 30 5 10

Q. 24. Explain two fiscal policy measures for increasing aggregate demand in an economy. 6 Or Explain two monetary policy measures for increasing aggregate demand in an economy.

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