JNANA JYOTHI ACADEMY

PREPARATORY EXAMINATION FEB-2015

ECONOMICS II

TIME: 3 Hrs 15 Mnts

MARKS: 100
SECTION A

I.

ANSWER THE FOLLOWING QUESTION IN A SENTENCE EACH. EACH QUESTON CARRIES

ONE MARKS.
10*1=10

1. What is budget?
2. Write the formula to calculate the price elasticity of demand?
3. Give the meaning of marginal cost?
4. What is market?
5. Give the meaning of monopoly?
6. Give the meaning of macro-Economics?
7. How to calculate NNP?
8. What do you mean by overdraft?
9. What do you mean by psychological law of consumption?
10. Expand WTO?
SECTION B

II.

ANSWER ANY TEN OF THE FOLLOWING QUESTION IN TWO SENTENCE EACH. EACH
QUESTON CARRIES TWO MARKS.
10*2=20

11. Distinguish between positive economics and normative economics?

12. Write any four properties of indifference curve?
13. Give the meaning of average cost. If total cost of a firm to produce 5 pens is Rs.140, calculate the
average cost incurred by the firm?
14. Who is the price taker? Why?
15. Write any four features of oligopoly?
16. Write any four limitation of macro-Economic?
17. Mention any four difficulties in measuring national income?
18. Why people demand money?
19. Distinguish between average propensity to consume and marginal propensity to consume?
20. Write any four objectives of fiscal policy?
21. Give the meaning of direct and indirect tax?
22. Write the difference between open economy and closed economy?
SECTION C

III.

ANSWER ANY SIX OF THE FOLLOWING QUESTION IN FIFTEEN SENTENCE EACH. EACH
QUESTON CARRIES FIVE MARKS.
6*5=30

23. Write a note on concept of economy?

24. Bring out the uses of micro economics?
25. Briefly explain the law of diminishing marginal utility with the help of an example?
26. Why the demand curve slope downward?
27. Explain the factors which determine the price elasticity of demand?
28. Calculate TC, AC, AVC, and AC and derive the total cost and average cost curve

Output
1
2
3
4
5

TFC
50
50
50
50
50

TVC
20
30
40
60
90

TC
?
?
?
?
?

AFC
?
?
?
?
?

AVC
?
?
?
?
?

AC
?
?
?
?
?

29. Explain the law of variable proportion with the help of a table and a diagram?
30. Discuss the nature and scope of macro economics?
31. What is national income? Explain briefly the methods of measuring national income?
32. Briefly explain the consumption function?
33. What is a budget? Explain the components of a budget?
34. Briefly explain the structure of balance of payment?
SECTION D

IV.

ANSWER ANY THREE OF THE FOLLOWING QUESTION IN 30 LINES EACH. EACH QUESTON
CARRIES TEN MARKS.
3*10=30

35. Explain how a consumer reaches equilibrium using indifference curve technique?
36. Diagrammatically explain how a perfect competitive market attains equilibrium?
37. Discuss diagrammatically the short run equilibrium of monopolistic firm?
38. Explain the functions of RBI?
SECTION E

V.

ANSWER ANY TWO OF THE FOLLOWING QUESTION. EACH QUESTON CARRIES FIVE
MARKS.
5*2=10
1. If demand and supply function of raw cotton are Qd=205-50p and Qd=25+25p, find the equilibrium
price and equilibrium quantity demanded and supplied and prove that any price other than
equilibrium price leads either to excess supply or excess demand
2. The market demand curve for commodity and total cost for monopoly firm producing the commodity
is given by the schedule below:
Quantity
Price in Rs
Total cost in Rs

0
52
20

1
44
60

2
37
85

3
4
5
6
7
8
31
26
22
19
16
13
100 102 105 109 115 125

Use the information to calculate the following:

a. The MR and MC schedules
b. The quantities for which the MR and MC are equal
c. The equilibrium quantity of output and equilibrium price of the commodity.
3. Write the process of credit creation by commercial banks with the help of an example.

JNANA JYOTHI ACADEMY

PREPARATORY EXAMINATION FEB-2015
ECONOMICS II

TIME: 3 Hrs 15 Mnts

MARKS: 100
SECTION A

I.

ANSWER THE FOLLOWING QUESTION IN A SENTENCE EACH. EACH QUESTON CARRIES

ONE MARKS.
10*1=10

1. Why the problem of choice arises?

2. What are normal goods?
3. Write the meaning of production cost?
4. What is the shape of demand curve in a perfectly competitive market?
5. Give the meaning of duopoly?
6. Name any two pioneers of macro-Economics?
7. Expand GDP?
8. Define money?
9. Give the meaning of multiplier?
10. What do you mean by exchange rate?
SECTION B

II.

ANSWER ANY TEN OF THE FOLLOWING QUESTION IN TWO SENTENCE EACH. EACH
QUESTON CARRIES TWO MARKS.
10*2=20

11. Two indifference curve do not intersect each other. Why?

12. What are inferior goods?
13. Why is marginal cost curve U shaped?
14. What is meant by break- even point?
15. Give the meaning of selling cost. Give any two examples for it?
16. Write any two differences between micro and macro-Economics?
17. Distinguish between intermediate goods and final goods?
18. Distinguish between primary deposit and derivative deposit?
19. Mention the factors affecting marginal propensity to consume?
20. Write the difference between deficit budget and surplus budget?
21. What do you mean by non- plan revenue expenditure? Give example?
22. Distinguish between balance of trade and balance of payment?
SECTION C

III.

ANSWER ANY SIX OF THE FOLLOWING QUESTION IN FIFTEEN SENTENCE EACH. EACH
QUESTON CARRIES FIVE MARKS.
6*5=30

23. Write a note on mixed economy

24. Explain the basic problems of economy?
25. What is utility? Explain its features and types?
26. What do you mean by shift in demand curve? Explain diagrammatically?
27. What are Iso-quants? Explain with the help of a diagram?
28. Briefly explain the stages of return to scale?
29. Explain the market demand with the help of schedule and diagram?

30. Write a note on nominal national income and real national income?
31. Write a short note on supply of money?
32. Briefly explain investment function?
33. Explain any two instruments of fiscal policy?
34. Briefly explain the exchange rate management in India?
SECTION D

IV.

ANSWER ANY THREE OF THE FOLLOWING QUESTION IN 30 LINES EACH. EACH QUESTON
CARRIES TEN MARKS.
3*10=30

35. Explain the concept of budget line and budget set graphically with the help of example?
36. Explain the classification of price elasticity of supply with the help of diagram?
37. Discuss long run equilibrium under monopoly with diagram?
38. Describe the function of money?
SECTION E

V.

ANSWER ANY TWO OF THE FOLLOWING QUESTION. EACH QUESTON CARRIES FIVE
MARKS.
5*2=10
4. As per the demand function Qd=30-2p, when the price of tomato per kg. is Rs8, 10, 12, and 14,
calculate the quantity of demand and derive an individual demand curve
5. Calculate the missing cost
Output
1
2
3
4
5

TFC
50
?
50
50
50

TVC
?
30
?
60
90

TC
70
?
90
110
?

AFC
50
25
?
12.5
10

AVC
?
?
13.33
15
18

AC
?
40
30
27.50
?

6. The market demand curve for commodity and total cost for monopoly firm producing the commodity
is given by the schedule below:

Quantity
Price in Rs
Total cost in Rs

0
52
20

1
44
60

2
37
85

3
4
5
6
7
8
31
26
22
19
16
13
100 102 105 109 115 125

Use the information to calculate the following:

a. The MR and MC schedules
b. The quantities for which the MR and MC are equal
c. The equilibrium quantity of output and equilibrium price of the commodity.