Microeconomics-II and Indian economy
Paper: G.E – 4.1 Chg
Full marks:80 (2019-20)
(Group – A)
1. Which one of the following is not the
feature of monopolistic competition?
(a) Product differentiation
(b) Possibility of free entry and exit
(c) Homogeneous product
(d) Presence of selling cost
2. In Oligopoly market, the shape of the
demand curve of a firm is
(a) Downward (b) Horizontal
(c) Vertical (d) Indeterminate
3. In oligopoly ________ Sweezy model the
more will be the difference between price
elasticity of demand, for two parts of the
demand curve,
(a) The more will be the discontinuity of MR
curve.
(b) The less will be the discontinuity of MR
curve.
(c) There will be no impact on discontinuity of
MR curve
(d) The discontinuous portion of the MR curve
will disappear.
4. In perfectly competitive market in the
product market with single variable factor, the
firm’s demand curve for the factor is given by
its
(a) Value of marginal product curve
(b) Marginal physical productivity curve.
(c) Marginal fixed cost curve
(d) Average fixed cost curve
5. The3 percentage of work-force engaged in
primary sector in 2016-17 was
(1 X 20)
(a) 15-25% (b) 25-35%
(c) 35-45% (d) 45-55%
6. In Indian economy sectoral distribution of
national income shows
(a) Increase in contribution of primary sector
in NI.
(b) Decrease in contribution of primary
sector in NI and increase in contribution of
secondary and tertiary sector.
(c) Increase in contribution of primary sector
in NI and decrease in contribution of
secondary and tertiary sector.
(d) Increase in contribution of primary,
secondary and tertiary sector.
7. In the national income in India in 2016-17,
the contribution of primary sector is
(a) 15-25% (b) Less than 10%
(c) 25-30% (d) 50-60%
8. Which one of the following is not the cause
of low productivity in Indian agriculture?
(a) Use of backward technology
(b) High population pressure
(c) Lack of irrigational facilities
(d) Better banking facilities.
9. In monopoly market the firm is
(a) Price taker (b) Price maker
(c) Cost determinant
(d) Price and quantity determinant.
10. In monopoly if price elasticity of demand
is relatively inelastic (e < 1) then
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(a) MR > 0 (b) MR = 0 (c) 2,250 (d) 2,400

(c) MR = P (d) MR < 0 17. In modern theory, economic rent is

11. In equilibrium of a monopoly firm in the (a) Inversely related to elasticity of supply of
long-run factor of production

(a) There may be normal profit and may be (b) Positively related to elasticity of supply of
super normal profit factor of production

(b) There will be normal profit only. (C) Unrelated to elasticity of supply of factor
of production
(c) There will be loss only
(d) Inversely related to elasticity of demand of
(d) There will be only super normal profit.
factor of production
12. Social cost of monopoly arises because in
18. Net profit is equal to
this market
(a) Gross profit – Explicit cost
(a) P > MC (b) P < MC
(b) Gross profit – Implicit cost
(c) P = MC (d) P = AC
(c) Gross profit + Explicit cost
13. Among the following which one is not the
basic objective behind disinvestment in India? (d) Gross profit + Implicit cost

(a) To reduce the economic burden on 19. Per-capita income is

government
(A) National income / population
(b) To develop the public fund
(b) GDP / Population
(c) To create the competition in the market
(c) Population / GDP
(d) To fulfil the social responsibility
(d) National income / GDP
14. Which among the following is not the
20. National income means
corrective measure to remove the deficit in
BOP? (A) Net domestic product at factor cost
(a) Increase the quantity of exports (b) Net national product at market price
(b) Increase the quantity of imports (C) Net national product at factor cost
(c) To control foreign exchange (d) Net domestic at market price
(d) Devaluation

15. In case of disguised unemployment, the

marginal product of labour is

(a) Positive (b) Zero

(c) Infinity (d) One

16. For measurement of poverty line in India,

the minimum average calorie intake is

(a) 2,000 (b) 2,500

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(Group – B) (2 X 30)

1. In which year in India 14 commercial banks were nationalised?

(a) 1965 (b) 1991 (c) 1969 (d) 1979
2. Which of the following is the largest poverty alleviation programme in India?
(a) NREGP (b) TRYSEM (c) MGNREGS (d) NREP
3. In which programme 10 million poorest families are being given 25 kg food grains per
month at a very low price?
(a) NREGP (b) TRYSEM (c) Antyodaya Anna Yojana (d) NREGS
4. At present the percentage of people lies below the poverty line in India is
(a) 20-25% (b) 25-35% (c) 35-45% (d)45-50%
5. The seasonal unemployment is mainly observed in
(a) Agricultural sector (b) Industrial sector
(c) Service sector (d) Trade sector
6. The equilibrium condition of a discriminating monopoly firm in case of two markets;
(a) e1 ≠ e2, MR1 = MR2 (b) e1 > e2, MR1 < MR2
(c) e1 < e2, MR1 > MR2 (d) e1 ≠ e2, MR1 < MR2
7. In monopoly market, supply curve
(a) Is upward rising (b) Is downward sloping
(C) Is horizontal (d) Does not exist
8.The Lerner’s index of monopoly power is
𝑀𝐶 𝑷− 𝑴𝑪 𝑃− 𝐴𝐶 𝐴𝐶
(a) P – (b) (c) (d) P –
𝑃 𝑷 𝑃 𝑃

9. If the demand curve has a kink, what will be the shape of the MR curve in Sweezy’s
model?
(a) MR curve will be horizontal (b) MR curve will be vertical
(c) MR curve will be discontinuous (d) MR curve will be positively sloped
10. In monopolistic competition, the existence of excess production capacity arises because
in the long-run firm produces at
(a) The rising part of LAC (b) The minimum point of LAC
(c) Falling part of LAC (d) The minimum point of LMC
11. The difference between GNP and GDP is

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(a) Net foreign earnings (b) Net imports

(c) NNPFC (d) Per-capita income
12. Which one of the following is considered as the index of development?
(a) Per-capita income (b) Poverty (c) GDPMP (d) NNPMP
13. What is the contribution of tertiary sector in the national income in India in recent
times?
(a) Below 10% (b) 15-20% (c) 25-30% (d) 50-60%
14. Which sector of India has shown the tremendous growth in the 1st decade of 21st
century?
(a) Manufacturing sector (b) Agricultural sector
(c) Information and communication technology sector (d) Other sectors
15. The activity of banking and insurance is included in
(a) Primary sector (b) Secondary sector
(c) Tertiary sector (d) Other sector
16. ‘Opeartion Barga’ a land reform initiated by the government of West Bengal initiated in
(a) 1977 (b) 1967 (c) 1985 (d) 1991
17. Which among these institutions is regarded as apex rural financial institution?
(a) Land development bank (b) Regional rural bank (c) Co-operative credit societies
(d) National bank for agriculture and rural development
18. An enterprise is a micro enterprise if
(a) Its service do not exceed 10 lakhs, production do not exceed 25 lakhs.
(b) Its service do not exceed 25 lakhs, production do not exceed 10 lakhs.
(c) Its service do not exceed 12 lakhs, production do not exceed 15 lakhs.
(D) Its service do not exceed 15 lakhs, production do not exceed 12 lakhs.
19. In the last few decades throughout the world, the market for FDI was directed towards:
(a) Agricultural sector (b) Production sector
(c) Service sector (d) Mining industry
20. Which of these sources is not an institutional source of rural credit
(a) Co-operative credit societies (b) NABARD (c) RRB (d) Rural money lenders
21. One important example of Cartel is

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(a) OCED (b) OPEC (c) Indian railways (d) IMF

22. If the monopolist faces a linear demand curve, its slope will be
(a) Same as the slope of MR curve (b) Double of the slope of MR curve
(c) Half of the slope of the MR curve (d) One-third of the slope the MR curve
23. In Sweezy’s kink demand curve model price is
(a) Variable (b) Rigid (c) Less than MC (d) Greater than AC
24. A monopolistic competitive firm in the long-run equilibrium earns
(a) Super normal profit (b) Normal profit
(c) Negative profit (d) Either super normal profit or negative profit
25. If the nominal rate of interest is 12% and the rate of inflation is 8%, what is the real rate
of interest?
(a) 4% (b) 12% (c) 10% (d) 8%
26. If leisure is preferable to wage income, then the individual labour supply curve will be
(a) Positively sloped (b) Vertical (c) Backward bending (d) Horizontal
27. Quasi rent is equal to
(a) TR – TC (b) TR – TVC (c) TR – MC (d) TR – AC
28. When a firm employs two units of labour as a variable factor then total production is 50
units. The total production becomes 65 units for three units of labour. What is the marginal
physical product for third units of labour?
(a) 10 (b) 15 (c) 20 (d) 25
29. If VMP > MRP > W, then
(a) There is monopolistic exploitation (b) There is monopsonist exploitation
(c) Both monopolistic and monopsonist exploitation (d) Oligopolistic exploitation
30. ‘Rent is high because corn is high’ according to which theory?
(a) Modern theory of rent (b) Ricardian theory of rent
(c) Marshallian theory (d) Pigou’s theory

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Microeconomics-II and Indian economy

Paper: G.E – 4.1 Chg
Full marks:80 (2021)
Answer any five questions. 2x5
GROUP-A
1. A firm under monopoly market situation in short run equilibrium can have
(a) normal profit (b) supernormal profit
(c) loss (d) All of these

2. Power of monopoly becomes zero when

(a) P < MC (b) P > MC (c) MR = P (d) P = MC

3. Individual labour supply curve is backward bending when

(a) Income effect > substitution effect (b) Income effect = substitution effect
(c) Income effect < substitution effect (d) Income effect is zero

4. Which of the following is not a feature of a monopoly market?

(a) Single seller (b) No deadweight loss
(c) Differentiated product (d) No unique supply curve

5. In an oligopoly market if every seller sells homogeneous goods then it is called

(a) Collusive oligopoly (b) Noncollusive oligopoly
(c) Pure oligopoly (d) Differentiated oligopoly

6. The range of discontinuity of MR curve in kinked demand curve model depends on

(a) difference between AC and MC
(b) difference between AR and MR
(c) difference between elasticities of two portions of demand curve
(d) None of the above

7. Quasi rent implies

(a) TR – TFC (b) Profit + TFC (c) TR – TC (d) TR – TVC

8. If product market is monopolistic and factor market is competitive then

(a) VMP = MRP (b) VMP > MRP (c) VMP < MRP (d) VMP = 0

9. Which of the following types of profit is considered to be a part of the cost of production?
(a) Supernormal profit (b) Normal profit
(c) Monopoly profit (d) Oligopoly profit

10. For a firm in monopolistic competition

(a) perceived demand curve is the real demand curve
(b) proportional demand curve is constructed on the basis of perception
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(c) perceived demand curve is much more elastic than the proportional demand curve
(d) perceived demand curve is much more inelastic than the proportional demand curve

Group – B
Answer any ten questions. 3×10

11. The equilibrium of a firm in a monopoly market takes place in

(a) inelastic portion of the demand curve
(b) elastic portion of the demand curve
(c) unitary elastic portion of the demand curve
(d) None of these

12. If in monopoly market AR is 50 and MR is 25, then the absolute value of elasticity of
demand
1
(a) 1 (b) 2 (c) (d) 0
2

3
13. If the price elasticity of demand in the monopoly market is , the degree of monopoly
2
power is equal to
3 𝟐 1 3
(a) (b) (c) (d) −
2 𝟑 3 2

14. In oligopoly market, we find different models because of

(a) non-existence AR curve (b) indeterminacy in the equilibrium
(c) difference in the reaction of the rivals (d) existence of the selling cost

15. If the supply of a factor is perfectly inelastic, then economic rent is

(a) equal to actual earning (b) equal to transfer earning
(c) zero (d) negative

16. Which of the following is an example of ‘Cartel’?

(a) IMF (b) OECD (c) OPEC (d) UNO

17. Net profit is determined from the gross profit by subtracting

(a) own labour and the opportunity cost of supply of capital
(b) price of raw materials
(c) cost of wages
(d) cost of risk bearing

18. Natural monopoly arises when

(a) there is free entry and exit of firms in an industry
(b) a firm has a monopoly in natural resources
(c) the firm enjoys economies of scale
(d) None of the above

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19. In monopolistic competition the long run equilibrium takes place in the
(a) rising part of LAC curve (b) falling part of LAC curve
(c) minimum point of LAC curve (d) None of these

20. Consider the following table:

Unit of factor Price per Total product MPP VMP
factor (Rs.)

1 50 120 120 6,000

2 50 220 ? 11,000

3 50 300 80 ?

What is the MPP for the 2nd unit and VMP for the 3rd unit respectively?
(a) 100, 4000 (b) 100, 24000 (c) 220, 4000 (d) 120, 5000

21. If the nominal rate of interest is 12% and the rate of inflation is 10·2%. What will be the
real rate of interest?
(a) 22·2% (b) 1·8% (c) 12% (d) 10·2%

22. If for a monopoly firm P = Rs.10, MR = Rs.5 for any particular level of output, and if MPP
= 20 what will be the difference between the value of VMP and MRP?
(a) Rs.100 (b) Rs.200 (c) Rs.300 (d) Rs.400

23. In monopoly market, with downward sloping straight line demand curve
1
(a) slope of the AR curve is 𝑟𝑑 of slope of MR curve
3
1
(b) slope of the MR curve is of the slope of the AR curve
2
1
(c) slope of the AR curve is of the slope of the MR curve
2
1
(d) slope of the MR curve is of the slope of the TR curve
2

24. Which of the following is the profitability conditions of price discrimination?

(a) e1 > e2, MR1 ≠ MR2 (b) e1 = e2, MR1 > MR2
(c) e1 ≠ e2, MR1 = MR2 (d) e1 = e2, MR1 = MR2

25. ‘Rent is a differential surplus’— this statement is associated with

(a) Modern theory of rent (b) Ricardian theory of rent
(c) Keynesian theory of rent (d) Neo-Keynesian theory of rent

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 MATHUR SIR CLASSES 9830489610

MODULE – II
Full marks: 40
Group – A
Answer any five questions. 2x5

26. If we subtract depreciation of capital from the gross National product at factor cost, we
get
(a) Net National product at market price (b) Net National product at factor cost
(c) Real National product (d) Nominal National product

27. Which among the following is not considered when the national income is estimated?
(a) The profit of joint stock companies
(b) The market price of the factors used in the production which is owned by the
entrepreneur
(c) Income of the self-employed people
(d) Transfer earning

28. If Gross Domestic Product is subtracted from Gross National Product, then we will get
(a) net factor earning of the National factors of production from the external countries
(b) depreciation cost
(c) net indirect tax
(d) operational surplus

29. The growth of service sector in Indian economy is

(a) the sign of development (b) not the sign of development
(c) may not be the sign of development (d) may be the sign of development

30. As a result of green revolution in Indian agriculture

(a) regional disparity in agricultural production is observed
(b) inequality of the distribution of income among the farmers is resulted
(c) disparity among the pattern of the food crops production is seen
(d) All of the above

31. Which of the following is the part of the institutional reforms in Indian agriculture?
(a) Use of high yielding variety of seeds (b) Cultivation with improved technology
(c) Abolition of zamindary system (d) Application of chemical fertilizers

32. Which type of the following industries were emphasized in India during the second Five
Year Plan
(1956-61)?
(a) Rural small-scale industries (b) Heavy iron and steel industries
(c) Textile industries (d) Jute industries

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33. What percentage of India’s population lives under poverty line?

(a) 40% (b) 35% (c) 15% (d) 20%

34. The new economic reforms took place in

(a) 1985 (b) 1991 (c) 2001 (d) 2008

35. By the recommendations of which committee under the guidance of Ministry of Finance
of the Government of India in the year 1999 the Insurance Regulatory and Development
Authority (IRDA) was established for the purpose of regulating the insurance system of the
country?
(a) Narasimham Committee (b) Malhotra Committee
(c) Raja Chelliah Committee (d) Rangarajan Committee

Group – B
Answer any ten questions. 3×10

36. Gross Domestic Product at factor cost (GDPfc) can be derived from the Gross Domestic
Product at market price (GDPmp) by the following method:
(a) GDPfc = GDPmp – subsidies + indirect tax
(b) GDPfc = GDPmp – indirect tax + subsidies
(c) GDPfc = GDPmp + Net earnings of the National factors of production from the external
countries
(d) GDPfc = GDPmp + consumption of fixed capital

37. The relationship between Nross National Product (NNP) and the Nross Domestic Product
(NDP) is
(a) NNP = NDP – consumption of fixed capital
(b) NNP = NDP + depreciation cost
(c) NNP = NDP + Net factor earnings of the National factors from the external countries
(d) NNP = NDP – Net factor earnings of the National factors from the external countries

38. If in a country for a particular year the nominal gross domestic product is ` 50,000 and
the real gross domestic product is ` 40,000, then the GDP deflator will be
(a) 80 (b) 125 (c) 90,000 (d) 10,000

39. Which one among those mentioned in the following is the sign of structural weakness of
Indian economy?
(a) The spread of service sector before the full development of the secondary sector
(b) The decline of the importance of the primary sector in the occupational structure
(c) Only the public sector enterprises fall in secondary sector
(d) Failure of the implementation of the modern technologies in the service sector

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40. Which of these economists said that one of the signs of development is the declining
contribution of the primary sector?
(a) Clark & Fisher (b) Marshall (c) Samuelson (d) Schumpeter

41. The partial selling of the ownership (equity share) of public sector unit to private
entrepreneur is called
(a) employment creation (b) disinvestment of public sector unit
(c) disinvestment of individual enterprise (d) disinvestment of private sector enterprise

42. Which of the following does not fall in the recent trend or development of the Indian
banking system?
(a) Merger, incorporation, take over (b) Social banking
(c) Squeezing of private banks (d) Extension of bank credits in priority sectors

43. According to MSMED Act of 2006 those producing units in India in which capital
investment for machines and machineries is less than rupees twenty-five (25) lakhs are
designated as
(a) micro enterprise (b) medium enterprise
(c) big enterprise (d) small enterprise

44. Which of the following character does not fall into the characters of new industrial
policy of Government of India 1991?
(a) Introduction of licensing system in industry
(b) Reduction of the sphere and role of the public sector units
(c) Abolition of the upper limit to control monopoly and restricted trade
(d) Free entry of foreign capital and foreign technology

45. The type of unemployment that has increased in number in the capitalist system of
Indian economy in this era of globalization is
(a) disguised unemployment (b) frictional unemployment
(c) cyclical unemployment (d) seasonal unemployment

46. The insufficient development of irrigational system in Indian agriculture creates

(a) frictional unemployment (b) seasonal unemployment
(c) disguised unemployment (d) cyclical unemployment

47. Which of the following is the reason behind the inequality of income distribution in
India?
(a) Private ownership of the property
(b) Unemployment and semi unemployment
(c) Inflation (d) All of these

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48. Which of these is not a condition for adverse BOP situation?

(a) Capital account deficit (b) Capital account surplus
(c) Fall in the export earning (d) Sharp rise in import bill

49. In the era of post economic reforms in India for the balance of trade in external trade
(a) deficit has increased gradually
(b) surplus has increased gradually
(c) the amount of deficit has become static
(d) the amount of surplus has become static

50. The type of unemployment that has been estimated on the basis of current and daily
status by National
Sample Survey Organisation (NSSO) indicates
(a) seasonal and disguised unemployment (b) open unemployment
(c) unemployment in unorganized sector (d) frictional unemployment

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