SET 3

Candidates are required to give answers in their own words as far as practicable. Figures in
the margin indicate full marks.
Group 'A'
Very Short Answer Questions
Attempt all the questions: [11 × 1 = 11]
1. What is the definition of economics given by Adam Smith?
2. How do private goods differ from public goods?
3. When the income of a person increases from Rs.20000 to Rs.25000, then the
quantity demanded for a commodity also increases from 50 units to 70 units.
What is income elasticity of demand?
4. List any two assumptions of law of variable proportion.
5. How is GDP deflator calculated?
6. State the relationship between value of money and inflation.
7. Enlist any two economic characteristics of developing countries.
8. Write one difference between economic growth and economic development.
9. Write any two uses of mathematics in economics.
10. Find the slope of a line 2x + y = 3.
11. If the total production function is given as Q = 3L + 2L 2, find the marginal
product function.
Group ‘B’
Short Answer Questions
Attempt all the questions: [8 × 5 = 40]
12. How is Robbins’ definition of economics superior to that of Marshall’s
definition?
OR
Define land. Explain its features as a factor of production.
13. Explain constant returns to scale.
14. Why does a normal demand curve slope downwards from left to right? Explain
the reasons.
15. Describe the types of cross elasticity of demand.
16. Write short note on macroeconomics.
17. Distinguish between gross domestic product and gross national product.
18. Explain the process of capital formation.
19. Find the equation of a straight line that passes through the point (2, -3) and
makes equal intercepts on the axes.
OR
dy
Find from the function: y = (3x3 – 2x).(3x2 + 5)
dx
Group ‘C’
Long Answer Questions
Attempt all the questions: [3 × 8 = 24]
20. Explain the law of substitutions.
21. What is money? Explain the functions of money.
22. Define national income. How is national income computed from the expenditure
approach? Explain.
OR
Why measurement of national income is more difficult in developing countries?
Explain in context of Nepal.
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