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GOLDCREST HIGH, LATUR Max. Marks: 80 ON THE WINGS OF EXCELLENCE II Preliminary Examination Economics Time: 3 hrs. Grade: 12 Date: 18/01/17 (Candidates are allowed additional 15 minutes for only reading the paper) They must NOT start writing during this time.) Answer Question 1 (Compulsory) from Part I and five questions from Part II. The intended marks for questions or parts of questions are given in brackets [ ]. PART I (20 Marks) Answer all questions. Question 1 [10 2] Answer briefly each of the following question (i) to (x): i) Explain why a demand curve slopes downwards? ii) Explain two adverse effect of deficit budget. iii)What do you mean by autonomous consumption? iv)Differentiate between voluntary and involuntary unemployment. v) What do you mean by homogeneous goods? What form of market sells homogenous goods? vi)What will be the impact of exchange rate appreciation on country s Balance of Trade? vii) If the Total Cost of producing 5 units of a commodity is Rs. 30 and that of producing 7 units is Rs. 40, then calculate Marginal Cost. viii) Which production stage is considered as economic of production ? Why? ix)Give one reason, why GDP is not considered as a good measure of welfare? x) What is meant by budget line? Part II (60 Marks) Answer any five questions. Question 2 i) Discuss the relationship between income of the consumer and demand for a commodity with respect to normal goods, inferior goods and necessities. [3] ii) Differentiate between extension of demand and increase in demand using diagrams. [3] iii) From the following data calculate GNPMP and National Income by using Value added Method: [6] Rs. In Crores a) Gross value of output in primary sector (at FC) 950 b) Gross value of output in secondary sector (at FC) 470 c) Gross value of output in tertiary sector (at FC) 500 d) Value of intermediate goods in primary sector 360 e) Value of intermediate goods in secondary sector 200 f) Value of intermediate goods tertiary sector 175 g) Depreciation 20 h) Indirect Tax 35 i) Subsidy 10 j) Net Factor Income from Abroad 4 Question 3 i) Discuss any two properties of Indifference curve. [3] ii) Draw the diagrams to show Elasticity of Demand when it is: [3] a) Greater than one (b) Less than one (c) Unity iii) Explain the geometric method of calculating Elasticity of Supply. [6] Question 4 i) Explain the following components of domestic factor income. [3] a) Compensation of employees (b) Operating surplus ii) Distinguish between Private Income and Personal Income. i) Explain with the help of a diagram the consumer s equilibrium through utility approach. Question 5 i) Public expenditure helps in increasing the production of an economy. In this context, discuss any two points of public expenditure. ii) Explain any two causes of disequilibrium in the Balance of Payment. iii) Define fiscal deficit, primary deficit and revenue deficit. Discuss their implications with reference to India. Question 6 i) Show the relationship between APC and APS. ii) Explain the difference between induced investment and autonomous investment. iii) Discuss the main components of Aggregates Demand in an economy with the help of a diagram. Question 7 i) With the help of a diagram, show the circular flow of income in a two sector model with savings and investment. ii) The growth of Gross Domestic Product is not a real indicator of economic welfare. Discuss two reasons to justify the given statement. iii) Explain the four ways of redemption of public debt. Question 8 i) Discuss two qualitative methods of credit control. ii) Explain any two secondary functions of money. [3] iii) Discuss the various components of the current account of Balance of Payments. Question 9 i) Show with help of a diagram, how a perfectly competitive firm earns normal profit in short-run equilibrium. ii) Discuss two features of monopoly. iii) Explain how a producer can maximise profit by using MR and MC curves. [3] [6] [3] [3] [6] [3] [3] [6] [3] [3] [6] [3] [6] [3] [3] [6]
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