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Page 1 of 5 REVISION PAPER OF ECONOMICS Micro economics unit 1, 2 , 3 Macro economics Unit 1, 2, 3 SET -2 Instructions for the candidates: a) All questions in both the sections are compulsory. b) Marks for questions are indicated against each. c) Question No 1-5 and 16-20 are very short-answer questions carrying 1 mark each. They are required to be answered in one sentence each. d) Question No 6-8 and 21-23 are short-answer questions carrying 3 marks each. Answer to them should not normally exceed 60 words each. e) Questions No 9-11 and 24-26 are also short-answer questions carrying 4 marks each. Answer to them should not normally exceed 70 words each. f) Questions No 12-15 and 27-30 are long-answer questions carrying 6 marks each. Answer to them should not normally exceed 100 words each. g) Question marked star (*) are value based questions. h) Answer should be brief and to the point and the above word limit should be adhered to as far as possible. Part A (MICRO ECONOMICS) 1. A teacher is getting Rs. 1000 per month as salary. If he leaves the jobs and starts tuition work, he is expected to earn Rs 9000 per month. What would be his opportunity cost? 1 2. Point A below PP curve indicates: 1 (a) Underutilization of resources (c) Full employment of resources (b) Growth of resources (d) None of these 3. When APP falls, what is the relation between MPP and APP? 1 4. Why does the difference between ATC and AVC decrease with increase in the level of output? 1 5. In a situation of disguised unemployment, MP can be negative. 1 6. State the total expenditure method of measuring price elasticity of demand. 3 7. The price elasticity of demand of a commodity is (-) 1.5. When its price falls by Rs 1 per unit its quantity demanded rises by 3 Units. If the quantity demanded before the price change was 30 Units, What was the price at this demand? Calculate. 3 8. Explain the relationship between marginal cost and revenue cost. 3 Or Deveshprajapatisps@gmail.com Economics Teacher Page 2 of 5 A farmer takes farm on rent and carries on farming with the help of family members. Identify explicit and implicit costs from this information. Also, give reasons. 9. Explain the central problem of choice of technique . 4 10. A consumer consumes only two goods X and Y and is in equilibrium. Price of X rises. Explain the reaction of the consumer with the help of utility analysis. 4 Or Higher indifference curve represents higher level of satisfaction to the consumer . Explain the statement, also state the underlying assumption related to this property of indifference curve. 4 11. Complete the following table: 4 Output (units) TC (Rs) AVC( Rs) MC (Rs) 0 80 1 180 2 270 3 350 4 440 12. Explain the various degrees of price elasticity of demand. Use diagram. 6 13. Is the demand for the following elastic, moderate elastic, highly elastic or in elastic? Give reasons in support of answer. (i) Demand for needle (ii) Demand for petrol (iii) Demand for cars (iv) Demand for text books (v) Demand for fridge (vi) Demand for seasonal vegetables (vii) Demand for milk 6 14. To increase the production of a good, only one input is increased while other inputs are held constant. Explain its effects on total physical product. Give reasons. 6 15. Explain factors on which supply of a commodity depends. 6 PART B (MACRO ECONOMICS) 16. Electric goods like tube lights and bulbs are example of: (a) Durable consumer goods (c) Non durable consumer goods (b) Semi durable consumer goods (d) All of these 17. The rate at which commercial banks are allowed to park their surplus funds with the RBI is called: (a) Bank rate (b) Repo rate Deveshprajapatisps@gmail.com Economics Teacher Page 3 of 5 (c) Currency rate (d) Reverse repo rate 18. Store of value implies: (a) Transfer of value (c) Measure of value (b) Store of wealth (d) All of these 19. Which of the following is correct? (a) APS= S/Y (c) APC+APS = 1 (b) MPC = 1- MPS (d) All of these 20. When Autonomous consumption is 50, MPC = 0.6 and Y = 800,Value of saving will be: (a) 270 (c) 370 (b) 320 (d) None of these 21. What are externalities? Give an example of a positive externality and its impact on welfare of the people. Or Explain the concepts of injections and leakage in the circular flow of income. 22. Explain the Government s bank function of the central bank. 23. *Government of India has recently launched JAN DHAN YOJANA aimed at every household in the country to have at least one bank account. Explain how deposits made under the plan are going to affect national income of the country. 24. C= 100 +0.4 Y is the consumption function of an economy where C is consumption expenditure and Y is national income. Investment expenditure is 1100 Rs. Calculate: (i) Equilibrium level of national income. (ii) Consumption expenditure at equilibrium level of national income. 25. Calculate sales from the following data: Items (Rs in Lakh) Intermediate costs 700 Consumption of fixed capital 80 Change in stock -50 Subsidy 60 Net value added at factor cost 1300 Exports 50 26. Complete the following table: Income Consumption Exp. MPS APS 0 80 100 140 0.4 . 200 0 .. 240 .. 0.20 .. 260 0.8 0.35 Deveshprajapatisps@gmail.com Economics Teacher Page 4 of 5 27. Explain the meaning of underemployment equilibrium. Explain two measures by which full employment equilibrium can be reached. 28. How should the following be treatment while estimating national income? You must reason in support of your answer. (a) Food purchased by a foreign tourist at a hotel in New Delhi. (b) Profit of reliance industries from its chemicals business in Australia. (c) Wheat grown by a farmer but used entirely for family s consumptions. 29. In an economy, S = -150+0.4Y is the saving function, where S is saving and Y is national income.If investment expenditure is 1000, calculate: (i) Equilibrium level of national income. (ii) Consumption expenditure at equilbrium level of national income. (iii) Saving at equilibrium level of national income. Or Explain the working of investment multiplier with the help of a numerical example. 30. Calculate GNP at fc by (i) Income method and (ii) expenditure method : Items Rs ( In crores) (i) Private final consumptio expenditure 800 (ii) Government final consumption expenditure 300 (iii) Compensation of employees 600 (iv) Net imports 50 (v) Gross domestic capital formation 150 (vi) Consumption of fixed capital 20 (vii) Net indirect taxes 100 (viii) Net factor income from abroad (-) 70 (ix) Dividend 150 (x) Rent 120 (xi) Interest 80 (xii) Undistributed profit 80 (xiii) Social security contribution by employees 60 (xiv) Corporation tax 50 31. From the following data calculate personal disposable income : Items Rs ( In crores) (xv) Net domestic product at factor cost accruing to 800 private setcor Deveshprajapatisps@gmail.com Economics Teacher Page 5 of 5 (xvi) (xvii) (xviii) (xix) (xx) (xxi) (xxii) (xxiii) National Debt interest Current transfers from government Saving of private corporate sector Corporation tax Direct taxes paid by house holds Deprication Net factor income from abroad Net Current transfers to abroad Deveshprajapatisps@gmail.com Economics Teacher 50 70 200 40 30 60 20 (-) 10
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