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Page 1 of 4 REVISION PAPER OF ECONOMICS Micro economics unit 1, 2 , 3 Macro economics Unit 1, 2, 3 SET - 1 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. Can PP curve be a straight line? 2. *A doctor has a private clinic in Surat and his annual earnings are Rs 15 lakhs. If he works in a government hospital in Surat, his annual earnings are Rs 10 lakhs. What is the opportunity cost of having a clinic in Surat? 3. When the input of labour is increased from 2 to 6 units, output increases from 50 to 90, then marginal product is : (a) 10 (c) 130 (b) 30 (d) 1.6 4. If TR = TC = Rs 10, it is a situation of : (a) Abnormal profit (c) Breakeven point (b) Normal profit (d) Both (b) and (c) 5. Price elasticity of supply of a good is 0.6. Is the supply elastic or inelastic , and why? 6. The market demand for a good at Rs 4 is 100 units. The price rises and as a result its market demand falls to 75 units. Find out the new price if the price elasticity of demand for those goods is (-) 1. Deveshprajapatisps@gmail.com Economics Teacher Page 2 of 4 7. If a product price increases, a family`s spending on the product has to increase. Defend or refute. 8. * In case of electricity which is sold by the government at a subsidized price, how can the government lower its losses without lowering the subsidy? Or 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 what to produce with the help of an example. 10. State the condition of consumer`s equilibrium in case of single commodity. 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. 11. Complete the following table: Output (units) Total variable cost Average variable Marginal Cost (Rs) (Rs) cost (Rs) 1 .. 12 2 20 .. .. . 10 10 4 40 12. Explain the effects of increase in income of the buyers of the good X on the demand of X. Use diagram showing demand for good X on the axis and its price on Y- axis. 13. Define price elasticity of demand. Discuss the factor affecting price elasticity of demand. 14. What is meant by average cost and marginal cost? Explain the relationship between AC and MC with the help of example and diagram. 15. Give meaning of the producer s equilibrium. A producer produces that quantity of his product at which marginal cost and marginal revenue are equal. Is he earning maximum profits? Give reasons for your answer. PART B (MACRO ECONOMICS) 16. Which of the following leads to market price? (a) Factor cost indirect taxes (c) Factor cost + indirect taxes (b) Factor cost net indirect taxes (d) Factor cost + net indirect taxes 17. In India, Coins are issued by (a) State bank of India (c) Ministry of finance (b) Reserve bank of India (d) Ministry of urban development 18. Repo rate relates to: Deveshprajapatisps@gmail.com Economics Teacher Page 3 of 4 (a) Short term borrowing by the (c) Overnight borrowings by the central commercial banks bank (b) Long term borrowing by the (d) Securities are sold by the central commercial banks bank 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 75, MPC = 0.65 and Y = 1500, consumption will be: (a) 900 (c) 1050 (b) 975 (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 Lender of last resort 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) (i) Net value added at factor cost 560 (ii) Depreciation 60 (iii) Change in stock (-) 30 (iv) Intermediate cost 1000 (v) Exports 200 (vi) Indirect taxes 60 26. Complete the following table: Income Saving APC MPC 0 -45 50 -30 .. . 100 -15 .. .. 150 0 .. Deveshprajapatisps@gmail.com Economics Teacher Page 4 of 4 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) Bonus paid to employees. (b) Addition to stock during a year (c) Purchase of taxi by a taxi driver Or What precautions are necessary while using value added method of measuring national income? 29. How does the quantitative and qualitative meausres of monetary policy control the excessive and deficient demand? Explain in details. 30. From the following data calculate personal disposable income : Items Rs ( In crores) (i) Net domestic product at factor cost accruing to 800 private setcor (ii) National Debt interest 50 (iii) Current transfers from government 70 (iv) Saving of private corporate sector 200 (v) Corporation tax 40 (vi) Direct taxes paid by house holds 30 (vii) Deprication 60 (viii) Net factor income from abroad 20 (ix) Net Current transfers to abroad (-) 10 Deveshprajapatisps@gmail.com Economics Teacher
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