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net SCHOOL CODE 06004

Reg. No.. Name: .

MODEL EXAMINATION FEBRUARY 2011

HSE II PART III ECONOMICS MAX. SCORE : 80

TIME: 2 HOURS
1. Classify the following under two heads:

COOL OFF TIME : 15 MINUTES

Partial Equilibrium, GDP, General Price Level, Production of a firm,

(3 Score)

2. A consumer wants to consume two goods. The price of two goods are Rs. 4 and Rs. 5. Consumers income is Rs.20. a) Write the equation of Budget Line. b) What is the slope of Budget Line ?. (2 Score)

3. Prepare an imaginary Production Possibility Schedule and based on that draw a PPC. (3 Score) 4. Consider the two demand function : QD = 60-10p (1) QD1 = 80-10p (2) a) Derive two demand schedule for the two demand function. b) Using the two demand schedule, draw their respective demand curves. (4 Score) 5. Macro study is more useful than micro study Do you agree ?. Compare the two studies . How is macro economics is more beneficial than micro economics ?. (3 Score) 6. Draw the flow chart showing the circular flow of income in a simple economy. (3 Score) 7. A rational consumer is always wants to attain maximum satisfaction with his limited income.

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Do you agree? Substantiate your answer with suitable diagram. (5 Score)

8. Prepare a seminar report on methods of calculating national income by using the following hints: a) Title b) Introduction c) Main points on the topic d) Own observation. (8 Score)

9. Complete the following table and write the equation for calculating SMC, SAC,TFC,TVC,AFC and AVC. OUTPUT 0 1 2 3 4 5 TC 50 65 75 95 130 SMC SAC TFC TVC AFC AVC

20

(6 Score) 10. Match the following . A 1936 J .M. Keynes RBI B Bank rate 1776 Adam Smith General Theory (3 Score) 11. Calculate GNP at Market Price, GDP at Market Price, NNP at Market Price, NNP at Factor Cost from the following data. C

Open Market Operation Wealth of Nations

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Subsidy Indirect Tax Consumption of fixed capital Mixed income Compensation of employees Rent, Interest, Profit Net Factor income from abroad Rs.4000 Rs.12000 Rs.8000 Rs. 20000 Rs.60000 Rs.20000 Rs.15000 (6 Score)

12. The bond price is Rs.500 and the rate of interest is 8% for two years: a) If market rate of interest is 10%, how much is the bond price?. b) If market rate of interest is 5%, how much is the bond price?. (4 Scores)

13. RBI has increased the bank rate and Cash Reserve Ratio in June 2008 to control inflationary tendencies on the Indian economy. However, this effort of RBI became ineffective. a) Explain the alternative measure to control money supply. 14. List out various conditions for profit maximization of a firm. 15. Draw suitable diagrams for the following . a) Technical progress-Supply curve b) Income changes- demand curve c) Inferior goods- demand curve d) Unit tax -Supply curve 16. Suppose the investment in Kerala during the year 2009-10 increased by 10 crores and in Karnataka Rs.25 crores and the MPC for Kerala is 0.8 and Karnataka is 0.75, calculate output multiplier for Kerala and Karnataka. (5 Scores) 17. Consider the following equation b=ma+ a) Identify the term a b) Identify the term (2 Scores) (4 Scores) (3 Scores)

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18. Draw the chart showing the components of Government Budget 19. Calculate equilibrium price and equilibrium quantity for the following. (5 Score) (3 Scores)

QD=800-P QS=480+P 20. Rewrite the following statements if there is any wrong: a) Oligopoly is a market situation in which there are only a few firms. b) Balance of Payments contains both visible and invisible goods. c) In a monopolistic competition, the products of firms are homogeneous. d) Net export = X - M (4 Scores)

Prepared by

1. ABBAS MANTHRY M HSST Jr. GHSS, KUMILY, IDUKKI 2. SHEEBA P ISSAC, HSST, NSPHSS, PUTTADY, IDUKKI 3. PECHIMUTHU, HSST, GHSS, MARAYOOR, IDUKKI 4. AELIYAMMA VARGHESE, HSST, GHSS, KUMILY, IDUKKI 5. JUSTIN RAJ, HSST, PHSS, VANDIPERIYAR, IDUKKI 6.VINEETH, HSST, GHSS, ANAKKARA, IDUKKI