MOCK TEST-- 2

Section A Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Introductory Micro Economics State the conditions in which supply changes but equilibrium price remains unchanged. What does downward movement along a demand curve indicate? Define marginal revenue. An economy always produces on, but not inside the PPC. Defend or Refute. What do you mean by Giffen good? Define Production possibility curve. Why PPC is concave to the origin? Why does a consumer purchase more when price of a commodity falls? What is the difference between monopolistic competition and perfect competition? Complete the following table: Output TC AVC 1 90 -2 -27 3 --4 180 30 MC 30 -27 -OR

Total Marks-100

1 1 1 1 1 3 3 3

3 3 4 4

Q10 Q11 Q12 Q13

How is price elasticity of supply measured with the help of geometric method? Explain the determinants of price elasticity of supply.

Price of a commodity falls from Rs.4 to Rs.3 per unit. As a result total expenditure on it rises from Rs.400 to Rs.600. Find out the price elasticity of demand by percentage method. How does change in price of one good affect the budget line? Discuss the relationship between AC and MC. OR Only a rising segment of MC curve starting from the shut down point is considered as a short period supply curve of a firm. Explain.

4 6 6

Q14 Explain diminishing returns to factor and constant returns to factor with the help of table and diagram. Discuss the causes for application of these returns. Q15 Define consumers equilibrium. How does a consumer reach the state of equilibrium while buying two commodities? Q16 How do the following conditions affect the equilibrium price of the commodity--

a) Increase in input price

b) Decrease in income

OR
6

Define equilibrium price. How is it determined under perfect competition? Explain the effect of increase in demand of a commodity on its equilibrium price? Section B Q17 Q18 Q19 Q20 Q21 Q22 Introductory Macro Economics

What do you mean by involuntary unemployment? Define rationing of credit. If planned savings are less than planned investment, what will be the effect on inventories? What do you mean by regressive taxes? Define fiduciary money.

1 1 1 1 1

A imports goods worth Rs.50, exports goods worth Rs.120 and sells goods to B worth Rs.40. B sells goods to households worth Rs.60. C sells goods to D worth Rs.40 and to households worth Rs.10. D exports goods worth Rs.150 and sells goods to Govt. worth Rs.120. Find gross value added by all the firms. 3

Q23 Q24 Q25 Q26 Q27 Q28 Q29 Q30

Explain the effect of depreciation of domestic currency on exports. Explain narrow and broad definition of money. Define money supply. Explain the various measures of money supply. OR

3 3 3 3 4 4 4

Can there be a fiscal deficit in government budget without revenue deficit? Explain. How are quantitative instruments of Central bank used to control money supply? Explain consumption function with the help of table and diagram. OR What fiscal measures are suggested to correct the situation of deflationary gap? Explain revenue expenditure and capital expenditure in a government budget. Give two examples of each. Define BOP on capital account. Explain three components of Capital Account? State whether the following statements are true or false. Give reasons for your answers. a) Bonus paid by employer to employee is a part of domestic income. b) Nominal GDP can never be less than real GDP. c) Capital formation is a flow. d) Gift by employer to employee is a part of compensation of employees. e) Gross domestic capital formation is always greater than gross fixed capital formation. f) Import of machinery is recorded in capital account of balance of payments. Discuss how equilibrium level of income and output is determined under Keynesian framework.. OR In an economy the equilibrium level of income is Rs.15,000 crores. The ratio of MPC to MPS is 3:1. Calculate the additional investment needed to reach a new equilibrium level of income of Rs.25,000 crores.

Q31

Q32

Find out GDPMP and Factor income to abroad:Items 1. GNPFC 2. Net exports 3. Compensation of employees 4. Rent 5. Interest 6. Profits 7. Royalty 8. Indirect taxes 9. Gross domestic capital formation 10. Subsidies 11. Factor income from abroad 12. Dividend 13. Net fixed capital formation 14. Change in stock 15. Retirement Pension Rs.(in crores) 1850 (-)50 1000 100 250 400 50 200 220 100 30 200 150 20 100