1. | (a) | Answer the following : | 1x9=9 | |
| | (i) | Micro economics is also knows as: (A) | Product theory | (B) | Price theory | (C) | Process theory | (D) | Projection theory | | | (1) |
| | (ii) | Demand can be defined as: (A) | Desire to buy | (B) | Willingness to buy | (C) | Ability to pay | (D) | Desire and willingness to buy backed by adequate purchasing power. | | | (1) |
| | (iii) | In case of normal goods the income effect is: (A) | Zero | (B) | Positive | (C) | Negative | (D) | None of the above | | | (0) |
| | (iv) | The formula E = | | = | | represents: |
(A) | Cross – elasticity of demand for Y | (B) | Price – elasticity of demand for X | (C) | Cross – elasticity of demand for X | (D) | None of the above. | | | (0) |
| | (v) | When the utility is increasing at an increasing rate, marginal utility is: (A) | Constant | (B) | Negative | (C) | Increasing | (D) | Decreasing | | | (0) |
| | (vi) | Consumer's surplus is also known as; (A) | Elasticity of demand | (B) | Differential surplus | (C) | Buyer’s surplus | (D) | Indifference surplus | | | (0) |
| | (vii) | ‘The law of diminishing return is applied to all fields of production’. This statement was given by: (A) | Walras | (B) | A. C. Pigou | (C) | Alfred Marshall | (D) | David Recardo | | | (0) |
| | (viii) | Under perfect competition a factor will be demanded up to the point: (A) | Where its MRP is more than its price | (B) | Where its MRP equals its price | (C) | Where its ARP equals its price | (D) | Where MRP increases and price falls | | | (0) |
| | (ix) | Monopolist can determine: (A) | Price | (B) | Output | (C) | Either price or output | (D) | None of the above. | | | (0) |
| (b) | Fill in the blanks : | 1x12=12 | |
| | (i) | Complementary goods like tea and sugar have a __________ cross elasticity, | | (0) |
| | (ii) | Indifference curve slopes __________. | | (0) |
| | (iii) | For more production on land, if we are using more quantities of labour and capital, it would be termed as ___________. | | (0) |
| | (iv) | Firms in a monopolistic market are price___________. | | (1) |
| | (v) | Nominal GDP grows faster than the real GDP because of __________. | | (0) |
| | (vi) | To remove inequalities, the government uses ___________ taxes, | | (0) |
| | (vii) | When prices are falling continuously the situation is known as ___________. | | (0) |
| | (viii) | The cash reserve ratio is usually determined by __________ . | | (0) |
| | (ix) | __________ is the founder of Macro Economics. | | (1) |
| | (x) | Labour cannot be separated from __________. | | (0) |
| | (xi) | Formula for calculating optimum population is ___________. | | (0) |
| | (xii) | Paper Gold is also called ___________. | | (0) |
| (c) | State which of the following statements is true and which is false: | 1x9=9 | |
| | (i) | Deductive method is also known as abstract, analytical and priori method. | | (0) |
| | (ii) | Demand for a commodity refers to quantity demanded of that commodity, | | (0) |
| | (iii) | Total utility is maximum when marginal utility is at its highest point, | | (0) |
| | (iv) | A monopolist is able to maximise his profit when his average cost is minimum, | | (0) |
| | (v) | Inflation has positive impact on debtors and businessmen. | | (0) |
| | (vi) | In traditional sense, money serves neither as medium of exchange nor store value, | | (0) |
| | (vii) | Banks discourage saving habits among people. | | (0) |
| | (viii) | In order to encourage investment in the country, the RBI may increase CRR. | | (0) |
| | (ix) | Economic laws are not exact, certain and definite. | | (0) |
| (d) | Define the following terms in not more than two lines: | 1x6=6 | |
| | (i) | Deficit Financing | | (0) |
| | (ii) | Progressive Tax | | (0) |
| | (iii) | Bank Rate | | (0) |
| | (iv) | Gresham’s Law | | (0) |
| | (v) | Balance of Payment | | (0) |
| | (vi) | Quasi–rent | | (0) |
2. | Write short notes on the following: | 4x3=12 | |
| (a) | Determinants of Demand | | (0) |
| (b) | Features of oligopoly | | (0) |
| (c) | Criticism of Ricardian Theory of Comparative Cost | | (0) |
3. | Discuss the importance of shutdown point in perfect competition. In this context do you think that short period closure of firms is ruled out? | 12 | (0) |
4. | Distinguish between balance of trade and balance of payments. What is meant by disequilibrium in balance of payments? Suggest methods for correcting adverse balance of payments. | 12 | (0) |