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MODEL QUESTION PAPER Time : 2.45 Hours HSE I I ECONOMICS Marks : 80 ********************************************************************* I Pick the odd man out and justify your answer a. b. II a. b. c. d. III 1 . 2 . 3 4 . 5 . Public expenditure, taxation, public debt, credit rationing. Large number of firms, product differentiation, selling cost, price maker. Give one word for the following. Marginal cost that cuts minimum point of the AVC. Price of one currency in terms of another currency. Upper limit on the price of a good imposed by the Government. The wear and tear of capital. Match column A with B and C. Keynes Indifference curve 1/1 MPC Multiplier (2)

(4) (5)

Rectangular hyperbola Heavy vehicles ED = 1 MRS 1936.

Duopoly The General Theory Unitary elastic dd Two sellers Samuelson 1/MPS

IV

Classify the following features in a table under the titles - certralised planned economy and market economy. Comprehensive planning, Price mechanism, Profit motive, Welfare motive, Public sector, Private sector. (3) Due to mudbank (chakara) the price of fish falls form Rs.40 a kg to Rs.20. Consequently, the market demand rises from Rs.1000Kg. to 3000Kg. Calculate the price elasticity. Which degree of elasticity is this? (3)

VI

Complete the following table and show relationship between AC and MC in a diagram. (8) Quantity TFC TVC TC AFC AVC AC MC

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0 1 2 3 4 5

50

0 20 28 36 44 50

2 VII Frame the structure

Govt. Budged

Revenue Budget

Revenue Budget

Revenue Expenditure

Capital

VIII

(4) Illustrate with the help of a diagram why firms are considered as price takers in perfect competition. (6)

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IX

Complete the table to show the distinction among Monopoly, Monopolistic competition, perfect competition and oligopoly. (7) Monopolistic Perfect Points of distinction Monopoly Oligopoly Competition Competition Number of forms Nature of product Price Freedom of entry and exist Shape of demand curve

X The value of the nominal G N P of an economy was Rs.2500 crores in a particular year. The value of G N P of that country during the same year evaluated at the prices of same base year was Rs.3000 crores. Calculate the value of the G N P deflator of the year in percentage terms. Has the price level risen between the base year and year under consideration. (3) XI XII XIII Prepare a seminar report on the instruments of Monetary Policy. Define High Powered Money. (8) (2)

In an economy M P C is 0.75, calculate M P S and multiplies. What will be the increase in income. When there is an increase in investment of Rs.100 crores. (3) 3 Given below is the average cost curve of a firm. Draw the Marginal cost curve showing the relationship between AC and MC (2) AC O Output X

XIV

XV XVI a) b) c) d)

Draw a circular flow of income in a simple economy? Explain the different types of flows. (4) Define the following concepts . Budget line Personal disposable income Production function Normal profit (4)

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XVII Illustrate graphically how exchange rate is determined under. 1) Fixed exchange rate (2) Flexible exchange rate.

(6)

XVIII Suppose the demand and supply curve of salt are given by qd = 1000 , qs = 700 + 2P. Find the equilibrium price and quantity. (4) XXI Classify the following into micro and macro concept. Per capita income, General price level, Salary of Mr. Raju,, Profit of B S N L. (2)

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