Explain the law of demand with a suitable diagram

What is the law of Supply? What are the determinants of Supply?

Explain the role of Prisoners Dilemma in understanding an Oligopoly market. What does the Nashs equilibrium
indicate?

List and explain the four components of GDP. Why are shares and stocks not included in GDP calculations?

What is CPI? What are the steps involved in calculating CPI.

What are the features of firms in a competitive market? Under what conditions will the firms (1) Shut down
temporarily and (2) Exit the market

Explain three reasons behind Aggregate Supplys upward sloping curve

What is money? What are the functions of money? How does a Central bank control money supply in the economy ?

Explain the short run trade-off between inflation and unemployment using the Phillips curve. When does the Phillips
curve become vertical?

List and describe four determinants of productivity

Explain Nominal and Real Exchange Rates and the concept of Purchasing Power parity with suitable example.

Draw a circular-flow diagram representing the interactions between households and

firms in a simple economy. Explain briefly the various parts of the diagram.
Use a graph to demonstrate the circumstances that would prevail in a competitive
market where firms are earning economic profits. Can this scenario be maintained
in the long run? Carefully explain your answer
What is the difference between a "change in demand" and a "change in quantity
demanded"? Graph your answer. Also Explain what factor/s will cause change in
demand and what factor/s will cause change in quantity demanded
Explain the three main reasons responsible for monopoly
Explain price elasticity of demand and the income elasticity of demand. Also
explain the determinants of the price elasticity of demand.
Explain the following terms for oligopoly market
(i)indeterminateness of demand curve
(ii) interdependence of firms
What is income effect and substitution effect caused by a change in the price of a
good?
List out four components of GDP. Give an example of each
What are the problems in measuring the cost of living?
Why is productivity related to the standard of living? In your answer be sure to
explain what productivity and standard of living mean. Describe determinants of
productivity.
How interest rate is determined? Explain the effect of following policy changes on
market interest rate.
(i)saving incentives (ii)investment incentives
Explain the concept of multiple creation of deposits under fractional reserve system
According to the fisher effect, how does an increase in the inflation rate affect the
real interest rate and the nominal interest rate?
Discuss why aggregate demand curve is downward sloping.
Using Demand-and-supply diagrams show the effect of a fall in production of
sugarcane on the price and quantity of sugar during the Diwali months (when
demand for sugar increases).
Use the theory of liquidity preference to explain how a decrease in the money
supply affects the aggregate-demand curve
Given the unpopularity of inflation, why doesnt the government always support
efforts to reduce inflation? Many economists believe that countries can reduce the
cost of disinflation by letting their central banks make decision about monetary
policy without interference from politicians. Why might this be so?

Draw the demand, marginal revenue and marginal cost carves for a
monopolist. Show the profit maximizing level of output & price.

Explain the relative version of purchasing power parity theory and describe
the economic logic behind this theorem.

Explain and Draw a Production Possibilities Frontier for an Indian Economy

that produces Wheat & Rice.

What is the Prisoners dilemma and what does it have to do with Oligopoly

Discuss four determinants of productivity

Explain what is competitive firm and under what conditions will a firm exit a
market?
What are the costs of inflation? Which of these costs do you think are most
important for the Capitalistic Economy

Distinguish between monopolistic and perfect competition.

Differentiate between income effect and substitution effect caused by change

in the price of commodity.

Describe the three problems that make the consumers price index and
imperfect measure of the cost of living.

Describe the four components of G.D.P. Give an example of each.

What is the liquidity preference? How does it help explain the downward
slope of the aggregate demand curve.

Draw the short run trade - off between inflation and unemployment. Explain
how the short - run and long run trade offs are related.

Explain the three reasons for the aggregate demand curve is downward
sloping.

Give an example of a Govt. policy that acts as an automatic stabilizer.

Explain why the policy has this effect.

The study of economics has many facets and the field is unified by several central ideas
regarding decision making of peoples, their interaction and the working of economy as
a whole- Explain.

Write a detail note on production possibilities frontier.

The price elasticity of demand determines whether the demand curve is steep or flat -
How? You also need to explain all five cases of price elasticity

How a firm operating in competitive market can maximize its profit in short run?
Explain.
What is monopoly? Which are the reasons for arising of monopoly situation?

Draw diagrams depicting the long run equilibrium position of monopolistically

competitive firm and perfectly competitive firm. How they are different from each
other?

What is prisoners dilemma and what does it have to do with oligopoly?

Why is a monopolists marginal revenue less than the price of good? Can marginal
revenue ever be negative? Explain.

Describe the three problems that make the consumer price index an imperfect measure
of cost of living.

In monopolistic competitive market, how might advertising reduce economic well

being? How might advertising increase economic well- being?

Show a consumers budget constraints and indifference curve for wine and cheese.
Show the optimum consumption choice.

Why do economists use real GDP rather than nominal GDP to gauge economic wellbeing?

Use the theory of liquidity preference to explain how a decrease in the money supply
affects the aggregate demand curve.

Why dont banks hold 100 percent reserves? How is the amount of reserves banks hold
related to the amount of money the banking system creates?

Draw the long run trade off between inflation and unemployment. Explain how the
short run and long run trade offs are related.

Draw a circular-flow diagram representing the interactions between households and

firms in a simple economy. Explain briefly the various parts of the diagram.

Use a graph to demonstrate the circumstances that would prevail in a competitive

market where firms are earning economic profits. Can this scenario be maintained
in the long run? Carefully explain your answer
What is the difference between a "change in demand" and a "change in quantity
demanded"? Graph your answer. Also Explain what factor/s will cause change in
demand and what factor/s will cause change in quantity demanded

Explain the three main reasons responsible for monopoly

Explain price elasticity of demand and the income elasticity of demand. Also
explain the determinants of the price elasticity of demand.

Explain the following terms for oligopoly market

(i)indeterminateness of demand curve
(ii) interdependence of firms

What is income effect and substitution effect caused by a change in the price of a
good?

List out four components of GDP. Give an example of each.

What are the problems in measuring the cost of living?

Why is productivity related to the standard of living? In your answer be sure to

explain what productivity and standard of living mean. Describe determinants of
productivity.

How interest rate is determined? Explain the effect of following policy changes on
market interest rate.
(i)saving incentives (ii)investment incentives

Explain the concept of multiple creation of deposits under fractional reserve system.

According to the fisher effect, how does an increase in the inflation rate affect the
real interest rate and the nominal interest rate?

Discuss why aggregate demand curve is downward sloping.

Using Demand-and-supply diagrams show the effect of a fall in production of

sugarcane on the price and quantity of sugar during the Diwali months (when
demand for sugar increases).

Use the theory of liquidity preference to explain how a decrease in the money
supply affects the aggregate-demand curve

Given the unpopularity of inflation, why doesnt the government always support
efforts to reduce inflation? Many economists believe that countries can reduce the
cost of disinflation by letting their central banks make decision about monetary
policy without interference from politicians. Why might this be so?

The cost of producing DVD players has fallen over the past several
years. Lets consider some implications of this fact.
i. Draw a supply-and-demand diagram to show the effect of
falling production costs on the price and quantity of DVD
players sold.
ii. In your diagram, show what happens to consumer surplus
and producer surplus.
iii. Suppose the supply of DVD players is very elastic. Who
benefits most from falling production costs?

Several studies have found that the overall demand for automobiles
has an elasticity of about 1.3
i. How do you interpret this coefficient?
ii. After knowing about these results, a Ford dealer in
Ahmedabad cut his price by 10 percent and sold 22
percent more cars. What is the elasticity of demand in
this case? Does this mean the estimate of 1.3 is
incorrect? Explain.

Explain the circular flow of income model. Identify the parts of the
model that correspond to the flow of goods and services and flow
of money for each of the following activities.
i. Leena buys onion for Rs. 10.
ii. Mr. Sameer is paid Rs. 2000 as an honorarium for
delivering a guest lecture at an MBA institute.
iii. Prerna pays Rs.100 at Fun Republic to watch a movie.

What are the determinants of an individual demand and an

individuals supply of a commodity?

Define total cost, average total cost and, and marginal cost. How
are they related?

What is prisoners dilemma and what does it have to do with

Oligopoly?

Explain how the higher rate of savings, investment and policy of

open economy influence the GDP growth?

Under what conditions a competitive firm shuts down temporarily

and exits permanently? Explain with help of a diagram.

Describe the four components of GDP, giving example of each.

Explain the following concepts:

i. Stagflation
ii. Catch-up effect

Explain the difference between nominal and real variables and

give two example of each. According to the principle of
monetary neutrality, which variables are affected by changes in
the quantity of money?

Explain the following concepts:

i. Crowding out
ii. Inflation Tax

Describe the economic logic behind the theory of purchasing

power parity.

Explain the short run trade-off between inflation and

unemployment.

What is government budget deficit? How does it affect interest

rate, investment and economic growth?

Why are some economists against a target of zero inflation?

Explain the three theories in brief for the upward sloping aggregate
supply curve.

Explain the concept of price discrimination. Why a seller chooses to follow this business strategy?
Give two examples of price discrimination.

Draw a consumers indifference curves for Pepsi and Pizza. Describe and explain four properties
of this indifference curve.

Describe the four components of GDP. Give an example of each

What is resale price maintenance and why is it controversial?

Explain with diagram price determination under perfect competition, if a competitive firm is in
short run equilibrium.

What is the Prisoners Dilemma and what does it have to do with Oligopoly.

Explain the relationship among saving, investment and net-capital outflow.

Explain why the long run aggregate supply curve is vertical?

Explain how does population growth affects a society.

What is the role of the financial system? Name and describe two markets that are part of the
financial system in the US economy.

Write a short note on the Crowding out effect.

Define money. Discuss the role of money in a modern capitalist economy.

Write a note on the Volcker Disinflation.

Write your comments on Should fiscal policymakers reduce the govt. debt.
Define consumers surplus and producer surplus. Write a note on its utility for business decisions.

Wholesale Price Index (WPI) is not a perfect measure of cost of living.

Discuss.

The study of economics has many facets and the field is unified by
several central ideas regarding decision making of peoples, their
interaction and the working of economy as a whole- Explain.

Describe the economic logic behind purchasing power parity theory.

Why aggregate supply curve slopes upward in short run? Explain.

If price of Navy Submarine rises, is the CPI or GDP deflator affected

more? Why?

How fiscal policy influences aggregate demand?

What are the variables that can shift the demand curve? Discuss.

What is price elasticity of demand? Explain in detail.

Ink Pens and pencils are substitutes. When the price of an ink pen falls,
what happens to the supply, demand, quantity supplied, quantity
demanded, and price in the market for pencils.

Should Tax laws be reformed to encourage the savings? Give reasons.

What gives the government the power to regulate mergers between

firms? From the standpoint of the welfare of society, give pros and cons
that two firms might want to merge.

Explain economies and diseconomies of scale and explain why they

might arise.
Why do competitive firms stay in business if they make zero economic
profit? Discuss.

Why might the short run aggregate demand curve shift?

What are the controversies over the Antitrust Policy? Discuss.

Explain the shift in the demand curve. List and explain the most important
variables that can shift the demand curve.

Explain, what competitive firm is and under what conditions will a firm
shutdown temporarily?

Draw the Circular Flow diagram and Explain why an economys income must
equal to its expenditure

Explain the reason why aggregate demand curve is downward slopping.

What is Natural about the natural rate of unemployment? Why might the
natural rate of unemployment differ across countries?

Define & explain the income elasticity of demand and the cross price elasticity
of demand with suitable example.

What is monopoly? Why monopolies arise?

What is CPI? List the steps involved in calculation of CPI. Briefly explain the
three problems in measuring the cost of living.

How change in Govt. purchases influences the aggregate demand of loanable

funds.

How and why does a firms average-total-cost curve differ in the short run and
in the long run? Explain economies of scale and diseconomies of scale.
Define Duopoly and explain collusion and cartel. How and size of an
oligopoly affects market outcome

Why productivity is so important? List and describe the determinants of

Productivity

How the Phillips curve is related to the model of aggregate demand and
aggregate supply

Draw the Marginal Cost and Average Total Cost Curves for a typical firm.
Explain why the curves have the shapes that they do and why they cross where
they do.

Differentiate: Monopolistic Competition and Perfect Competition

Answer the following

1. Explain three key facts about economic fluctuation
2. Explain The Sticky Price Theory & The Sticky-Wage Theory

Explain the following concept

1. Purchasing Power Parity
2. Real Exchange Rate & Nominal Exchange Rate

Price stability and creating employment opportunities are two important goals of any
countrys macroeconomic policy. Is there any trade off in short run and long run? Explain.

Sneha views butter and cheese as perfectly 07

substitutable for each other.

a) Draw a set of indifference curve that describes Snehas

preferences for butter and cheese.

b) If butter costs rupees 20 per package while cheese cost rupees

10 and Sneha has a budget of only rupees 200/- to spend a

month, which butter-cheese market will she choose. Explain
with the help of a proper schedule and graph.
 Pharmaceutical drugs have an inelastic demand and computers have an elastic demand.
Suppose that technological advance doubles the supply of both products (that is the
quantity supplied at each price is twice what it was )
a) What happens to the equilibrium price and quantity in each market?
c) Which product experiences a larger change in price ?
d) Which product experiences a larger change in quantity ?
e) What happens to total consumer spending on each product?

What are the components of GDP? Explain each with the help of an example.

Explain the concept of inflation. Describe the different types of costs associated with inflation. In your opinion, what
is more harmful, inflation or unemployment? Justify your answer.

Explain how Consumer Price Index is calculated. Describe the difference between the GDP deflator and CPI.

Explain the role that banks play in the monetary system through the money multiplier. Explain the Reserve Banks
tools of monetary control.

Suppose the Federal Government expands the money supply, but because the public expects this action, it
simultaneously raises its expectation of the price level. What will happen to output and the price level in the short
run? Compare this result to the outcome if the Federal Government expanded the money supply but the public didnt
change its expectation of the price level.

What is happening to the India real exchange rate in each of the following situations? Explain.
a) The India nominal exchange rate is unchanged, but prices rise faster in India than abroad.
b) The India nominal exchange rate is unchanged, but prices rise faster abroad than in India.
c) India nominal exchange rate declines, and prices are unchanged in India and abroad.
d) India nominal exchange rate declines, and prices rise faster abroad than in India.

Suppose a society decided to reduce consumption and increase investment.

a) How would this change affect economic growth?
b) What groups in society would benefit from this change? What groups in society would be adversely affected?
You are curator of a major art museum. Your director of finance tells you that the museum is running short of funds
and suggests that you consider changing the price of admission to increase total revenue. What do you do? Do you
raise the price of admission, or do you lower it? Justify your answer with an explanation.

Distinguish between demand function and demand curve.

Draw the circular flow diagram and explain why an economys income
must equal to its expenditure.

Discuss why aggregate demand curve is downward slopping.

What is the income effect and substitution effect caused by a change in

the price of a good?

Define price elasticity of demand and the income elasticity of demand.

Explain the significance of thee concepts in an Automobile Industry.

What is the difference between change in demand and change in

quantity demanded? What are the factors which determine change in
demand and change in quantity demanded

Distinguish between monopoly and monopolistic competition.

What is the prisoners dilemma and what does it have to do with

Oligopoly?

Explain economies and diseconomies of scale and explain why they

arise?

Discuss why competitive firms stay in business if they make zero

economic profit.

What are the problems in measuring the cost of living?

Write a detail note on Production Possibility Frontier.

Why the concept of real GDP is more famous than the concept of
nominal GDP amongst the economists?

Discuss the Purchasing Power Parity theory.

Explain the role of Fiscal Policy influencing aggregate demand.

Explain the impact of inflation on various sections of society

Is it always possible to achieve the two macroeconomic goals of low

inflation and low unemployment?

Distinguish between Real Exchange Rate and Nominal Exchange

Rate.

Explain with reasons the concepts of movement along the demand curve and
movement of the demand curve. List and Explain the factors causing a shift in
demand curve.

Describe the concept of Equilibrium Firm and explain the short run price and
output determination of a firm under monopolistic competition.

Define Price Elasticity of Demand and explain the factors affecting price
elasticity of demand with its managerial implications in determining the price of a
product.

Explain the economic model of Circular Flow of Income and Expenditure and
explain how disequilibrium between income and expenditure affects the general
price level of the economy.
 Explain the nature of demand curve diagrammatically in perfect competition,
Monopolistic competition, monopoly and oligopoly. How this feature of market
helps in pricing decisions of a firm.

Explain the following concepts

1. Average cost & Marginal Cost with the help of table and diagram
2. GDP and its Components

Define Cost of Living Index. Explain the steps in the calculation of Cost of
Living Index. State the problems involved in its calculation.

Write short notes: 1. Price Leadership 2. Liquidity Preference Theory

Define Inflation. Suggest with justification appropriate fiscal and monetary

measures used to control inflation in a developing economy.

Define Price Discrimination. Under which circumstances this business strategy

becomes possible and profitable

Explain the Principle of Effective Demand. Explain the process of determination

of aggregate output and aggregate income in the economy.

What are the determinants of Aggregate Demand Function and Aggregate Supply
Function? Explain the effects of these determinants in ADF and ASF.
 What is the Prisoners Dilemma? Explain how it helps in explaining the
oligopolistic behavior.

Under which economic condition the aggregate demand need to be increased?

Explain the various fiscal and monetary measures to increase the aggregate
demand in the economy.

List and explain the steps involved in calculation of the Consumer Price Index

Among monopoly, oligopoly, monopolistic competition, and perfect competition, how would you classify the
markets for each of the following? Explain with reasons.
1) Indigo airlines in India
2) Coca-cola in India
3) Packaged Tea market of India
4) Indian Railways
5) Vegetable market

What is Gross Domestic Product? What does it indicate? How does it differ from Gross National Product?

What is Cash Reserve Ratio? Explain multiple credit creation by Rs.10,000 deposited ( primary deposit) in a
commercial bank with 10% CRR.

Define economies of scale and explain why they might arise. Define diseconomies of scale and explain why they
might arise.

What is Purchasing Price Parity? Explain its implication with a suitable example.

List and describe four determinants of productivity

What is multiplier effect? Explain how changes in the Government purchases cause a Multiplier effect? Discuss by
giving any examples of your choice.
List and explain the three theories for why the short run aggregate supply curve is upward sloping.

Differentiate between long-run equilibrium under perfect competition

and long- run equilibrium under monopolistic competition.

Explain how the Consumers Price Index is calculated. Describe the

difference between the Gross Domestic Product Deflator and the
Consumers Price Index.

Draw the long run trade-off between inflation and unemployment.

Explain how the short-run and long run trade-off are related.

Explain why Aggregate Demand Curve slopes downward?

Explain the available supply shock. Use the model of aggregate demand
and aggregate supply to explain the effects of such a shock of economic
system. Draw appropriate diagram.

Discuss three principles of economics concern the working of economy

as a whole.

Explain the concept of Price Discrimination. Why a setter chooses to

follow this business strategy?

What is the Theory of liquidity preference? How does it help explain the
downward slop of the aggregate demand curve?

Describe the four Determinants of Productivity.

Define Nominal Exchange Rate & Real Exchange Rate and explain how
they are related.

What is the Prisoners Dilemma & What does it have to do with

Oligopoly? Give Example other than Oligopoly to show how the
Prisoners Dilemma helps to explain behavior.
What are the Determinants of Supply?

Write a note on Volckers Disinflation.

What is Production Functions? How does long run production function

differ from a short run production function?

Define Returns to Scale. Explain various economies and diseconomies of scale.

Explain the short run trade-off between inflation and

unemployment

Define GDP and explain how it is influenced by higher rate of savings,

investment and policy of open economy.