| 1. |
(a) |
State, with reasons, whether the following statements are true or false :
| (i) | Elasticity of demand for salt is almost zero. |
| (ii) | Substitution effect is always positive. |
| (iii) | The average revenue curve of an individual firm under perfect competition is a horizontal straight line. |
| (iv) | Constant return to scale implies that an increase in the scale in some proportion results into an increase in the output in the same proportion. |
| (v) | Fixed wage earners suffer both in inflation and deflation. |
|
| (3 marks each) |
|
(b) | Differentiate between ‘micro-economics’ and ‘macro-economics’. Are they complementary to each other ? |
| (10 marks) |
| 2. | (a) | With the help of suitable schedule and diagram, show the relationship between total, fixed and variable costs in the short-run. |
| (7 marks) |
|
(b) |
What is meant by ‘perfect competition’ ? State, with reasons, whether it is attainable. |
| (8 marks) |
| 3. |
(a) |
“Discriminating monopoly is profitable, if two markets have different elasticity of demand.” Explain with the help of diagrams. |
| (7 marks) |
| (b) | What is ‘national income’ ? Is it a reliable index of economic welfare ? |
| (8 marks) |
| 4. | (a) | Give the statement of quantity theory of money. Explain it with the help of Cambridge Equation. |
| (7 marks) |
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: 2 :
|
(b) |
Briefly explain the following :
| (i) | Marginal propensity to consume. |
| (ii) | Ill-effects of inflation. |
|
| (4 marks) |
| 5. |
(a) |
Discuss the merits and demerits of the Ricardian Theory of comparative advantages. |
| (7 marks each) |
|
(b) |
What is meant by ‘exchange rate’ of currency ? How is its equilibrium rate determined in the market ? |
| (8 marks each) |
| PART – B |
| (Answer ANY TWO questions from this part.) |
| 6. | (a) | Explain the role of government in infrastructure development. |
| (7 marks each) |
| (b) | Discuss the salient elements of business environment of a firm. |
| (8 marks each) |
| 7. | (a) | Write a detailed note on population growth in India. |
| (7 marks each) |
|
(b) |
What do you mean by ‘mixed economy’ ? Narrate the structure of mixed economy of India. |
| (8 marks each) |
| 8. |
Write notes on any three of the following : |
|
(i)
(ii)
(iii)
(iv) |
Non-banking finance companies
Financial sector reforms
Government subsidies
Industrial sickness. |
|
| (5 marks each) |
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