( Word to PDF Converter - Unregistered ) http://www.Word-to-PDF-Converter.net MODEL QUESTION PAPER HSE II ECONOMICS SCORE : 80 2.

5 Hrs

1. Classify the following into Micro economics and Macro Economics. (Score-3) Demand analysis, Consumption function, Theory of international trade, Income determination, Pricing of factors of production, Investment function. 2.State whether the following statements are true or false.Justify your answer. (Score-2) TC never becomes zero. AC is sum total of AFC andAVC. Price leadership is an important feature of monopoly. Duopoly is a market situation in which two buyers buy the commodity. 3.Perfect competition does not exist in the real world. Do you agree? Substantiate your view. (Score-2) 4.The circular flow of income in a two sector economy is given below. (Score-6)

FIRM

A. Complete the Diagram. B. Explain the process of circular flow. C. 5. Find the odd one out and justify your answer. (Score-4) A. single seller. Price maker, Selling cost, Control over supply. B.Income of a family, Production of rice, Gross domestic saving, Profit of a firm. C. Bankers bank, Custodian of foreign exchange reserves, Credit creation, Lender of last resort. D.Income tax, sale tax, excise duty, wealth tax. 6.Define the concept opportunity cost by giving suitable examples. (Score-1)

( Word to PDF Converter - Unregistered ) http://www.Word-to-PDF-Converter.net 7. Differentiate between fixed exchange rate and flexible exchange rate? (Score-4). 8. Classify the following in to current account and capital account. (Foreign direct investment, Borrowing from abroad, Export earning from merchandise, export earning from banking services,Earning from tourism, Foreign port folio investment). (Score-3) 9. How does technological progress affect the supply curve of a firm? (Score-2). 10. Prepare a seminar report on non competitive marketing. (Score-6). 11. In the present world, budget is an important instrument of Government policy.One of the objectives of the budget is given below. Supplement the other objectives. (Score-3) a). Distribution of income and wealth. 13. The consumer has an income of Rs.100. He wants to consume two goods X and Y . Price of X and Y is Rs 20 and 10 respectively. (Score-5) a) State the equation of the budget line. b) How much of good X he can buy if he spend entire income on good X. c) How much of good Y he can buy if he spend entire income on good Y . 14. Suppose that for a particular economy,investment is equal to 200, Government purchases 150,net taxes ( that is lump-sum taxes minus transfer )is 100 and consumption is given by C=100+.75Y. a) What is the level of equilibrium income? b) The value of government expenditure multiplier and the tax multiplier. c) If government expenditure increases by 200, find the change in equilibrium income. (Score-6). 15. Show diagrammatically how equilibrium price quantity change whena) Demand curve shift to left. b)Supply curve shift to right. (Score-4) 16.TFC of a firm is Rs 2000 and TVC is Rs 3000. It produces 20 units. Calculate the AVC and AC of the firm. (Score-3). 17.Suppose the demand and supply curve of commodity X in a perfectly competitive market are given by qD=700-P

( Word to PDF Converter - Unregistered ) http://www.Word-to-PDF-Converter.net qS= 500+3p for P 15 =0 for 0 P<15 A) What is the significance of P=20? B) At what price will the market for X be in equilibrium? State the reason for your answer. C) The equilibrium quality and number of firms. (Score-4) 18. A producer reaches equilibrium, when he get maximum profit. (Score-4) MC Revenue/ E cost MR=AR=Price

M1 Out put

A Producer reaches equilibrium,when he gets maximum profit . 1)State the conditions 2)Locate the equilibrium in the given diagram. 19How does money over come the shortcomings of a barter system. (Score-4) 20. From the following data, calculate personal income and personal disposable income. Net domestic product at factor cost : 8000 Net factor income from abroad : 200 Un disbursed profit : 1000 Corporate Tax : 500 Interest received by Households : 1500 Interest paid by Households : 1200 Transfer income : 300 Personal Tax : 500 (Score-4) 21.Suppose income of individual A increase from Rs: 1000 to Rs: 1100. So his consumption raises from Rs: 750 to Rs:825. Find out MPS and MPC. (Score-5 ). 22.Match the following. (Score 5) A Bretton wood system SDR B Pegged rate Dollar accumulation

( Word to PDF Converter - Unregistered ) http://www.Word-to-PDF-Converter.net Fixed exchange rate Triffin dilemma Flexible exchange rate 1944 Flooting rate 1967