Dev Academy of Science and Commerce

March Examination
12th Economics
(Part-1) M.M.80
(Micro Economics)
(Objective Type Questions) 1X8=8
1. (i) On which commodities the low of demand is applicable?
(A) Giffen goods (B) Normal goods (C) Substitution goods (D) Article of distinction.

(ii) Indifference curve is_________ to the origin.

(A) Concave line (B) Straight line (C) Convex line (D) None of these

(iii) MC curve cuts AC curve when:

(A) AC curve is falling (B) AC curve is rising (C) AC curve is minimum (D) None of these

(iv) Under condition of perfect competition the firm is in equilibrium.

(A) MC = TR (B) MC = MR (C) MC = TC (D) AR = AC

(v) How many degrees the price elasticity of demand have?

(A) 7 (B) 5 (C) 12 (D) 3

True and False

(vi) Average cost curve is U-shaped.
(vii) Supply can be more than stock.
(viii) 'Giffen goods' is an exception to the law of demand.

(Very Short answer Type Questions) 2X4=8

2. What is microeconomics?
3. What is the meaning of demand?
4. What is the law of supply?
5. Write any two features of monopoly?
(Short answer Type Questions) 4X3=12
6. What is the difference between microeconomics and macroeconomics?
7. Explain any four differences between monopoly and monopolistic competition.
8. Distinguish between extension of supply and increase in supply with the help of diagrams.

(Long answer Type Questions) 6X2=12

9. What is perfect competition? Discuss short run equilibrium of the firm in perfect competition by marginal approach?
10. What is law of demand? Why does this law Operates?

(Part-2)
(Objective Type Questions) 1X10=10
11. Loan granted by Central government of India to the state government is termed as ______ for the central govt.
(A) Revenue expenditure (B) Capital expenditure (C) Revenue receipts (D) Capital receipts
12. Fiscal deficit of the government is equal to _______.
(A) Landing (B) interest payments (C) Borrowings (D) Primary deficit
13. When foreign exchange rate rises, the demand for foreign exchange _______.
(A) Rises (B) false (C) remain constant (D) may rise or fall
14. Other thing remaining unchanged, when in a country the price of domestic currency raises national income is expected to
(A) Rise (B) Fall (C) remain constant (D) may rise or fall
15. Balance of payments is in surplus when _________.
(A) Credit > Debit (B) Credit < Debit (C) Credit = Debit (D) None of these
16. Economic transactions is BOP includes
(A) Visible trade (B) invisible trade (C) capital transfers (D) all of these
17. Name two components of money supply?
18. If reverse ratio is reduced, then what is its effect on money supply?
19. What are the causes of inflow of foreign exchange?
10. Increase in foreign exchange reserves will be recorded in which account and which side of BOP?
 (Very Short answer Type Questions) 3X2=6
11. What is marginal propensity to consume (MPC)? How is it related to marginal propensity to save?
12. If an economy C = 200+0.75y is the conjunction function, where she is the consumption expenditure and why is national
income. Investment expenditure is Rs 4000. Calculate equilibrium level of income and consumption expenditure.
Or
In an economy S = -100+0.6y is the saving function, where s is saving and y is national income. If Investment expenditure is
1100, then calculate the equilibrium level of income.

13. “Machine purchased is considered as final good” Justify.

Or
Show how the sum of value added is equal to sum of factor incomes.
14. “Banks are important agents of investment.” Do you agree with the statement? Why or why not?

(Short answer Type Questions) 4X3=12

15. Answer the following:-
(i) What is disinvestment? Does it refer to revenue receipt for capital receipt of the govt. Give an example?
(ii) What is balanced budget theory?
Or
Government budget plays an important role in overall development of country. In the light of above statement, explain
any four objectives of government budget?

(Long answer Type Questions) 6X2=12

16. What do you understand by deficient demand? Explain with the help of a diagram. Also give the causes of deficient
demand?
Or
What do you understand by excess demand? Explain with the help of a diagram. Also give the causes of excess demand?
17. Find out and net national product at market price and Gross domestic product at factor cost?
Sr. No. Items In Crore
1. Undistributed Profits 30
2. Compensation of Employees 800
3. Rent 300
4. Dividend 100
5. Royalty 40
6. Net current transfers to Abroad -30
7. Corporation Tax 50
8. Interest 400
9. Depreciation 10
10. Net Factor Income from Abroad -10
11. Net Indirect tax 60