General Instructions:

 All questions are compulsory.

Part-A-Statistics for Economics (40 Marks)
Part-B-Introductory Microeconomics (40 Marks)
 Marks for questions are indicated against each question.
 Question Nos. 1–10 and 18–27 (including two Case Based Questions) are very short
answer questions carrying 1mark each. They are required to be answered in one word
or one sentence each.
 Case Based Questions (CBQ’s) are Questions No.8-10 and Question No.25-27.
 Question Nos. 11–12 and 28–29 are short answer questions carrying 3 marks each.
Answers to them should not normally exceed60-80 words each.
 Question Nos. 13–15 and 30-32 are also short answer questions carrying 4marks each.
Answers to them should not normally exceed 80-100 words each.
 Question Nos.16–17 and 33–34 are long answer questions carrying 6 marks each.
Answers to them should not normally exceed 100 words each.
 Answers should be brief and to the point, and the above word limits should be
adhered to as far as possible

SECTION A: STATISTICS FOR ECONOMICS

1. Which of the following Statement is false? (Choose the correct alternative) [1]
(a). Statistics deal with only quantitative data
(b). Statistics solves economic problems
(c). Statistics is of no use to Economic without data
(d). Statistics does not study individual units.

2. Out of the numerical examples mentioned below, which can be considered as statistics? [1]
(a). The sale of firm A is 70,000 tones.
(b). The cost of AC was Rs 25,000 in the month of April.
(c). Ram got 12% more marks than Shyam.
(d). In India, the death rate in 2001 was 8.7 per thousand.

3. _______________ (Mean/Median) is an average of position and influenced by the position [1]

of items in arrangement and not by the size of items.

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 Study the following Diagram & Answer Question No-4

4. Write the name of this graphical representation. [1]

5. Read the following statements-Assertion(A) and Reason(R). Choose one of the correct [1]
alternatives given below:
Assertion (A): Standard deviation is Independent of Origin.
Reason (R): Standard deviation is not affected by the value of the constant from which
deviation are calculated.
Alternatives
a). Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
b). Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
c). Assertion (A) is true but Reason (R) is false
d). Assertion (A) is false but Reason (R) is true
OR
Read the following statements-Assertion(A) and Reason(R). Choose one of the correct
alternatives given below:
Assertion (A): Standard deviation does not Independent from scale.
Reason(R): A change in even one value affects the value of standard deviation.
Alternatives
a). Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
b). Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
c). Assertion (A) is true but Reason (R) is false
d). Assertion (A) is false but Reason (R) is true

6. If r is the correlation coefficients between the two variables, then: [1]

(a). -1 <r<0
(b). 1 <r<2
(c). -1 <r<1

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 (d). 0 <r<1

7. Match the items given under ‘A’ with the suitable statements under ‘B’ [1]
(A) (B)
(a) Cost of living Index (i) Measures changes in the magnitude of a
group of related variables over a period of
time.
(b) Wholesale Price Index (ii) Measures the average change in retail
prices.
(c) Industrial Production Index (iii) Widely used to measure the rate of
inflation.
(d) Index Number (iv) Measures changes in the level of industrial
production comprising many industries.

(a). ii, (b). iii, (c). iv, (d). i

(a). iii, (b). i, (c). ii, (d). iv
(a). i, (b). ii, (c). iii, (d). iv
(a). iv, (b). ii, (c). iii, (d). i

Read the following passage and answer Questions 8-10 on the basis of the same:
Due to developing communicative technologies, computer games and other audio-visual
media as social phenomena, are very attractive and have a great impact on children and
adolescents. The increasing popularity of these games among children and adolescents
results in the uncertainties about plausible harmful effects of these games. The study aimed
to investigate the correlation between computer games and behavioral problems on school
students.
The results of this study indicated that there was about 95% direct significant correlation
between the amount of playing games among adolescents and anxiety/depression,
withdrawn/depression, rule-breaking behaviors, aggression, and social problems. However,
there was no statistically significant correlation between the amount of computer game usage
and physical complaints, thinking problems, and attention problems. In addition, there was a
significant correlation between the students place of living and their parents’ job, and using
computer games.
Source: www.ncbi.nlm.nih.gov

8. _______________(Correlation/Dispersion) analysis attempts to determine the degree of [1]

relationship between the variables. (Fill up the blank with correct alternative)

9. When two variables move in the _______________ (Opposite/same) direction it is a case of [1]
negative correlation.

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10. “The study aimed to investigate the correlation between computer games and behavioral [1]
problems on school students”. Which kind of correlation is mentioned in these lines?
(Choose the correct alternative)
(a). Positive Correlation
(b). Negative Correlation
(c). Linear Correlation
(d) Multiple Correlation

11. Construct frequency polygon for the following data: (Without Histogram) [3]
Marks 0-10 10-20 20-30 30-40 40-50
No. of students 10 15 20 40 25

12. Statistics prove that there is oil shortage in India. What values do you suggest to people to [3]
meet the growing demand for oil?
OR
The profits of firm A are Rs 4 lakh for the year 2020-21 and that of firm B Rs 5 lakh for the
same period. Statistical data given here prove that firm B is performing better than firm A.
Do you defend the statistical conclusion? Which values does this statistical conclusion
ignore?

13. Calculate median using ‘less than ogive’ and ‘more than ogive’ using the data given below: [4]
Marks 5-15 15-25 25-35 35-45 45-55 55-65
No. of 4 6 10 5 3 2
students

14. Find the consumer price index or cost of living index number for the current year from the
following data by Family budget method. [4]
Articles Quantities consumed in Price in the base year Price in the current Year
base year
Rice 5 Quintal 24 30
Wheat 4kg 10 20
Oil 3L 30 60
Wood 2 Quintal 40 50
Rent 1 house 50 60

OR
“Index numbers are economic barometers”. Explain

15. Calculate Karl Pearson’s coefficient of correlation from the following data: [4]
X 50 54 56 58 59 60 61 62 65 75
Y 20 22 24 30 32 36 38 40 44 54

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16. The following table gives production yield in kg per hectare of 150 farms in a village. [6]
Calculate mean, median and mode.

Production 50-53 53-56 56-59 59-62 62-65 65-68 68-71 71-74 74-
yield 77
No of firms 3 8 14 30 36 28 16 10 5

OR
From the following information on daily income of 150 families, calculate mean, median
and mode.
Income in Rs. Number of families
More than 75 150
More than 85 140
More than 95 115
More than 105 95
More than 115 70
More than 125 60
More than 135 40
More than 145 25

17. Calculate the coefficient of variation and standard deviation of the following data
Marks 0-10 10-20 20-30 30-40 40-50
No of Students 4 3 6 5 2

SECTION B: INTRODUCTORY MICROECONOMICS

18. The law of scarcity: [1]

(a). Does not apply to rich, developed countries.
(b). Applies only to the less developed countries.
(c). Implies that consumers want will be satisfied in a socialistic system.
(d). Implies that consumer’s wants will never be completely satisfied.

19. State whether True or False. Give reason [1]

A person who does not spend his entire income on purchase of two goods, stays on the
Budget line.
OR
A budget set is the collection of all bundles of goods that a consumer wants to buy.

20. Read the following statements-Assertion (A) and Reason (R). Choose one of the [1]
correct alternatives given below:
Assertion(A): If due to fall in the price of goods Demand for goods Y rises, the two goods
are complementary.
Reasons(R): Complementary goods have inverse relation.
Alternatives:
a). Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A)
b). Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct

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 explanation of Assertion (A)
c). Assertion (A) is true but Reason (R) is false
d). Assertion (A) is false but Reason (R) is true
OR
Read the following statements-Assertion (A) and Reason (R). Choose one of the
correct alternatives given below:
Assertion(A):The demand curve slopes downward because of law of diminishing
marginal utility.
Reasons(R): More of a product is consumed the marginal(additional) benefit to the
consumer rises.
Alternatives:
a). Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A)
b). Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct
explanation of Assertion (A)
c). Assertion (A) is true but Reason (R) is false
d). Assertion (A) is false but Reason (R) is true

21. If Marginal Rate of Substitution is constant throughout, the Indifference Curve will [1]
be:(Choose the correct alternative)
(a). Parallel to the x-axis
(b). Downward sloping concave
(c). Downward sloping convex
(d). Downward sloping straight line

22. Read the following statements-Assertion (A) and Reason (R). Choose one of the [1]
correct alternatives given below:
Assertion(A): When Average Cost is constant, AC curve is at its minimum point.
Reasons(R): At this point, MC curve cuts AC curve, which implies MC=AC
Alternatives:
a). Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A)
b). Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct
explanation of Assertion (A)
c). Assertion (A) is true but Reason (R) is false
d). Assertion (A) is false but Reason (R) is true

23. The relationship between AR and MR depicted in the following diagram is possible when: [1]

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 (a). Price remains constant with rise in output
(b). Price falls with rise in output
(c). Price initially falls and then remains constant with rise in output
(d). None of these

24. Ishaan, Piyush and Bhavya are three friends talking about the relationship between [1]
marginal cost (MC) and average cost (AC).

 Ishaan says, “MC curve intersects AC curve from above”.

 Bhavya says, “MC curve does not intersect AC curve at all”.
 Piyush says, “MC curve intersects AC curve from below”.
Out of the three, who is correct?
(a) Piyush
(b) Ishaan
(c) Bhavya
(d) All of them

Read, the following hypothetical Case Study, carefully and answer the question
numbers 25-27 on the base of the same.
A perfectly competitive firm is called a price taker, because the pressure of competing
firms forces them to accept the prevailing equilibrium price in the market. When a wheat
grower wants to know what the going price of wheat is, he or she has to go to the
computer or listen to the radio to check. The market price is determined solely by supply
and demand in the entire market and not the individual farmer. If a firm in a perfectly
competitive market raises the price of its product by so much as a penny, it will lose all of
its sales to competitors, since no rational consumer would pay a higher price for an
identical product. Perfectly competitive firms, by definition, are very small players in the
overall market, so that it can increase or decrease output without noticeably affecting the
overall quantity supplied and price in the market. Since they can sell all the output, they
want at the going market price, they never have an incentive to offer a lower price. What
this means is that a perfectly competitive firm faces a horizontal demand curve at the
market price.

25. A perfectly competitive firm is called a price taker [1]

Because ______________________

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26. The market price is determined solely by [1]
a) Supply and demand in the entire market
b) The individual farmer
c) By the government
d) All of these

27. The sellers have no incentive to offer supply at a lower price because__________ [1]

28. If more & more resources are constantly explored and new techniques of production are [3]
constantly discovered, don’t you think a day will come when our central problems will be
solved once for all?
OR
What is an economic problem? Why does it arise?

29. On 19th December 2019, the following news item was printed in the Economics times: [3]
Households in southern India prefer to eat oranges for breakfast as banana
plantation in Kerala have been destroyed and prices of apples and grapes have also
risen.
Use a diagram and economic theory to analyze the impact of the rise in price of apples and
grapes on the market of oranges.

30. The following table shows the total utility gained from the consumption of Fanta Lemon [4]
in a week.
Quantity 1 2 3 4 5 6 7
Total 20 35 45 53 58 58 48
utility
(a). Calculate the marginal utility. What do you observe?
(b). Sketch the total utility and marginal utility curves.
OR
Demands for cigarettes, alcohol and tobacco are continuously increasing even with rise in
prices. What does this indicate? What steps should Government take to control it?

31. (a). Why is Total Variable Cost Curve Inverse S-shaped? [4]
(b), What is Average Fixed Cost of a firm? Why is an Average Fixed Cost Curve a
Rectangular Hyperbola? Explain with a help of a diagram.

32. “Market mechanism refers to the forces of demand and supply working freely in their own [4]
according with no interference from the government or anyone market influencer. This
theory of free markets or invisible hand as explained by Adam smith, father of economics.
However, due to adversity in the conditions, the market reaches equilibrium at too high a
price or too low a price. In these cases, the government interferences to safeguard the
consumers & producers”.
Analyze this situation in two diagrams.

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33. A consumer consumes only two goods. Why is the consumer in equilibrium when he buys [6]
only that combination of the two goods that is shown at the point of tangency of the
budget line with an indifference curve? Explain with the help of a diagram.
OR
A consumer consumes only two goods X and Y whose price are Rs 4 and Rs 5 per unit
respectively. If the consumer chooses a combination of these two goods with marginal
utility of X equal to 5 and that equal to 4, is the consumer in equilibrium? Give reasons.
What will a rational consumer do in this situation? Use utility analysis.

34. What are the different phases in the law of variable proportions in terms of Total Product [6]
and marginal product? Give reason behind each phase. Use Diagram.

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