64c70201-0500-47c4-b461-27e79250b3c5

Calcutta University
B.Com (3rd Year)
Semester - IV
Honours & General
Question & Answers
on
Economics
By
Gobind Kumar Jha
Ca (F). L.L.B(H)., M. Com (H)
CONTENTS Page No:
Unit I: Monopoly 1–3
Unit II: Imperfect Competition 5–8
Unit III: Factor Price Determination 9 – 14
Unit IV: Basic Issues in Economic Development 15 - 16
Unit V: Basic Features of Indian Economy 17 - 18
Unit VI (A): Sectoral Trends and Issues:- Agricultural Sector 19 - 22
Unit VI (B): Sectoral Trends and Issues:- Industry and Service Sector 23 - 26
Unit VI (C): Sectoral Trends and Issues: External Sector 27 -28
Unit VII: Social Issues in Indian Economy 29 - 32
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Chapter Name Page No.
B. Com. (Semester – IV)

Microeconomics II and Indian Economy Chapter Wise MCQ Booklet 33 - 35
Unit I: (Monopoly)
Unit II: (Imperfect Competition) 35 - 37
Unit III: (Imperfect Competition) 38 - 41
Unit IV: (Basic Issues in Economic Development) 42 - 43
Unit V: (Basic Features of Indian Economy) 44 - 45
Unit VI(A):(Sector Trends and Issues: Agricultural Sector) 46 - 48
Unit VI (B): (Sectoral Trends and Issues: Industry and Service Sector) 48 - 50
Unit VI (C): (Sectoral Trends and Issues: External Sector) 50
Unit VII: (Social Issues in Indian Economy) 51 - 52
Group – A (1 X 20) : Answer all the questions 53 - 54
Group – B (2 X 30) 54 - 56
Module – I Group – A (2 x 5) : Answer any five questions 56
Group – B (3 X 10) :Answer any ten questions 57
Module – II Group – A (2 X 5) : Answer any five questions 58
Group – B (3 X 10) : Answer any ten questions 59 - 60
Group – A (1 X 20) : Answer the following questions 61 - 62
Group – B (2 X 30) : Answer the following questions 63 - 65

Gobind Kumar Jha 9874411552
I Monopoly
GOBIND KUMAR JHA
UNIT 9874411552
Unit – I
Monopoly
FEATURES OF MONOPOLY MARKET:
1. Single Seller:
2. Price Maker:
3. No Close Substitute:
4. Product Differentiation:
5. Dominating in Market:
6. Full Control:
7. Restriction of Entry:
8. Price Discrimination:
PURE MONOPOLY:
A pure monopoly is a market structure where a certain product is produced or sold by a single company. The
following are the characteristics of a pure monopoly:
a) Sole supplier
b) No substitute product
c) No rivals/competitors
In a pure monopoly, there are certain barriers that prevent other players from entering the market. The barriers include
economies of scale, control of resources and legal barriers.
NATURAL MONOPOLY:
A natural monopoly is a type of monopoly that exists typically due to the high start up costs or powerful economies of
scale of conducting a business in a specific industry which can result in significant barriers to entry for potential
competitors. Example of natural monopoly is railroad company.
MARGINAL REVENUE:
Output Price Total Revenue Marginal Revenue
0 14 0 -
1 12 12 12
2 10 20 8
3 8 24 4
4 6 24 0
5 4 20 -4
DEMAND CURVE:
In a monopoly, the demand curve seen by the single selling firm is the entire market demand curve. As the demand
curve is downward sloping, the marginal revenue corresponding to any quantity and price on the demand curve is less
than the price (i.e. Average Revenue)
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GOBIND KUMAR JHA 9874411552
SUPPLY CURVE:
In a monopoly, however there is no unique supply curve, there is no definite relationship between the price and the
amount offered for sale. A monopoly firm equates marginal cost with marginal revenue, which is lower than the price.
(MC = MR and MR<AR or P)
MONOPOLY POWER:
Monopoly power (also known as Market Power) refers to a firm’s ability to change a price higher than it’s marginal
cost. Monopoly power typically exists where there is low elasticity of demand and significant barriers to entry.
Learner’s Index of Monopoly Power = (p – MC)/p = 1/e
SOURCES OF MONOPOLY POWER:

The sources of monopoly power include economies of sce, locational advantages, high sunk costs associated with
entry, restricted ownership of key inputs and government restrictions, such as exclusive franchisee, licensing and
certification requirements and parents.
SHORT-RUN EQUILIBRIUM OF A MONOPOLY FIRM:

The conditions for equilibrium in Monopoly are the same as those under perfect competition. The marginal cost is
equal to the marginal revenue and the MC curve cuts the MR curve from below.
Like in perfect competition, there are three possibilities for a firm’s equilibrium in monopoly. These are:
a) The firm earns normal profits – If the average cost = the average revenue
b) It earns super normal profits – If the average cost < the average revenue
c) It incurs losses – If the average cost > the average revenue
In the short run, a monopolist firm cannot vary all it’s factors of production as it’s cost curves are similar to a firm
operating in perfect competition. Also, in the short run, a monopolist might incur losses but will shut down only if the
losses exceed it’s fixed costs. Further, if the demand for his product is high, then the monopolist can also make super
normal profits.
LONG RUN EQUILIBRIUM OF A MONOPOLY FIRM:

In the long run, a monopolist can vary all the inputs. Therefore, to determine the equilibrium of the firm, we need only
two cost curves – the AC and the MC. Further, since the monopolist exits the market if he is operating at a loss, the
demand curve must be tangent to the AC curve or lie to the right and intersect it twice.
In monopoly, on the other hand, long run equilibrium occurs at the point of intersection between the monopolists
marginal revenue (MR) and long run marginal cost (LMC) curves.
There are two alternative cases for the determination of equilibrium in Monopoly:-
a) With normal profits
b) With super normal profits
PRICE DISCRIMINATION:
In monopoly, there is a single seller of a product called monopolist. The monopolist has control over pricing, demand,
and supply decisions. Thus, sets prices in a way, so that maximum profit can be earned.
The monopolist often charges different prices from different consumers for the same product. This practice of
charging different prices for identical product is called price discrimination.
TYPES OF PRICE DISCRIMINATION:

1) Personal: When different prices are charged from different individuals. For example, a doctor charges
different fees from poor and rich patients.
2) Geographical: When the monopolist charges different prices at different places for the same product. This
type of discrimination is also called as dumping.
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3) On the basis of Use: When different prices are charged according to the use of a product. For instance, an
electricity supply board charges lower rates for domestic consumption of electricity and higher rates for
commercial consumption.
DEGREE OF PRICE DISCRIMINATION:

1) First-degree Price Discrimination: Price discrimination in which a monopolist charges the maximum price
that each buyer is willing to pay. In this, consumers fails to enjoy any consumer surplus. First degree is
practiced by lawyers and doctors.
2) Second-degree Price Discrimination: Price discrimination in which buyers are divided into different groups
and different prices are charged from these groups depending upon what they are willing to pay. Railways and
airlines practice this type of price discrimination.
3) Third-degree Price Discrimination: A price discrimination in which, the monopolist divides the entire
market into submarkets and different prices are charged in each submarket. Therefore, third-degree price
discrimination is also termed as market segmentation.
CONDITIONS FOR PRICE DISCRIMINATION:

a) Existence of monopoly
b) Separate market
c) No contact between buyers
d) Different elasticity of demand
SOCIAL COST OF MONOPOLY:

Under monopoly, resources are misallocated causing loss of social welfare. Monopoly results in a social loss because
output is restricted below it’s optimal level, meaning that marginal benefit and marginal cost are not equated.
Traditionally this social loss has measured in terms of the dead weight loss (DWL) of monopoly.
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Notes
GOBIND KUMAR JHA II Imperfect 9874411552

Unit –Competition
II
UNIT Imperfect Competition
TYPES OF IMPERFECT COMPETITION MARKET:

There are four types of imperfect markets:-
a) Monopoly (only one seller),
b) Oligopoly (few sellers of goods),
c) Monopolistic Competition (many sellers with highly differentiated product),
d) Monopsony (only one buyer of product).
CHARACTERISTICS/FEATURES OF MONOPOLISTIC COMPETITION:

1) Price differentiation
2) Many firms (large number of sellers and buyers)
3) Freedom of entry and exit
4) Independent decision making
5) Some degree of market power
6) There are many producers and many consumers in the market and no business has total control over
the market price. Producers have a degree of control over price.
7) Consumers perceive that there are non-price differences among the competitors products.
8) Buyers and sellers do not have perfect information (imperfect information)
9) Price makers
10) Blend of competition and monopoly
11) Each firm earns only normal profit in long run
12) Each firm spends substantial amount on advertisement. The publicity and advertisement costs are
known as selling costs
13) The principal goal of the firm is to maximise it’s profits.
EXAMPLES OF MONOPOLISTIC COMPETITION:

Toothpaste, Soap, Air conditioning, Smartphones and Toilet Paper.
KEY DIFFERENCE WITH MONOPOLY:

A monopoly is a single firm with high barriers to entry. Monopolistic competition implies an industry with
many firms, differentiated products and easy entry & exit.
KEY DIFFERENCE WITH PERFECT COMPETITION:

In monopolistic competition, firms do produce differentiated products. Therefore, they are not price takers
(perfectly elastic demand). They have inelastic demand.
DEMAND CURVE IN MONOPOLISTIC COMPETITION:

The demand curve for a monopolistically competitive firm is relatively more elastic than that of a monopoly.
Demand is not perfectly elastic.
Monopolistic competition has a downward sloping demand curve.
SUPPLY CURVE IN MONOPOLISTIC COMPETITION:
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No unique supply curve (as well as the supply schedule) can be drawn. For a firm under imperfect
competition, it is not a question of adjusting output or supply at a given price but of choosing price-output
combination which maximise it’s profits.
MONOPOLISTIC COMPETITION IN SHORT RUN:

 Short-run equilibrium for a monopolistically competitive firm is identical to that of a monopoly firm.
 The firm produces an output at which marginal revenue equals marginal cost.
 Price and average revenue is greater than marginal revenue in monopolistic competition.
 Price is also greater than marginal cost.
 In short run, the company may earn normal profit or super normal profit or incur loss.
 [MR = MC]; [AR > MR]; [P > MC]
MONOPOLISTIC COMPETITION IN LONG RUN:

 In the long run, in monopolistic competition any economic profits or losses will be eliminated by
entry or by exit, leaving firms with zero economic profit.
 In Long run monopolistically competitive industry earn normal profit only.
 A Monopolistically competitive industry will have some excess capacity.
 In the long run, companies in monopolistic competition still produce at a level where marginal cost
and marginal revenue are equal.
 The demand curve will shift to the left due to other companies entering the market.
OLIGOPOLY:
An oligopoly is an industry dominated by a few large firms. For example, an industry with a firve firm
concentration ratio of greater than 50% is considered a oligopoly.
FEATURES OF OLIGOPOLY:
a) Prices are rigid in oligopoly
b) Demand is inelastic for a price cut but demand is elastic for price increases
c) Kinked demand curve model
d) An industry which is dominated by a few firms. (Few firms and large number of buyers)
e) Interdependence of firms: companies will be affected by how other firms set price and output
f) In an oligopoly, there must be some barriers to entry
g) Differentiated products
h) In an oligopoly firms often compete on non-price competition
i) Oligopoly is the most common market structure
EXAMPLES OF OLIGOPOLIES:
 Car industry
 Petrol retail
 Pharmaceutical industry
 Coffee shop retail – Starbucks, Costa Coffee, Café Nero
 Newspapers
POSSIBLE OUTCOMES OF OLIGOPOLY:

There are different possible outcomes for oligopoly:-
 Stable prices (e.g. through kinked demand curve)
 Firms concentrate on non-price competition
 Price wars (competitive oligopoly)
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 Collusion – leading to higher prices
 The objectives of the firms is profit maximization or sales maximization
 The degree of contestability i.e. barriers to entry
 Government regulations
 Price war
 Main aim to maximize profit
TYPES OF OLIGOPOLIES:
a) Pure Oligopoly: Here, the oligopolists sell practically homogenous products. This type is found in
steel, copper, cement, petrol and a few other industries.
b) Differential Oligopoly: In such a case, few firms sell similar but not identical products under the
same conditions. It is found in automobiles, tyres, electrical appliances, cigarettes, baby food and a
few other industries.
COLLUSION:
 Another possibility for firms in oligopoly is for them to collude on price and set profit maximizing
levels of output. This maximises profit for the industry.
 Collusion is illegal but tacit collusion may be hard to spot.
 For collusion to be effective, there need to be barriers to entry.
 A cartel is a formal collusive agreement. For example, OPEC is a cartel seeking to control the price
of oil.
COLLUSIVE OLIGOPOLIES:
Another key feature of oligopolistic markets is that firms may attempt to collude, rather than compete. If
colluding, participants act like a monopoly and can enjoy the benefits of higher profits over the long term.
TYPES OF COLLUSION:
a) Overt: It occurs when there is no attempt to hide agreements, such as when the firms form trade
associations like the Association of Petrol Retailers.
b) Covert: It occurs when firms try to hide the results of their collusion usually to avoid detection by
regulators such as when fixing prices.
c) Tacit: It arises when firms act together, called acting in concert, but where there is no formal or even
informal agreement.
SWEEZY’S KINKED DEMAND CURVE MODEL:

One of the important feature of oligopoly market is price rigidity. And to explain the price rigidity in this
market, conventional demand curve is not used. The idea of using a non-conventional demand curve to
represent non collusive oligopoly was best explained by Paul Sweezy in 1939. The kink in the demand curve
stems from the asymmetric behavioural pattern of sellers. If a seller increases the price of his product, the
rival sellers will not follow him so that the first seller loses a considerable amount of sales.
On the other hand, if one firm reduces the price of it’s product other firms will follow the first firm so that
they must not lose customers. In other words, every price will be matched by an equivalent price cut. As a
result, the benefit of price cut by the first firm will be inconsiderable. As a result of this behavioural pattern,
the demand curve will be kinked at the ruling market price.
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Notes
GOBIND KUMAR JHA III Factor Price9874411552

Determination
Unit – III
UNIT
Factor Price Determination
MARGINAL PRODUCTIVITY THEORY OF DISTRIBUTION:

The marginal productivity theory of distribution was developed by J. R. Clark, at the end of the 19th century,
provides a general explanation of how the price of a factor of production is determined.
In other words, it suggests some broad principles regarding the distribution of the national income among
the four factors of production. The theory states that the firm employs each fa tor up to that number where
it’s price is equal to it’s VMP. Thus, wages tend to be equal to the VMP of labour, interest is equal to VMP
of capital and so on.
ASSUMPTIONS OF THE THEORY:

a) It assumes that all units of a factor are homogenous.
b) One factor is variable and other factors are constant. (All factors except one are fixed)
c) There is perfect competition in the factor market.
d) There is perfect competition in product market.
e) They can be substituted for each other.
f) There is perfect mobility of factors as between different places and employments.
g) There is full employment of factors and resources.
h) The various units of different fa tors are divisible.
i) Technique of production are given and constant.
j) The entrepreneurs are motivated by profit maximization.
k) The theory is applicable in the long run.
l) It is based on the Law of Variable Proportion.
SOME KEY CONCEPTS:

1) MPP:- The first concept is Marginal Physical Product of a factor. The marginal physical product of a
factor, say labour, is the increase in the total product of the firm as additional workers are employed
by it.
2) VMP:- The second concept is Value of Marginal Product. If we multiply the MPP of a factor but the
price of the product, we would get the value of the marginal product (VMP) of that factor. VMP of a
factor = MPP of the factor X Price of the product per unit.
3) MRP:- The third concept is Marginal Revenue Product (MRP), which is the addition to the total
revenue when more and more units of a factor are added to the fixed amount of other factors. MRP =
MPP X MR under perfect competition.
Under perfect competition, VMP of a factor = MRP of that factor.
CRITICISM OF THE THEORY:

The marginal productivity theory of distribution has been one of the most criticised theories in economics
due to it’s unrealistic assumptions.
1) Units of a factor not homogenous
2) Factors not perfectly mobile
3) No perfect competition
4) Factors not fully employed
5) All factors are divisible
6) Production not the result of one factor
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7) Profit not the main motive
8) Not applicable in the short run
9) Nested on technical progress
10) Supply of factors not fixed
11) Only demand theory
12) No justification for inequalities in income
13) Reward determines productivity
MARGINAL PRODUCTIVITY THEORY OF WAGE:

The marginal productivity theory of wage states that the price of labour, i.e., wage rate is determined
according to the marginal product of labour. This was stated by the neoclassical economists, especially J. B.
Clark in the late 1890s.
The marginal product of labour refers to a company’s increase I total production when one additional unit
of labour is added (in most cases, one additional employee) and all other factors of production remains
constant.
Assumptions of Marginal Productivity Theory of Wage:
The important assumptions of this theory are:-
a) Perfect competition prevails in products market and in labour market.
b) Law of variable proportions operates.
c) The firm aims at profit maximization.
d) All labourers are homogenous and are divisible.
e) Labour is mobile and is substitutable to capital and other inputs.
f) Resources are fully employed.
Criticism of the Theory:
a) In the real world, perfect competition does not exist.
b) Labour can never be homogenous.
c) Perfect t mobility of labour is another unrealistic assumption.
d) The marginal productivity theory of wage ignores the supply side of labour and concentrates only on
the demand for labour.
e) Full employment of resources is another unrealistic assumption.
f) This theory, in fact, is not a wage theory but a theory of employment.
g) Finally, this theory ignores the usefulness of trade union in wage determination.
In view of all these criticism, the marginal productivity theory of wages has become useless.
DEMAND CURVE OF LABOUR:

The demand curve of labour tells use how many workers a business will employ at a given wage rate in a
given time period. In the theory of competitive labour markets, the demand curve of labour comes from the
estimated marginal revenue product of labour (MRPL).
Labour demand curve is explained by the VMP L curve coincides with the MRPL curve. VMPL = MRPL
Curve is the firm’s demand curve for labour. This curve slopes downward because of diminishing marginal
returns.
SUPPLY CURVE OF LABOUR:

In economics, a backward bending supply curve of labour or backward bending labour supply curve, is a
graphical device showing a situation in which as real (inflation corrected) wages increase beyond a certain
level, people will substitute time previously devoted for paid word for leisure (non paid time) and so higher
wages lead to a decrease in the labour supply and so less labour time being offered for sale.
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As wages increase above the subsistence level, there are two consideration affecting a worker’s choice of
how many hours to work per unit of time (usually day, week or month). The first is the substitution or
incentive effect.
WAGE DETERMINATION IN AN IMPERFECTLY COMPETITIVE LABOUR

MARKET:
Wage Determination under Perfect Competition:
Under perfect competition, equilibrium wage rate is determine where demand for labour is equal to supply
of labour. In other words, under perfect competition, a labourer will get wage equal to it’s marginal revenue
productivity in the long run.
Wage Determination under Monopsony:

In case of monopsony, there is only one buyer of a factor of production, which is labour in this case. This
single buyer has no competitor in the market. Therefore, the position of the buyer is very strong as compared
to labour. In this case, the employer would have a control on selling the wages for that particular job.
Demand for Labour under Monopoly:

A monopolist hires labour up to the point where MRPL equals the wage rate. And it employs extra labour so
long as revenue per worker exceeds the wage rate and stop where MRPL – wage rate. And a portion of MRP
curve which lies below the ARP curve is the demand curve of labour.
CONSTITUENTS OF COLLECTIVE BARGAINING:

There are three distinct steps in the process of collective bargaining:-
a) The creation of the trade agreement,
b) The interpretation of the agreement, and
c) The enforcement of the agreement.
FEATURES OF COLLECTIVE BARGAINING:

a) It is a group action
b) It is a continuous process
c) It is a bipartite process
d) It is flexible and mobile and not fixed or static
e) It is dynamic
f) It is a complementary and not a competitive process.
FACTORS DETERMINING THE POWER OF TRADE UNIONS TO RAISE

WAGES:
a) Ability to pay
b) Demand and supply
c) Prevailing market rates
d) Cost of living
e) Bargaining of trade unions
f) Productivity
g) Government regulations
h) Cost of training
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RICARDIAN THEORY OF RENT:
David Ricardo, a classical economist developed a theory in 1817 to explain the origin and nature of
economic rent. Rent is the payment made to landlord for the use of land. Ricardo was of the view that rent is
paid for the fertility of land. Ricardo stated “Rent is the portion of the produce of the earth which is paid to
landlord for the use of the original and indestructible powers of the soil “.
In his theory, rent is nothing but the producer’s surplus or differential gain and it is found in land only.
Ricardo said that “Corn is high not because rent is high but rent is high because corn is high”.
ASSUMPTIONS OF THE THEORY:
a) Rent of land arises due to the differences in the fertility of the soil.
b) Law of diminishing marginal returns.
c) Rent accrues only to land
d) There is tendency to move from most fertile land to the less fertile one.
e) Land on which no rent is earned is known as marginal land.
f) Total cost spent on each piece of land is same. According to Ricardo, rent arises as the difference
between production of Marginal Land (on which zero rent accrues) and superior land.
g) Ricardo assumed that land had only one use to grow corn.
REASONS FOR EXISTENCE OF RENT:

Ricardo offered two reasons for the emergence of rent:-
1) Scarcity Rent:- Land is limited in quantity and thus with the growth of population it becomes scarce
in relation to the demand for it. Thus, rent arises due to scarcity of land as a factor.
2) Differential Rent:- Different pieces of land are not uniform in quality. Hence, with the progress of
society, successively worse qualities are brought under cultivation. The owner of the marginal
quality land gets no rent at all. The Ricardian theory is thus called the Differential Theory of Rent.
CRITICISMS OF THE THEORY:

Ricardian theory had been criticised on the following grounds:-
a) Ricardo considers land as fixed in supply. Of course, land is fixed in an absolute sense but it has
alternative uses.
b) Ricardo's order of cultivation of lands is also not realistic.
c) The productivity of land does not depend entirely on fertility.
d) Ricardo’s assumption if no rent land is unrealistic as in reality, every plot of land earns some rent,
although the amount may be small.
e) Ricardo restricted rent to land only, but modern economists have shown that rent arises in return to
any factor of production, the supply of which is inelastic.
f) According to Ricardo, rent does not enter into price (cost) but from the point of view of an individual
farm rent forms a part of cost and price.
MODERN THEORY OF RENT:

Modern theory of rent is an amplified and modified version of Ricardian theory of rent. It was first of all
discussed by J. S. Mill and after that developed by economists like Jevonus, Parcto, Marshall, Joan
Robinson, etc.
Ricardo in his theory assumed that rent arises only on land but the advocates of modern theory of rent
believed that rent can arise on any factor of production.
According to modern version, rent is a surplus which arises due to difference between actual earning and
transfer earning.
So rent is the extra payment over the opportunity cost (minimum cost which has to be incurred). The scare
factor attracts more rent as the difference in the opportunity cost and actual rent paid is more.
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Rent = Actual Earning – Opportunity Cost
QUASI RENT:
 The concept of quasi rent was given by Alfred Marshall. He defined quasi rent as surplus earnings
generated by the factors of production except land.
 The earnings from machines and instruments are termed as quasi-rent.
 The quasi-rent refers to the income produced when the demand for products increases suddenly.
 It is used for a short-period of time. In the long run, all the costs are considered as variable cost. In
long run, the equilibrium can be attained when total revenue is equal to total costs. In such a case,
there is no quasi-rent.
THEORY OF PROFIT:
 Profit is a residual income, while return is a total revenue.
 Profits may be negative, whereas returns such as wages and interest are always positive.
 Profits have greater fluctuations than returns.
EXPLICIT COSTS:
A firm’s explicit costs are the actual cash payments it makes to those who provide resources. For example,
rent is paid on land hired, wages are paid to the employees, interest is paid on capital. In addition to this, a
firm also pays insurance premium and taxes and sets aside depreciation charges.
IMPLICIT COSTS:
Implicit Costs are the opportunity costs of using resources owned by the firm or provided by the firm’s
owners. Implicit costs include:- (a) Rent on entrepreneur’s own land, (b) Interest on his own capital, (c)
Wage of the entrepreneur which he could earn in alternative occupation.
GROSS PROFIT AND NET PROFIT:

Gross Profit = Total Revenue – Total Explicit Costs
Net Profit = Total Revenue – (Total Explicit Costs + Total Implicit Costs)
ACCOUNTING PROFIT AND ECONOMIC PROFIT:

Accounting Profit = TR – (W + R + I – M)
Here, TR = Total Revenue
W = Wages and Salaries
R = Rent
I = Interest
M = Cost of Materials
Economic Profit = Total Revenue – (Explicit Costs + Implicit Costs)
Economic profit is not always positive. It can also be negative, which is called economic loss. Economic
business resources can be better employed elsewhere.
NORMAL PROFIT:
 Normal profit is a situation where a firm makes sufficient revenue to cover it’s total costs and remain
competitive in an industry.
 In measuring normal profit, we include the opportunity cost of working elsewhere.
 Normal profit are included in the cost of production.
 Normal profit = Total Revenue – Total Costs
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 Normal profit occurs at an output where AR = ATC.
 Normal profit implies zero economic profit.
DIFFERENT THEORIES OF DETERMINATION OF PROFIT:

1. Schumpeter's Innovation Theory of Profit: Joseph Schumpeter propounded a theory caller
innovation according to which profits are the reward for innovation.
2. Knights' Uncertainty Bearing Theory: The uncertainty bearing theory of profits, which was
propounded by Prof. Knight. According to the theory, profit is a reward for the uncertainty bearing
and not the risk taking. Knight divided the risks into calculable and non-calculable risks.
INTEREST:
Interest is the reward of parting with liquidity for a specified period.
Gross Interest = Net Interest + Payment of risk + Payment for inconvenience + Cost of administrating
credit
Net Interest = Gross Interest – (Payment for risk + Payment for inconvenience + Cost of administrating
credit)
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IV Basic Issues in
UNIT
Economic
Unit – IV
Development
Basic Issues in Economic Development
ECONOMIC DEVELOPMENT:
In economic terms, development has been understood as achieving sustainable rates of growth of income per
capita to enable the nation to expand faster than the population.
A country’s economic development is usually indicated by an increase in citizen’s quality of life. ‘Quality of
life' is often measured using the Human Development Index (HDI), which is an economic model that
considers intrinsic personal factors not considered in economic growth, such as: Nutritional level, health,
sanitation, drinking water, vaccination, education and other such indicators which makes quality of life
better. Thus, we can say economic development is both quantitative as well as qualitative progress.
 Economic Development is the overall well being of the citizens of a country.
 Economic growth on the other hand, is a narrower concept than economic development.
 Economic development is measured as increase in Gross National Product (GNP).
GROSS DOMESTIC PRODUCT (GDP) :

GDP is the market value of all final goods and services produced in a country in a given year. This is
calculated at market prices and is known as GDP at market prices.
There are three different ways to measure GDP:-
1) The Product Method:- In this method, the value of all goods and services produced in different
industries during the year is added up. In other words, it is the sum of gross value added.
2) The Income Method:- The people of a country who produce GDP during a year receive incomes
from their work. Thus, GDP by income method is the sum of all factor incomes. Wages and Salaries
(compensation of employees) + Rent + Interest + Profit.
3) The Expenditure Method:-
GDP by expenditure method at market prices = Consumer Expenditure (C) + Investment in Fixed
Capital (I) + Government Expenditure (G) + Export of goods and services (X) – Imports (M).
GNP:
GNP is the total value of all final goods and services produced within a nation in a particular year, plus
income earned by its citizens (including income of those located abroad), minus income of non residents
located in that country. Basically, GNP measures the value of goods and services that the country’s citizens
produced regardless of their location. The GNP is one measure of the economic development and it is
assumed that higher GNP leads to higher standard of living.
GNP = GDP + Net Property Income from Abroad
GDP AT MARKET PRICE AND GDP AT FACTOR COST:

GDP at Factor Cost = GDP at market price – Indirect Taxes (T) + Subsidies (SU)
NET DOMESTIC PRODUCT (NDP) :

NDP = GDP at Factor Cost – Depreciation
NET NATIONAL PRODUCT (NNP) :

NNP = GNP – Depreciation
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NNP AT MARKET PRICE:
NNP at Market Price = GNP at Market Prices – Depreciation
NNP AT FACTOR COST:
NNP at Factor Cost = NNP at Market Price – Indirect Taxes + Subsidies = National Income
REAL INCOME:
𝑁𝑁𝑁𝑁𝑁𝑁𝑓𝑓𝑓𝑓𝑓𝑓𝑡𝑡ℎ𝑒𝑒𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑌𝑌𝑌𝑌𝑌𝑌𝑌𝑌𝑋𝑋𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝑌𝑌𝑌𝑌𝑌𝑌𝑌𝑌𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑁𝑁𝑁𝑁𝑁𝑁ൌ

𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑌𝑌𝑌𝑌𝑌𝑌𝑌𝑌𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼

PER CAPITA INCOME:
𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼
𝑃𝑃𝑃𝑃𝑃𝑃𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼ൌ
𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃
Since, for the purpose of arriving at the Real Per Capita Income:-
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑃𝑃𝑃𝑃𝑃𝑃𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼ൌ
𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃
METHODS OF MEASURING NATIONAL INCOME:

1) Product Method
2) Income Method
3) Expenditure Method
4) Value Added Method
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GOBIND KUMAR JHA

V Basic Features of9874411552
Unit – V
UNIT
Indian Economy
Basic Features of Indian Economy
CLASSIFICATION OF INDIAN ECONOMY:

Indian Economy is classified in three major sectors:-
1) Agriculture & Allied Sector: This sector includes forestry and fishing also. This sector is also
known as the primary sector of the economy. But year by year it’s contribution goes on declining and
currently it contributes only 20% of Indian GDP at current prices. It is worth to mention that
agriculture sector provides jobs to around 54% population of India.
2) Industry Sector: This sector includes ‘Mining & Quarrying', Manufacturing (Registered &
Unregistered), Gas, Electricity, Construction and Water supply. This is also known as the secondary
sectors of the economy. Currently it is contributing around 26% of the Indian GDP (at current
prices).
3) Services Sector: Services sector includes ‘Financial, Real estate & professional services, Public
Administration, Defence and other services, Trade, Hotels, Transport, Communication and services
related to broadcasting. This sector is also known as tertiary sector of the economy. Currently this
sector is the backbone of the Indian economy and contributing around 55% of the Indian GDP.
OCCUPATIONAL STRUCTURE:
Occupational structure refers to distribution of working population across primary, secondary and tertiary
sectors of the economy.
Some of the main features of occupational structure in India are as follows:-
1) Agriculture is main occupation
2) Less development of industries
3) Unbalanced
4) Less income
5) Small villages
6) Backward agriculture
7) Increase in the proportion of agriculture labourers
8) Less development of tertiary sector
STRUCTURE CHANGE IN INDIAN ECONOMY:

In order to study the structural change in any economy, one have to analyse the contribution of various
sectors to the national output.
Apart from the growth in quantitative terms, there have been significant changes in India’s economic
structure since independence.
1) Changing sectoral distribution of domestic product
2) Growth of basic capital goods industries
3) Expansion in social overhead capital
4) Progress in the Banking and Financial sector
ISSUE OF SERVICE-LED GROWTH:

The services sector is not only the dominant sector in India’s GDP, but has also attracted significant foreign
investors flows, contributed significantly to exports as well as provided large scale employment. India’s
services sector covers a wide variety of activities such as trade, hotel and restaurant, transport, storage and
15 17

communication, financing, insurance, real estate, business services, community, social and personal services
and services associated with construction.
The services sector is the key driver of India’s economic growth. The sector has contributed 57.12% of
India’s Gross Value Added at current Price in 2018-19.
The critical issues that have been identified are:-
1) What is the pattern of growth in India’s service sector, i.e., how do different services compare in
terms of their growth rates and shares in GDP, employment, trade and FDI?
2) What explains growth in India’s service sector?
3) What explains the lack of employment growth in the services sector?
4) Can India’s service sector sustain its growth?
5) What are the important external and internal barriers to trade in different services in India?
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VI (A) Sectoral Trends and

GOBIND KUMAR JHA
UNIT
Issues 9874411552
Unit – VI (A)
Agricultural
Sectoral Trends and Issues:- Agricultural Sector Sector
PROBLEM OF LOW PRODUCTIVITY:
The main causes of low productivity of agriculture are broadly of three types:-
1. Human Factors:- Human factors are those which are related to training and efficiency of the
farmers.
a) Social atmosphere
b) Pressure of population on land
2. Technical Factors:- Technical factors include techniques and methods of production.
a) Traditional methods of cultivation
b) Old implements
c) Insufficient irrigation facilities
d) Problems of soil
e) Problems of pests and diseases of crops
f) Feeble cattle
g) Lack of credit facility
h) Lack of Hugh Yielding Variety (HYV) seeds
i) Improper marketing
3. Institutional Factors:-
a) Small size of farms
b) Defective land tenure system
GREEN REVOLUTION:
 Green Revolution is also called as Wheat Revolution.
 Significant break through by way of productivity increase under Green Revolution was achieved in
wheat. This experiment was extended with new wheat and rice varieties.
 Green revolution commenced in the year 1966.
 Substantial improvement in agricultural productivity was achieved through Green Revolution. The
father of Green Revolution was M. S. Swaminathan.
 The introduction of HYV seeds and increased use of fertilizers, pesticides and irrigation –
collectively known as Green Revolution.
 The Green revolution within India led to an increase in agricultural production, especially in
Haryana, Punjab and Uttar Pradesh.
 Green Revolution is associated with agricultural production.
 It is the period when agriculture of the country was converted into an industrial system due to the
adoption of modern methods and techniques like the use of high yielding variety seeds, tractors,
irrigation facilities, pesticides and fertilizers.
LAND REFORMS:
 Land reforms is a change in the system of land ownership, especially when it involves giving land to
the people who actually farm it and taking it away from people who own large areas for profit.
 The comprehensive land reform policy consisted of:-
a) Abolition of Zamindari and similar intermediary tenures during 1950 – 55.
b) Tenancy reforms
c) Fixation of ceiling on landholdings
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Gobind Kumar Jha9874411552
d) Consolidation of holdings.
TENANCY REFORMS:
Tenancy legislations have taken three forms:-
a) Rationalisation and regulation of rent
b) Providing security to tenants, and
c) Conferring rights of ownership for tenants.
ROLE OF RURAL BANKING IN RURAL DEVELOPMENT:

A. Credit Facilities to Farmers:- Rapid expansion of banking system has benefited rural areas by
providing services and credit facilities.
B. Eliminating Money Lenders:- Liberal credit terms and conditions of credit by commercial banks
has eliminated money lenders.
C. Control on Famines:- Government can maintain buffer stock after Green revolution to control
famines.
SOURCE OF AGRICULTURAL CREDIT:

1. Institutional Source:
 Established by government
 Also known as “Formal Source of Capital”
 Aim is to provide credit at cheap rate of interest
A. Commercial Banks:- It provides loan for all agricultural purpose for short, medium and long
term.
B. Regional Rural Banks:- They are opened up where there are no banking facility and it’s aim to
provide credit to small farmers.
C. Co-operative Credit Societies:- Its aim is to ensure timely and rapid flow of credit to the
farmers at lower rate of interest.
D. Self – Help Groups:- Credit is given from money collected by each member at very low rate of
interest.
2. Non – Institutional Source:

 Traditional source of credit
 Also known as “Informal Source of Capital”
 They charge high rate of interest
A. Money Lenders:- Famous source of providing credit to all rural people.
B. Rich Land Lords:- Provide loan to small and marginal farmers at high rate of interest.
C. Traders and Commission Agents:- Provide credit to peasants on mortgaging crops at high rate.
D. Relative and Friends:- Credit from relative and friends at no interest.
PROBLEMS OF RURAL CREDIT:

1) Insufficiency
2) Inadequate amount of sanction
3) Lesser attention of poor farmers
4) Growing over dues
5) Inadequate institutional coverage
6) Red tapism
MEASURES TAKEN TO IMPROVE CREDIT FLOW TO AGRICULTURE:

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A. Land reforms
B. Tenancy reforms
C. Regulation of higher rents
D. Provision of credit to rural farmers
E. Subsidies e.g. Urea subsidy
F. Food Security Act, 2013
G. Public distribution system
H. Minimum support price and Procurement pricing system
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

(NABARD):
 NABARD was established on 12th July, 1982 by an Act of the Parliament.
 NABARD is a Development Bank.
 NABARD is regarded as apex rural financial institution.
 NABARD, with its Head Office at Mumbai has 31 Regional Offices located in States and Union
Territory.
 NABARD is mandated for providing and regulating credit and other facilities for the promotion and
development of agriculture, small scale industries, cottage and village industries, handicrafts and
other rural crafts and other allied economic activities in rural areas.
 The major functions of NABARD include promotion and development, refinancing, financing,
planning, monitoring and supervision.
REGIONAL RURAL BANKS (RRBS):

Regional Rural Banks (RRBs) established on 2 nd October, 1975 are government owned scheduled
commercial Banks of India that operate at regional level in different states of India. These Banks are under
the ownership of Ministry of Finance, Government of India. They were created to serve rural areas with
basic banking and financial services. However, RRBs also have urban branches.
AGRICULTURAL MARKETING:
The term agricultural marketing includes all those activities which are mostly related to the procurement,
grading, storing, transporting and selling of the agricultural produce. “Agricultural marketing comprises all
operations involved in the movement of farm produce from the producer to the ultimate consumer. Thus,
agricultural marketing includes the operations like collecting, grading, processing, preserving, transportation
and financing”.
PRESENT STATE OR AGRICULTURAL MARKETING IN INDIA:

A. Sale in Villages
B. Sale in markets
C. Sale in mandis
D. Co-operative marketing
E. Regulated markets
PROBLEMS OF AGRICULTURAL MARKETING:

a) Lack of storage facility
b) Distress sale
c) Lack of transportation
d) Unfavourable mandis
e) Intermediaries
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f) Unregulated markets
g) Lack of market intelligence
h) Lack of organization
i) Lack of grading
j) Lack of institutional finance
REMEDIAL MEASURES FOR IMPROVEMENT OF AGRICULTURAL

MARKETING:
a) Establishment of regulated markets
b) Establishment of co-operative marketing societies
c) Extension and construction of additional storage and warehousing facilities
d) Expansion of market yards and other allied families for the new and existing markets
e) Provision be made for extending adequate amount of credit facilities to the farmers
f) Timely supply of marketing information to the farmers
g) Improvement and extension of road and transportation facilities
STEPS TAKEN FOR IMPROVEMENT OF AGRICULTURAL MARKETING IN

INDIA:
a) Warehouses
b) Development of marketing societies and regulated markets
c) Infrastructure facilities
d) NAFED:- The National Agricultural Co-operative Marketing Federation of India (NAFED) is also
working as an apex body of marketing co-operatives in the country.
NATIONAL AGRICULTURAL CO-OPERATIVE MARKETING FEDERATION OF

INDIA (NAFED):
NAFED was established on Gandhi Jayanti on 2nd October, 1958. NAFED is registered under the Multi
State Co-operative Societies Act. It was setup with the object to promote co-operative marketing of
agricultural produce to benefit the farmers.
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VI (B) Sectoral Trends and

GOBIND KUMAR JHA
UNIT
Issues 9874411552
Unit – VI (B)
Industryand
Sectoral Trends and Issues:- Industry and Service
Service SectorSector
NEW INDUSTRIAL POLICY, 1991:

Finance Minister Manmohan Singh introduced the NEP on July 24, 1991. The 1991 policy made ‘License,
Permit and Qouta Raj' a thing of the past. It attempted to liberalise the economy by removing bureaucratic
hurdles in industrial growth.
Main Features of New Industrial Policy, 1991:
a) Industrial delicensing
b) Deregulation of the industrial sector
c) Public sector policy (dereservation and reform of PSEs)
d) Abolition of MRTP Act (Monopoly and Restricted Trade Practice Act)
e) Foreign investment policy and foreign technology policy
f) Focus on Liberalisation, Globalisation and Privatisation.
DIVESTMENT OR DISINVESTMENT:
Divestment or disinvestment means selling a stake in a company, subsidiary or other investments. Business
and governments resort to divestment generally as a way to pare losses from a non-performing asset, exit a
particular industry or raise money.
Government often sell stakes in public sector companies to raise revenues. In recent times, the central
government has used this route to exit loss making ventures and increase non-tax revenues.
The Indian government started divesting it’s stake in public sector companies in the wake of a charge of
stance in economic policy in the early 1990s – commonly known as ‘Liberalisation, Privatisation,
Globalisation’. This has helped the centre pare it’s fiscal deficits.
MSMEs:
MSMEs are Micro, Small and Medium Enterprises that engage in the service sector or the manufacturing,
processing, production and preservation of goods. The government of India has introduced MSME in
agreement with Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. These
enterprises primarily engaged in the production, manufacturing, processing or preservation of goods and
commodities.
Micro Small Medium
Investment in Plant & Investment in Plant & Investment in Plant and
Machinery or Equipment: Machinery or Equipment: Machinery or Equipment:
NOT more than ₹ 1 crore NOT more than ₹ 10 crores NOT more than ₹ 50 crores
and Annual Turnover: NOT and Annual Turnover: NOT and Annual Turnover: NOT
more than ₹ 5 crores. more than ₹ 50 crores. more than ₹ 250 crores.
PROBLEMS FACED BY THE MSME SECTOR:

a) Financial issues
b) Regulatory issues
c) Infrastructure
d) Low productivity
e) Lack of innovation
f) Technical changes
g) Competition
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h) Skills
ROLE OF THE SERVICE SECTOR:

 India’s services sector covers a wide variety of activities such as trade, hotel and restaurants,
transport, storage and communication, financing, insurance, real estate, business services,
community, social and personal services and services associated with construction.
 The service sector has highest growth rate and is the least volatile sector.
 The most growing service sector is Information and Communication Technology.
 The services sector accounts for 53.89% of total India’s GVA (Approx 54%)
GROWTH OF BANKING SECTOR DURING THE POST-REFORM PERIOD:

 On 19th July, 1969, major process of nationalisation was carried out. It was the effort of the Prime
Minister of India, Mrs. Indira Gandhi. Fourteen commercial banks were nationalised.
 In the year 1980, another 6 banks were nationalised, taking the number to 20 banks.
 There are 12 public sector banks in India in 2022.
 After the massive merger, the total number of Public Sector Banks (PSBs) in India has come down
from 27 banks in 2017 to 12 in 2021.
 Nationalised banks have such an ownership structure where the government is the majority
shareholder i.e., >50%.
 Reserve Bank of India or RBI is the overall regulator of banking system in India.
 Banking Regulation Act 1949 is a legal framework that contains rules and regulations related the
banking system.
 RBI regulates all the nationalised and non-nationalised banks in India.
 State Bank of India is widely regarded as the best government bank in India.
 There have been major mergers in Banks in India. The most recent ones are:-
Anchor Bank Banks to be Merged with Anchor Bank
Punjab National Bank Oriental Bank of Commerce + United Bank of India
Canada Bank Syndicate Bank
Indian Bank Allahabad Bank
Bank of Baroda Dena Bank + Vijaya Bank
IMPACT OF NATIONALISATION:
 This lead to an increase in funds and thereby increasing the economic condition of the country.
 Increased efficiency
 Helped in boosting the rural and agricultural sector of the country
 It opened up a major employment opportunity for the people
 The competition decreased, which resulted in increased work efficiency
GROWTH OF INSURANCE SECTOR DURING THE POST-REFORM PERIOD:

The insurance industry till August 2000 had only two nationalised players – LIC and GIC and it’s four
subsidiaries.
Therefore, in 1999, a committee was set up under the chairmanship of R. N. Malhotra to evaluate the Indian
Insurance Industry and recommend it’s further direction. The committee submitted its report and it’s major
recommendations included:-
 Government to bring down it’s stake in insurance companies to 50%
 Private companies with a minimum paid up capital of ₹ 100 crores allowed to enter the industry.
 No single company should be allowed to transact business in both i.e. LIC and GIC.
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 Foreign companies may be allowed to enter the industry in collaboration with domestic companies,
etc.
Recognizing the global trend of market driven and competitive industry and the recommendations of the
Malhotra Committee, the insurance sector of India was opened up in August 2000. The Insurance
Regulatory and Development Authority (IRDA) was constituted in April 2000 under the IRDA Act, 1999.
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Notes
VI (C) Sectoral Trends and

GOBIND KUMAR JHA
UNIT
Issues 9874411552
Unit – VI (C)
External
Sectoral Trends and Issues: External SectorSector
BALANCE OF PAYMENTS:
The balance of international payments or simply the balance of payments of a country is a systematic record
of all international trade, economic and financial transactions of that country during a given period.
In other words, the balance of payments is a statement that records all economic transactions visible and
invisible within a given period (usually a year) between the residents of one country and the rest of the
world.
BALANCE OF TRADE:
Balance of Trade refers to the difference between the value of imports and exports of commodities or goods
or of visible items only. Thus, balance of trade is only a part of the balance of payments. (Invisible items
include services).
STRUCTURE OF BALANCE OF PAYMENTS:

The balance of accounts consists of two parts – the current account and the capital account. The current
account deals with payment for currently produced goods and services. The capital account, on the other
hand, deals with payments of debts and claims.
CAUSES OF UNFAVOURABLE BALANCE OF PAYMENTS:

1. Economic Factors:
a) Imbalance between exports and imports, b) Large Imports, c) High Domestic, d) Cyclical
fluctuations (like recession or depression), e) New Sources of Supply and New Substitutes.
2. Political Factors:
Experience shows that political instability and disturbances cause large capital outflows and hinder
inflows of foreign capital.
3. Social Factors:
a) Changes in fashions, tastes and preferences of the people bring disequilibrium in BOP by
influencing imports and exports; b) High population growth in poor countries.
MEASURES TO CORRECT DISEQUILIBRIUM IN BOP:

Following remedial measures are recommended:-
1) Export promotion
2) Restrictions and import substitution
3) Reducing inflation
4) Exchange control
5) Devaluation of domestic currency
6) Tariff
7) Quota restrictions
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Notes
VII Social Issues in

UNIT
Indian Economy
Unit – VII
Social Issues in Indian Economy
POVERTY:
Poverty is a social phenomenon in which a section of the society is unable to fulfill even it’s bare necessities
of life.
The Planning Commission of India has defined a poverty line on the basis of recommended nutritional
requirements of 2,400 calories per person per day for rural areas and 2,100 calories per person per day for
urban areas.
The all India poverty ratio in 2020-21 is 17.9%, with lower poverty in urban India compared to rural India.
Poverty can be measured in terms of the number of people living below the poverty line (with the incidence
of poverty expressed as the Headcount Ratio).
POVERTY LINE & HEAD COUNT RATIO:

Poverty Line is defined as the expenditure incurred to obtain the goods in a “Poverty Line Basket” (PLB).
The proportion of the population below the poverty line is called the Poverty Ratio or Head Count Ratio
(HCR).
POVERTY ESTIMATION IN INDIA:

In India, the most commonly used method to estimate poverty is through the measurement of income and
consumption levels. When the income or consumption of an individual or the household he/she belongs to
fall below minimum level then they are designed to be Below the Poverty Line.
The Poverty Line calculation is now carried out by the NITI Aayog (the successor to the erstwhile Planning
Commission of India) through the calculation of the poverty line based on the data collected by the National
Sample Survey Office (NSSO).
ABSOLUTE POVERTY & RELATIVE POVERTY:

Poverty is of two types: Absolute and Relative. Absolute Poverty is measured by the percentage of people
living below the poverty line or by the head count ratio. Relative poverty refers to income inequality.
CAUSES OF POVERTY IN INDIA:

a) Lack of inclusive economic growth
b) Sluggish agricultural performance and poverty
c) Non-implementation of land reforms
d) Rapid population growth
e) Unemployment and under employment
f) Low productivity in agriculture
g) Under utilised resources
h) Low rate of economic development
i) Political factors
j) Unequal distribution of income.
POVERTY ALLEVIATION PROGRAMMES IN INDIA:

a) Integrated Rural Development Programme (IRDP), 1978
b) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005
(The Act provided 100 days assured employment every year to every rural household)
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c) Jawahar Gram Samridhi Yojana (JGSY)
d) Annapurna: To provide 10 kg of food grains to the eligible senior citizens who are not registered
under the National Old Age Pension Scheme.
e) Sampoorna Gramin Rozgar Yojana (SGRY)
f) Pradhan Mantri Jan Dhan Yojana (PMJDY)
g) Pradhan Mantri Ujjwala Yojana (PMUY) (LPG connections to women below the poverty line)
h) Pradhan Mantri Garib Kalyan Yojana (PMGKY)
UNEMPLOYMENT:
Unemployment may be defined as “a situation in which the person is capable of working both physically
and mentally at the existing wage rate, but does not get job to work”.
TYPES OF UNEMPLOYMENT IN INDIA:

1) Disguised Unemployment: It is a situation in which more people are doing work than actually
required. Even if some are withdrawn, production does not suffer. In other words, it refers to a
situation of employment with surplus manpower in which some workers have zero marginal
productivity. So their removal will not affect the volume of total production overcrowding in
agriculture due to rapid growth of population and lack of alternative job opportunities may be cited
as the main reasons for disguised unemployment in India.
2) Seasonal Unemployment: It is unemployment that occurs during certain seasons of the year. In
some industries and occupations like agriculture, holiday resorts, ice factories, etc., production
activities take place only in some seasons. So they offer employment for only a certain period of time
in a year. People engaged in such type of activities may remain unemployed during the off-season.
3) Cyclical Unemployment: It is caused by trade cycles at regular interval. Generally capitalist
economies are subject to trade cycles. The down swing in business activities results in
unemployment. Cyclical unemployment is normally a short-run phenomenon.
4) Structural Unemployment: It is a natural outcome of economic development and technological
advancement and innovation that are taking place rapidly all over the world in every sphere.
5) Chronic Unemployment: If unemployment continues to be a long term feature of a country, it is
called chronic unemployment.
6) Frictional Unemployment: It is caused due to improper adjustment between supply of labour and
demand for labour. This type of unemployment is due to immobility of labour, lack of correct and
timely information, seasonal nature of work, etc.
CAUSES OF UNEMPLOYMENT:
1) Slow economic growth
2) Increase in population
3) Agriculture is a seasonal occupation
4) Joint family system
5) Fall of cottage and small industries
6) Slow growth of industrialization
7) Immobility of labour
MEASURES TO SOLVE UNEMPLOYMENT PROBLEM:

1) Change in industrial technique
2) Policy regarding seasonal unemployment
3) Change in education system
4) Expansion of employment exchanges
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5) Full and more productive employment
6) Increase in production
7) Population control
UNEMPLOYMENT ALLEVIATION PROGRAMMES IN INDIA:
1) Integrated Rural Development Programme (IRDP)
2) National Rural Employment Programme (NREP)
3) Training of Rural Youth for Self-Employment (TRYSEM)
4) Jawahar Rozgar Yojana (JRY)
5) Employment Assurance Scheme (EAS)
6) Prime Minister Rozgar Yojana (PMRY)
7) Jawahar Gram Samridhi Yojana (JGSY)
8) Sampoorna Gramin Rojgar Yojana (SGRY)
9) Swarna Jayanti Gram Swarozgar Yojana (SGSY)
10) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
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Notes
GOBIND KUMAR JHA
I B. Com.
B. Com.
Microeconomics
UNIT
(Semester
(Semester
Microeconomics
– IV)
II andEconomy
II and Indian
– IV)
Indian Economy
9874411552
??
ChapterChapter
Wise MCQWiseBooklet
MCQ Booklet
Unit – I (Monopoly)
Monopoly
1) The monopolist maximizes his short run profits if: (MC=MR/MC<MR/MC>AR/MC=AR).
2) In the long run, all the factors of production including the size of the plant are variable. A
monopoly firm will maximise profit at that level of output for which: (long run marginal cost is
equal to marginal revenue/LMC curve intersects the MR curve from below/Both A and B/None of
the above).
3) is charging different prices for the same product. (Price discrimination/Marginal
productivity theory of distribution/demand discrimination/supply discrimination)
4) Price discrimination is possible & profitable under: (oligopoly/perfect competition/pure
competition/monopoly).
5) Which of the following is a condition of monopoly? (Two or more sellers/Only one buyer/A good
with several close substitutes/Barriers to entry)
6) A “natural monopoly” is: (An oligopoly/A monopoly characterized by diseconomies of scale/A
monopoly that emerges because of economies of scale/A monopoly on a scarce natural
resources).
7) Suppose a firm can sell one unit of product for ₹ 50, two units for ₹ 45 each, three units for ₹ 40
each or four units for ₹ 35 each. When the firm sells four units, marginal revenues is equal to:
(₹5/₹20/₹25/₹30).
8) A monopoly firm is a: (price taker/price maker/price adjuster/price administration).
9) One seller and large number of buyers, no close substitutes, difficulty of entry of new firms, the
firm is the price maker, etc. are features of: (monopoly/oligopoly/imperfect
competition/monopolistic competition).
10)For a monopoly firm, the relationship between AR and MR will be: (AR=MR/AR<MR/AR>MR Or
MR<AR/AR=1/2 MR).
𝟏𝟏
11) In equilibrium, 𝑝𝑝−𝑀𝑀𝑀𝑀 ǣሺ ȀͳȀȀͲሻǤ
𝑝𝑝 𝐞𝐞
12)Price discrimination is possible under the following conditions: (existence of monopoly/separate
market/different elasticity of demand/all of the above).
13) is practices by lawyers and doctors. (First degree price discrimination/Second degree
price discrimination/Third degree price discrimination/All of the above)
14)Railways and airlines practices type of price discrimination. (First degree price
discrimination/Second degree price discrimination/Third degree price discrimination/All of
the above)
15) refers to a price discrimination in which the monopolist divides the entire market into
submarkets and different prices are charged in each submarket. Therefore, it is also termed as
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market segmentation. (First degree price discrimination/Second degree price

discrimination/Third degree price discrimination/All of the above)
16)The social cost of monopoly market is measured in terms of: (an increased total cost/an increased
marginal cost/a loss in consumer’s and producer’s surplus in relation to a competitive
market/a loss in sales revenue).
17) Price discrimination under
monopoly is of types. (One/Two/Three/Four)
18)Discriminating monopoly is possible if two markets have: (different elasticity of
demand/different average cost/same elasticity/different average cost).
19) Under pure monopoly, there will be: (no distinction between firm and industry/one firm no
industry/no firm one industry/very few firms).
20) Under monopoly, the equilibrium price is: (equal to MC/Less than MC/More than MC/Equal to
AC).
21) In monopoly, when the demand curve is elastic, MR is: (1/0/positive/negative).
22) Under conditions of pure monopoly: (there are close substitutes/there is no advertising/the firm
is a price taker/entry is blocked).
23) A monopoly is a . (Price taker/price maker/price acceptor/price neutral)
24)A natural monopoly refers to a monopoly that is defended from direct competition by:
(economies of scale over a broad range of output/a government franchise/control over a vital
input/a patent or copyright).
25) Average Revenue curve under monopoly is: (upward sloping/downward sloping/horizontal
straight line/None of these).
26) Less elastic demand for monopolists product, the degree of monopoly power would be:
(more/less/same/zero).
27) If P = ₹ 20 and MC = ₹ 10 for the corresponding output of a monopoly firm, then the degree of its
monopoly power will be: (0.5 or 50%; 0.3 or 30%; 0.2 or 20%; 0.4 or 40%).
28) If a monopoly firms faces the following demand schedule:
Px (₹) 10 9 8 7 6 5
X (Units) 1 2 3 4 5 6
Then its AR and MR for x=4 units will be: (7, 4/6, 3/4, 7/5, 8).
29) Which of the following market type has the fewest number of firm? (Perfect
competition/monopoly/monopolistic competition/oligopoly)
30) Which of the following goods is the best example of a natural monopoly? (Natural
gas/diamonds/a patented goods/first class mail)
31) The demand for the product of a monopoly firm is: (inelastic/elastic/unitary elastic/perfectly
inelastic).
32) Whose index of monopoly power is given as 𝑝𝑝−𝑚𝑚𝑚𝑚ǫሺ𝐋𝐋𝐋𝐋𝐋𝐋𝐋𝐋𝐋𝐋𝐋𝐋′𝐬𝐬𝐢𝐢𝐢𝐢𝐢𝐢𝐢𝐢𝐢𝐢Ȁ ′Ȁ
𝑝𝑝
Fisher′sȀ ሻ
33) Monopoly power in a market is likely to: (increase consumer surplus/increase community
surplus/lead to higher producer surplus/lead to lower prices and lower output).
34) In a monopoly, marginal revenue is: (equal to AR/less than AR/more than AR/initially less than
AR then more than AR).
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35) is a legal monopoly granted for a limited time to the owner of an invention. (Patent/copy
right/trade mark/none of the above)

Unit – II (Imperfect Competition)
35) II Imperfect
is a legal monopoly granted for a limited time to the owner of an invention. (Patent/copy
1) Car industry, Petrol retail, Pharmaceutical industry, Newspapers, Coffee shop retail, etc. are
right/trade mark/none of the above) Competition
examples of: (monopoly/oligopoly/monopolistic competition/monopsony).
2) An industry which UNITis dominated by a few firms, interdependence of firms, barriers to entry,
differentiated products Unitare– features
II (Imperfect Competition)
of: (monopoly/oligopoly/monopolistic
competition/monopsony).
1)
3) Car industry,
refersPetrol retail, Pharmaceutical
to a market situation or a type industry, Newspapers,
of market Coffeeinshop
organization which retail, etc.firms
a few are control
examples
the supplyof:of(monopoly/oligopoly/monopolistic
a commodity. (Monopoly/oligopoly/monopolistic competition/monopsony).competition/monopsony)
2)
4) Here, the oligopolists sell practically homogeneous products. Thisfirms,
An industry which is dominated by a few firms, interdependence of typebarriers
is foundtoinentry,
steel, copper,
differentiated
cement, petrolproductsand a few areother
features of: (monopoly/oligopoly/monopolistic
industries. (Pure oligopoly/differential oligopoly/collusive
competition/monopsony).
oligopoly/competitive oligopoly)
3)
5) In suchrefers
a casetoa afew market
firmssituation
sells similaror a type
but notof market organization
identical products under in whichthea same
few firms control It is
conditions.
the supply of a commodity. (Monopoly/oligopoly/monopolistic competition/monopsony)
found in automobiles, types, electrical appliances, cigarettes, baby food and a few other industries.
4) Here, the oligopolists sell practically homogeneous products. This type is found in steel, copper,
(Pure oligopoly/differential oligopoly/collusive oligopoly/competitive oligopoly)
cement, petrol and a few other industries. (Pure oligopoly/differential oligopoly/collusive
6) Another key feature of oligopolistic market is that firms may attempt to collude, rather than
compete. If colluding, participants are like a monopoly and can enjoy the benefits of higher profits
5) In such a case a few firms sells similar but not identical products under the same conditions. It is
over the long term. This is termed as . (Pure oligopoly/differential oligopoly/collusive
found in automobiles, types, electrical appliances, cigarettes, baby food and a few other industries.
(Pure oligopoly/differential oligopoly/collusive oligopoly/competitive oligopoly)
7) The demand curve under monopolistic competition is
6) Another key feature of oligopolistic market is that firms may attempt to collude, rather than
. (Highly Inelastic/Less
Inelastic/Less
compete. Elastic/Highly
If colluding, participants Elastic)
are like a monopoly and can enjoy the benefits of higher profits
8) over
Largethenumber
long term. This is termed as product
of sellers and buyers, differentiation,
. (Pure free entry and
oligopoly/differential exit of firms, etc. are
oligopoly/collusive
features of: (monopoly/oligopoly/monopolistic
oligopoly/competitive oligopoly) competition/monopoly).
9) The
7) In the monopolistic
demand curve under competitive
monopolistic market, each firmisis a
competition as it can
. (Highly determine the price of its
Inelastic/Less
own brand of the product.
Inelastic/Less Elastic/Highly Elastic) (Price maker/price taker/both A and B/none of the above)
10)Large
8) Restaurants,
numberHairdressers,
of sellers and Clothing,
buyers, productTV Programme, etc. are
differentiation, freeexamples
entry and of:exit of firms, etc. are
(monopoly/oligopoly/monopolistic
features of: (monopoly/oligopoly/monopolistic competition/monopsony).
competition/monopoly).
11) In the short run, the diagram for monopolistic
9) In the monopolistic competitive market, each firm is a competition is
astheit cansame as of a monopoly.
determine the price ofThe
its firm
maximises
own brand of profit where (Price maker/price
the product. . (MR=MC/MR<MC/MR>MC/AR=MR)
taker/both A and B/none of the above)
12)Restaurants,
10) An isHairdressers,
an industry Clothing,
dominated TVby a few largeetc.
Programme, firms. (Monopoly/oligopoly/monopolistic
are examples of:
(monopoly/oligopoly/monopolistic
competition/monopsony) competition/monopsony).
11)
13)In
Anthe short run, the diagram
interdependence among for themonopolistic
rival produces competition
is the key is the same
feature in as of a monopoly.
market. The firm
maximises profit where . (MR=MC/MR<MC/MR>MC/AR=MR)
(Monopoly/Oligopoly/Monopolistic competition/monopsony)
12)
14)An
An oligopolist is anisindustry
a .dominated by a few large
(Price maker/price firms. (Monopoly/oligopoly/monopolistic
taker/price searcher/price fixer)
competition/monopsony)
15)Sweezy's Kinked Demand Curve Model, the Centralised Cartel Model, The Cournot (duopoly)
13)An interdependence
Model, etc. are models among
of the rival produces is the key feature in
. (Monopoly/oligopoly/monopolistic market.
(Monopoly/Oligopoly/Monopolistic competition/monopsony)
16)In Sweezy’s oligopoly model, the demand curve faced by a firm is .
14) An oligopolist is a . (Price
(Kinked/vertical/horizontal/upward rising) maker/price taker/price searcher/price fixer)
15)Sweezy's Kinked Demand Curve Model, the Centralised Cartel Model, The Cournot (duopoly)
Model, etc. are models of . (Monopoly/oligopoly/monopolistic competition/monopsony)
16)In Sweezy’s oligopoly model, the demand curve faced by a firm is .
(Kinked/vertical/horizontal/upward rising) 30
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17)In Sweezy’s oligopoly model, the kinked demand curve produces . (A flexible price/a
sticky price or rigidity price/a prohibitive price/an administered price)
18) is characterized by rigid of inflexible prices. (Monopoly/oligopoly/monopolistic
19)Which of the following market types has only a few competing firms? (Perfect
competition/monopolistic competition/monopoly/oligopoly)
20)An industry with a large number of firms, differentiated products and free entry and exit is called:
(oligopoly/monopoly/monopolistic competition/perfect competition).
21)In monopolistic competition, each firm supplies a small part of the market. This occurs because:
(there are barriers to entry/firms produce differentiated products/there are no barriers to
entry/there are a large number of firms).
22)In monopolistic competition, the products of different sellers are assumed to bring: (similar but
slightly different/identical perfect substitutes/either identical or differentiated/unique without
any close or perfect substitutes).
23)In an industry with a large number of firms: (collusion is impossible/one firm will dominate the
market/each firm will produce a large quantity, relative to market demand/competition is
eliminated).
24)Which of the following is an example of a monopolistically competitive industry? (Wheat
farming/Colleges and universities/The local electricity producer/The domestic automobile
producing industry)
25)All of the following are examples of product differentiation in monopolistic competition except:
(new and improved packaging/lower price/acceptance of more credit cards than the
competition/location of the retail store).
26) is based on the assumption that oligopoly firms act Independently even though firms are
interdependent in the market. (Non-collusive oligopoly model/the centralised cartel model/the
cournot model/price leadership model)
27)The formation of cartel by a few rival firms would imply: (collusive oligopoly/non collusive
oligopoly/pure oligopoly/differentiated oligopoly).
28)If the oligopoly firms form a cartel then it is a sign of: (pure oligopoly/differentiated
oligopoly/collusive oligopoly/non collusive oligopoly).
29)Classical oligopoly models are related to: (collusive oligopoly/non collusive oligopoly/price
leadership model/none of the above).
30)‘Cartels' are example for: (collusive oligopoly/non collusive oligopoly/monopsony/none of the
above).
31)Which of the following oligopoly models is concerned with the maximization of joint profits?
(Price leadership model/Bertrand's model/Collusive model/Edgeworth's model)
32)In short run, a firm is monopolistic competition: (always earns profits/incurs losses/earns normal
profit only/may earn normal profit, super normal profit or incur losses).
33)OPEC is: (Organisation of Petroleum Exporting Country/Organisation of Pre-European
Commission/Oil Producing Economies Caucus/None of the above).
34)When there firms get together and agree to set prices and outputs so as to maximise total industry
profits, they are known as a cartel. The is perhaps the best known example of an
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international cartel. (Organisation of petroleum exporting countries/Reliance/Tata/All of the

above)
35)Which of the following market types have a large number of firms that sell similar but slightly
different products? (Perfect competition/oligopoly/monopolistic competition/monopoly)
36)According to the Bertrand Model, a firm will assume that rival firms will: (keep their rates of
production constant/keep their prices constant/match price cut but not price increases/match
price increases but not price cuts).
37)The refrigerator industry is an example of: (monopolistic
competition/monopoly/oligopoly/perfect competition).
38)The petroleum industry is an example of: (monopolistic competition/pure
oligopoly/duopoly/differentiated oligopoly).
39)The concept of kinked demand curve is related to: (Paul M Sweezy/Joan Robinson/E. H.
Chamberline/E. L. Edgeworth).
40)Kinked demand curve explain which features of oligopoly? (Selling cost/price rigidity/non price
competition/product differentiation)
Unit – III (Factor Price Determination)

1) When marginal productivity of labour is expressed in money terms we obtain: (marginal physical
product of labour/value of the marginal product of labour/marginal revenue product of
labour/all of these).
2) is the change in total revenue following a change in the employment of labour. (Marginal
physical product of labour/value of the marginal product of labour/marginal revenue product
of labour/all of these)
3) Marginal productivity theory of wage states that wage of labour equals: (VMPL=MRPL/MPPL –
MRPL/VMPL – MPPL/All of the above).
4) The individual labour supply curve is: (upward rising/downward sloping/backward
bending/horizontal).
5) The aggregate labour supply curve is: (upward rising/downward sloping/backward
6) When there is a single buyer of labour in the market, is said to exist in the labour market.
(Monopsony/Monopoly/Both A and B/None of the above)
7) The value of marginal product (VMP) is equal to: (VMP=MPP x MR/VMP=MPP x P/VMP –
MPP÷P/VMP – MPP – P) .
8) According to which theory, remuneration of cache factor of production tends to be equal to its
marginal productivity? (Marginal productivity theory/classical productivity theory/modern
productivity theory/recardian theory)
9) is the addition which means use of one extra unit of the factor makes to the total
production. (Marginal productivity/average productivity/total productivity/all of these)
10)So long as the of a factor is less than the , the entrepreneur will go on employing
more and more units of the factors. (Marginal cost, Marginal productivity/Marginal
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36)According to the Bertrand Model, a firm will assume that rival firms will: (keep their rates of
production constant/keep their prices constant/match price cut but not price increases/match
price increases but not price cuts).
37)The refrigerator industry is an example of: (monopolistic
competition/monopoly/oligopoly/perfect competition). Gobind Kumar Jha 9874411552
38)The petroleum industry is an example of: (monopolistic competition/pure
oligopoly/duopoly/differentiated oligopoly).
39)The concept of kinked demand curve is related to: (Paul M Sweezy/Joan Robinson/E. H.
Chamberline/E. L. Edgeworth).
III Factor Price
40)Kinked demand curve explain which features of oligopoly? (Selling cost/price rigidity/non price
competition/product differentiation)
Determination
UNIT
Unit – III (Factor Price Determination)
1) When marginal productivity of labour is expressed in money terms we obtain: (marginal physical
product of labour/value of the marginal product of labour/marginal revenue product of
labour/all of these).
2) is the change in total revenue following a change in the employment of labour. (Marginal
physical product of labour/value of the marginal product of labour/marginal revenue product
of labour/all of these)
3) Marginal productivity theory of wage states that wage of labour equals: (VMPL=MRPL/MPPL –
MRPL/VMPL – MPPL/All of the above).
4) The individual labour supply curve is: (upward rising/downward sloping/backward
5) The aggregate labour supply curve is: (upward rising/downward sloping/backward
6) When there is a single buyer of labour in the market, is said to exist in the labour market.
(Monopsony/Monopoly/Both A and B/None of the above)
7) The value of marginal product (VMP) is equal to: (VMP=MPP x MR/VMP=MPP x P/VMP –
MPP÷P/VMP – MPP – P) .
8) According to which theory, remuneration of cache factor of production tends to be equal to its
marginal productivity? (Marginal productivity theory/classical productivity theory/modern
productivity theory/recardian theory)
9) is the addition which means use of one extra unit of the factor makes to the total
production. (Marginal productivity/average productivity/total productivity/all of these)
10)So long as the of a factor is less than the , the entrepreneur will go on employing
more and more units of the factors. (Marginal cost, Marginal productivity/Marginal
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productivity, Marginal cost/Average cost, Average productivity/Average productivity, Average

cost)
11)Which of the following are not the assumptions of the theory of Marginal Productivity? (Law of
variable proportions/law of diminishing marginal revenue/long run analysis/imperfect
competition)
12)The states that the price of labour, i.e., wage rate, is determined according to the marginal
product of labour. (Marginal productivity theory of wage/Average productivity theory of
wage/Marginal demand theory of wage/Marginal revenue theory of wage)
13) Marginal productivity theory of wage was stated by the neoclassical economists, especially by
in the late 1890s. (T. II Von Thunen/Karl Mcngor/Walras/J. B. Clark)
14)Marginal revenue product (MRP) of firm is: (MRP=MPP x MR/MRP – MPP – MP/MRP = MPP x
MR/MRP – MPP÷P).
15)If the product market is perfectly competitive then:
(VMP=MRP/VMP>MRP/VMP<MRP/VMP<AFC/None of the above).
16) is a process in which the representatives of a labour organization and the representatives of
business organization meet and attempt to negotiate a contract or agreement, which specifies the
nature of employee-employer union relationship. (Collective bargaining/Wage
determination/Marginal productivity theory of wages/All of the above)
17)According to Ricardo, rent arises for two main reasons: (scarcity of land as a factor/differences in
the fertility of the soil/both A and B/None of the above).
18)The refers to the income produced when the demand for products increases suddenly. It is
used for a short period of time. (Quasi rent/differential rent/scarcity rent/surplus rent)
19) can also be expressed in terms of revenue, which is as follows: Total Revenue – Total
Variable Cost. (Marginal rent/Zero rent/Quasi rent/Negative rent)
20)Total Revenue – (Total Explicit Cost + Total Implicit Cost) = . (Gross Profit/Net
Profit/Accounting Profit/Normal Profit)
21)Total Revenue – Total Explicit Costs = . (Gross Profit/Net Profit/Accounting
Profit/Operating Profit)
22) propounded a theory called innovation according to which profits are the reward for
innovation. (Joseph Schumpeter/Knights/F. W. Hawley/None of the above)
23) advocated that innovation is the introduction of a new product, new technology, new
method of production and new sources of raw materials. (Joseph Schumpeter/Knights/F. W.
Hawley/Francis L. Walker)
24)The uncertainty bearing theory of profits, which was propounded by Prof. . (Joseph
Schumpeter/Knights/F. W. Hawley/Francis L. Walker)
25) According to , profits is a reward for the uncertainty bearing and not the risk taking.
(Schumpeter’s theory/Knight’s theory/F. W. Hawley's theory/The Rent theory)
26)The Marginal Productivity Theory of Profit was propounded by: (Marshall/Joseph
Schumpeter/Knights/None of the above).
27) The marginal productivity theory relates to the: (Remuneration of resources/Demand & Supply
of resources/Concept of Scarcity/Non-competitive aspect of the resource market).
28) Which of the following concepts are related to Ricardian rent theory? (Scarcity rent/Surplus
rent/Differential rent/Both A and C)
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29) ‘Rent is a differential surplus' – this statement is connected to: (Modern rent theory/Ricardian
rent theory/Keynesian rent theory/Non-keynesian rent theory).
30) assumed that land had only one use ‘to grow corn'. (Modern rent theory/Ricardian rent
theory/Keynesian rent theory/Non-keynesian rent theory)
31) According to , rent is a surplus which arises due to difference between actual earning and
transfer earning. (Modern rent theory/Ricardian rent theory/Keynesian rent theory/Non-
keynesian rent theory)
32) According to , rent arises due to scarcity of land. (Modern rent theory/Ricardian rent
theory/Keynesian rent theory/Non-Keynesian rent theory)
33) If the supply curve of a factor is fully elastic then its economic rent will be:
(zero/positive/negative/infinite).
34) If the supply curve of land is perfectly inelastic then economic rent will be: (equal to its transfer
earning/equal to its actual earning/zero/negative).
35) The concept of Quasi rent was popularized by: (David Ricardo/Alfered Marshall/J. M.
Keynes/Adam Smith).
36) Which of the following is not the assumption of the Marginal Productivity Theory of Distribution?
(Homogeneity of a factor/Perfect competition in the factor market/All factors, except one are
variable/Given stock of each factor and full employment)
37) As a result of an increase in capital, ceteris paribus, the marginal productivity of labour: (remains
constant/increase/decrease/none of the above).
38) The producer’s demand for a factor of production is governed by the of the factor. (Price
will decrease/Marginal Productivity/Availability/Profitability)
39) According to Joseph Schumpeter, profit is the reward for: (innovation/uncertainty bearing/risk
taking/management).
40) “Rent is creation of value, not of wealth”. Who made this observation.? (Adam Smith/David
Ricardo/Alfred Marshall/A. C. Pigou)
41) According to Keynes, interest is a payment for: (consumer’s preference/producer’s
preference/liquidity preference/state bank’s preference).
42) Prof. Knight is famous for his theory of: (Rent/Profit/Population/Wages).
43) Normal profit is: (part of total cost/part of economic profit/total revenue – total cost/total
revenue – implicit cost).
44) Economic profit is: (part of total cost/total revenue – total cost/total revenue – explicit
cost/total variable cost – total fixed cost).
45) The marginal productivity of labour is: (the incremental output due to an increase in capital,
ceteris paribus/the incremental output due to an increase in labour, ceteris paribus/the
incremental output due to a change in technology, ceteris paribus/the incremental output due to a
change in Land).
46) Ricardian Theory assumes that labour is within the country.
(Inefficient/Heterogeneous/Homogenous/Sufficient)
47) Normal profit is called normal because: (it is neither very high nor very low/it is minimum
acceptable to the producer/it is minimum which buyer wants to pay/it is the maximum allowed
by government).
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48) Economic rent can accrue to: (land only/capital only/specialised technical personnel only/any of
the factors of production).
49) A factor of production, whose supply is fixed in the short-run, may get additional earning. These
earnings are generally referred to as: (surplus value/quasi rent/transfer earnings/super normal
profits).
50) The classical theory explained interest as a reward for: (parting with
liquidity/abstinence/saving/inconvenience).
Unit – IV (Basic Issues in Economic Development)

1) = GDP at market price – Indirect taxes (T) + Subsidies (SU). (GDP at factor cost/NDP at
factor cost/GNP at factor cost/NNP at factor cost)
2) National income is correctly estimated by: (GDPmp/GNPmp/NNPfc/NNPmp).
3) If Nominal GDP = ₹ 20,00,000 crores and GDP deflator = 1.25, then: (Real GDP = ₹ 16,00,000
crores/Real GDP = ₹ 17,00,000 crores/Real GDP = ₹ 15,00,000 crores/None of the above).
4) If Nominal GDP = ₹ 10,00,000 crores and Real GDP = ₹ 8,00,000 crores then, GDP deflator will be:
(1.025/1.25/1.30/1.35).
5) Which of the following agencies is responsible for computing the National Income Statistics in
India? (RBI/Central Statistical Office/Ministry of Finance/Planning Commission)
6) Which of the following is not an indicator of an economically developed nation? (High levels of
literacy/Low death rate/High per capita income/A high proportion of labour in the primary
sector)
7) Which of the following is referred to as the developed economies? (Countries earning huge
industrial profits/Countries proficient in trade and export/Countries having high per capita
income/Countries advanced in technology)
8) Rate of growth of an economy is measured in terms of: (per capita income/industrial
development/number of people who have been listed above poverty line/national income).
9) The standard of living in a country is represented by its: (national income/per capita
income/poverty ratio/unemployment rate).
10)Which is the best measure of Economic Development? (GNP or Per Capita Income/Measurement
through Occupational Pattern/Standard of Living Criterion/Economic Welfare as an Index of
Economic Development)
11)Which of the following is not a feature of economic underdevelopment? (Less dependence on
primary activities/Poor infrastructural facilities/Low standard of living/Low level of income)
12)Which of the following is not a feature of a developed economy? (High rate of capital
formation/Strong social and economic infrastructural base/High dependency ratio/High
standard of living)
13) is the total value of goods and services produced within the country during a year. (Gross
Domestic Product/Gross National Product/Net Domestic Product/Net National Product)
14) is the market value of the output of final goods and services produced in the domestic
territory of a country during an accounting year. (GDP at market price/GDP at factor cost/NDP
at market price/NNP at market price)
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48) Economic rent can accrue to: (land only/capital only/specialised technical personnel only/any of
the factors of production).
49) A factor of production, whose supply is fixed in the short-run, may get additional earning. These
earnings are generally referred to as: (surplus value/quasi rent/transfer earnings/super normal
profits).
IV Basic Issues in
50) The classical theory explained interest as a reward for: (parting with
liquidity/abstinence/saving/inconvenience).
Economic Development
Unit –UNIT
IV (Basic Issues in Economic Development)
1) = GDP at market price – Indirect taxes (T) + Subsidies (SU). (GDP at factor cost/NDP at
factor cost/GNP at factor cost/NNP at factor cost)
2) National income is correctly estimated by: (GDPmp/GNPmp/NNPfc/NNPmp).
3) If Nominal GDP = ₹ 20,00,000 crores and GDP deflator = 1.25, then: (Real GDP = ₹ 16,00,000
crores/Real GDP = ₹ 17,00,000 crores/Real GDP = ₹ 15,00,000 crores/None of the above).
4) If Nominal GDP = ₹ 10,00,000 crores and Real GDP = ₹ 8,00,000 crores then, GDP deflator will be:
(1.025/1.25/1.30/1.35).
5) Which of the following agencies is responsible for computing the National Income Statistics in
India? (RBI/Central Statistical Office/Ministry of Finance/Planning Commission)
6) Which of the following is not an indicator of an economically developed nation? (High levels of
literacy/Low death rate/High per capita income/A high proportion of labour in the primary
sector)
7) Which of the following is referred to as the developed economies? (Countries earning huge
industrial profits/Countries proficient in trade and export/Countries having high per capita
income/Countries advanced in technology)
8) Rate of growth of an economy is measured in terms of: (per capita income/industrial
development/number of people who have been listed above poverty line/national income).
9) The standard of living in a country is represented by its: (national income/per capita
income/poverty ratio/unemployment rate).
10)Which is the best measure of Economic Development? (GNP or Per Capita Income/Measurement
through Occupational Pattern/Standard of Living Criterion/Economic Welfare as an Index of
Economic Development)
11)Which of the following is not a feature of economic underdevelopment? (Less dependence on
primary activities/Poor infrastructural facilities/Low standard of living/Low level of income)
12)Which of the following is not a feature of a developed economy? (High rate of capital
formation/Strong social and economic infrastructural base/High dependency ratio/High
standard of living)
13) is the total value of goods and services produced within the country during a year. (Gross
Domestic Product/Gross National Product/Net Domestic Product/Net National Product)
14) is the market value of the output of final goods and services produced in the domestic
territory of a country during an accounting year. (GDP at market price/GDP at factor cost/NDP
at market price/NNP at market price)
35
42
15)National Income refers to: (money value of goods and services produced in a country during
a year/money value of stocks and shares of a country during a year/money value of capital goods
produced by a country during a year/money value of consumer goods produced by a country
during a year).
16)Real National Income denotes: (national income at constant prices/per capita income/national
income at current prices/net factor income).
17)Who is the Finance Minister of India? (Arun Jaitley/Narendra Modi/Nirmala Sitaraman/Piyush
Goyal)
18)GDP can be measured as: [The aggregate money value of output produced by the economy over a
year (Product Method)/Adding all the incomes generated by the act of production (Income
Method)/Adding all the expenditure & Net export (Expenditure Method)/All of the above].
19) = GDP + net property income from abroad. (GNP/NDP/NNP at Market Price/NNP at
Factor Cost)
20)Which is the best measure of economic growth of a country? (GNP/GDP/Net Revenue/None of the
above)
21) Net Factor Income from Abroad added to NDP gives: (GNP/NNP/GDP/Per Capita Income).
22)GNP at market price is defined as: (the market value of all final goods and services produced in an
economy taking into account net factor income from abroad/the market value of all final goods
and services produced in an economy/the market value of all final goods and services produced in
an economy plus indirect tax/the market value of all final goods and services produced in an
economy plus net indirect taxes).
Unit – V (Basic Features of Indian Economy)

1) sector is also known as tertiary sector of the economy. (Agriculture & Allied Sector/Industry
Sector/Services Sector/Primary Sector)
2) Currently Services Sector contributes of Indian GDP at current prices.
(16%/27%/55%/53%)
3) is the largest sector of India. (Agriculture & Allied Sector/Industry Sector/Services
Sector/Primary Sector)
4) Which of the following is close to the sectoral composition of national income in India (in terms of
contribution to GDP)? (Primary sector – 40.0, Secondary Sector – 30.0, Tertiary Sector –
30.0/Primary sector – 30.0, Secondary sector – 40.0, Tertiary sector – 30.0/Primary sector –
20.0, Secondary sector – 26.0, Tertiary sector – 54.0/None of the above)
5) The maximum share of India’s National Income comes from: (primary sector/secondary
sector/tertiary sector/foreign sector).
6) Which of the following activities is included in the tertiary sector of India?
(Forestry/Mining/Transport/Manufacturing)
7) The sector which contributes the least toward India’s National Income at present is: (services
sector/secondary sector/primary sector/financial sector).
8) refers to distribution of working population across primary, secondary and tertiary sector
of the economy. (Occupational structure/Sector distribution/Both A and B/None of the above)
36
43
19) = GDP + net property income from abroad. (GNP/NDP/NNP at Market Price/NNP at
Factor Cost)
20)Which is the best measure of economic growth of a country? (GNP/GDP/Net Revenue/None of the
above)
21)Net Factor Income from Abroad added to NDP gives: (GNP/NNP/GDP/Per Capita Income).
22)GNP at market price is defined as: (the market value of all final goods and services produced in an
economy taking into account net factor income from abroad/the market value of all final goods
and services produced in an economy/the market value of all final goods and services produced in
V Basic Features of
an economy plus indirect tax/the market value of all final goods and services produced in an
economy plus net indirect taxes).
Indian Economy
UnitUNIT
– V (Basic Features of Indian Economy)
1) sector is also known as tertiary sector of the economy. (Agriculture & Allied Sector/Industry
Sector/Services Sector/Primary Sector)
2) Currently Services Sector contributes of Indian GDP at current prices.
(16%/27%/55%/53%)
3) is the largest sector of India. (Agriculture & Allied Sector/Industry Sector/Services
Sector/Primary Sector)
4) Which of the following is close to the sectoral composition of national income in India (in terms of
contribution to GDP)? (Primary sector – 40.0, Secondary Sector – 30.0, Tertiary Sector –
30.0/Primary sector – 30.0, Secondary sector – 40.0, Tertiary sector – 30.0/Primary sector –
20.0, Secondary sector – 26.0, Tertiary sector – 54.0/None of the above)
5) The maximum share of India’s National Income comes from: (primary sector/secondary
sector/tertiary sector/foreign sector).
6) Which of the following activities is included in the tertiary sector of India?
(Forestry/Mining/Transport/Manufacturing)
7) The sector which contributes the least toward India’s National Income at present is: (services
sector/secondary sector/primary sector/financial sector).
8) refers to distribution of working population across primary, secondary and tertiary sector
of the economy. (Occupational structure/Sector distribution/Both A and B/None of the above)
36
44
9) The activity of forestry and fishing are included in: (Agriculture & Allied Sector/Industry
Sector/Services Sector/Tertiary Sector).
10)Which sector is also known as the primary sector of the economy? (Agriculture & Allied
Sector/Industry Sector/Services Sector/Tertiary Sector)
11) Currently Agriculture & Allied Sector contributes of Indian GDP at current prices.
{16%/27%/57%/53%}
12)Agriculture sector provides jobs to around population of India. {27%/57%/53%/58%}
13) sector includes ‘Mining & Quarrying’, Manufacturing (Registered & Unregistered), Gas,
Electricity, Construction and Water Supply. (Agriculture & Allied Sector/Industry
Sector/Services Sector/Tertiary Sector)
14) In economics, structural change of the economy means: (a subsistence economy may be
transformed into a manufacturing economy/a regulated mixed economy may be liberalised/Both
A and B/None of the above).
15) Main feature of structural change in Indian economy during the plan period is: (substantial
increase in share of service sector in GDP/emergence of industrial sector as the highest
contributing sector in GDP/emergence of industrial sector as the highest employment generating
sector/All of the above).
16) When did India gave its first five year plan? (1950/1951/1947/1949)
17)Economic reforms in India were initiated in the year: (1990/1991/1992/1993).
18) 14 major commercial banks were nationalized on: (19th July, 1969/19th July, 1980/19th July,
1975/19th July, 1991).
19) is also known as the secondary sectors of the economy. (Agriculture & Allied
Sector/Industry Sector/Services Sector/Tertiary Sector)
20) Currently Industry Sector contributes of Indian GDP at current prices.
(16%/25%/57%/53%)
21) includes ‘Financial, Real estate & professional services, Public Administration, Defense and
other services, trade, hotels, transport, communication and services related to broadcasting.
(Agriculture & Allied Sector/Industry Sector/Services Sector/Primary Sector)
22) The occupational structure in India shows: (maximum share of the primary sector/maximum
share of the secondary sector/maximum share of the tertiary sector/minimum share of the
primary sector).
23) Which one of the following occupational structure is very close to that of India? (Primary activities
– 30.0, Secondary activities – 35.0, Tertiary activities – 35.0/Primary – 12.0, Secondary – 32.0,
Tertiary – 56.0/Primary – 49.0, Secondary – 24.0, Tertiary – 27.0/None of the above)
24) Which of the following is the correct sequence in the decreasing order of contribution of different
sectors to the GDP of India? (Services – Industry – Agriculture/Services – Agriculture –
Industry/Industry – Services – Agriculture/Industry – Agriculture – Services)
25) Occupational structure refers to: (distribution of working force among the different
occupations/the nature of difference occupations/size of working force in a country/number of
people living in a country).
37
45
VI (A) Sectoral Trends and

GOBIND KUMAR JHA
UNIT
Issues 9874411552
Unit – VI(A) (Sector Trends and Issues:Agricultural Sector

Agricultural Sector)
1) Which of the following is not a part of the land reforms policy in India? (Establishment of tenancy
rights/Regulation of rent/Imposition of land ceiling/Imposition of agricultural income tax)
2) Green Revolution in Indian agriculture implies: (a technological reform/sudden boost in yield per
hectare/an expansion in area under HYV seeds/all of the above).
3) The package approach in Green Revolution in India implies: (a proper mix of seed, fertilizer,
pesticides and irrigation/a proper mix of credit, marketing and insurance/a proper mix of
transport, irrigation and electricity/a proper mix of horticulture, floriculture and fisheries).
4) The in India was an effort to increase agriculture production in India via a package of
industrial agriculture technologies, such as hybrid seeds, fertilizers, pesticides and irrigation.
(Green revolution/Land reforms/Rural credit/Agricultural marketing)
5) The Green Revolution within India commenced in the early that led to an increase in food
grain production especially in Punjab, Haryana and Uttar Pradesh. (1960s/1970s/1980s/1990s)
6) refers to an improvement in agro-economic institutions which included measures and
policies relating to redistribution of land, regulation of rent, improving the conditions of tenancy,
cooperative organization, agricultural education and so on. (Green revolution/Land
reforms/Rural credit/Agricultural marketing)
7) Agricultural productivity is normally measured by: (Yield of food grains per
hectare/Employment of agricultural resources/Labour force participation in productive
works/Investment in non farm activities).
8) Which of the following is a ‘general factor (Human Factor)’ causing low productivity in Indian
agriculture? (Defective land tenure system/Overcrowding in agriculture/Lack of High Yielding
Variety seeds/Insufficient irrigation facilities)
9) Which of the following is an ‘institutional factor' causing low productivity in Indian agriculture?
(Defective land tenure system/Pressure of population on land/insufficient irrigation
facilities/improper marketing)
10)Traditional methods of Cultivation, Old implements, Insufficient irrigation facilities, Problems of
soil, Lack of credit facility, Lack of High Yielding Variety (HYV) seeds, Improper marketing, etc. are
for low productivity of agriculture. (Human factors/Technical factors/Institutional
factors/General factors)
11)Which of the following is a part of institutional reform policy for Indian agriculture? (Application
of HYV seeds/Application of improved process of cultivation/Abolition of Zamindari
system/Application of chemical fertilizers)
12)Measures of Land Reforms are: (abolition of intermediaries between the State and
tenants/Tenancy reforms/Fixation of ceiling on landholdings/all of the above).
13)The ‘Operation Barga' Scheme in West Bengal was a part of: (Land reforms
programme/Technological reforms programme/Structural reforms
programme/Macroeconomics stabilization programme).
14)Initiation of cooperative farms in Indian agriculture is a part of: (Technical reforms
programme/Institutional reforms programme/Structural reforms
programme/Macroeconomics stabilization programme).
38
46
15)Which of the following is not a cause of rural indebtness in India? (Rural poverty/Expenses to
meet social obligation/Formation of self help groups/Inherited debt)
16)Which of the following is not an institutional source of rural credit in India? (Rural money
lenders/Commercial banks/Regional rural banks/Cooperative societies)
17)A was imposed to promote equality in distribution of land. (Taxes/Subsidies/Ceiling of
land holdings/None of the above)
18)The productivity of which crop was primarily concern with the production in the First Green
Revolution? (Pulses/Oilseeds/Wheat/Fruits & vegetables)
19)Low productivity for agriculture in India is results in: (poor irrigation facilities/heavy dependence
on monsoon/absence of new technology/all of the above).
20) In which year did the Green Revolution start in India? (1966-67/1967-68/1968-69/1969-70)
21)PMKSY is scheme to: (insure farmers against droughts/improve farm productivity and ensure
better utilization of resources in the country/train the unemployed and developed skilled
labour/educate the poverty stricken people).
22) HYV seeds were introduced to Indian farmers as a result of: (white revolution/green
revolution/orange revolution/blue revolution).
23) Low productivity of agriculture in India is not caused by: (inadequate availability of
inputs/subdivision of land holdings/less area under cultivation/poor finance facilities).
24) The dependency burden is: (a measure of the degree to which the less developed countries are
dependent on the rich industrial countries/the average number of children that a woman gives
birth to during her lifetime/the number of babies born per 1000 persons/the percent of the
population that is below 15 and above 65 years of age).
25) Which of the following is not an indicator that is used to compute the Human Development Index?
(Life expectancy at birth/real GDP per capita/infant mortality rate/adult literacy rate)
26) Which of the following is the ‘informal route of credit in financial sector? (Credit cards/loan
against gold from financial Institute/debit cards/money lenders)
27) refers to the maximum and minimum limits to the size of a holding that one is permitted to
hold. (Ceiling on land holdings/consolidation of holdings/security of tenured/all of the above)
28) What do the land reforms aim at? (Rent regulation/land holding pattern/abolition of
intermediaries/all of the above)
29) Which of the following is an institutional source of rural credit in India? (Rural money
lenders/Landlords/Regional rural banks/Relatives and friends)
30) National Bank for Agriculture and Rural Development (NABARD) was established in the year:
(1982/1980/1975/1971).
31) The Regional Rural Bank Act was passed in India in the year: (1980/1979/1975/1986).
32)The long term credit needs of the farmers in India have normally been met by: (primary
cooperative credit societies/Land Development Banks & NABARD/rural money lenders/All of
the above).
33) includes all those activities which are mostly relates to the procurement, grading, storing,
transporting and selling of the agricultural produce. (Green revolution/Land reforms/Rural
credit/Agricultural marketing system)
39
47
34) Intensive cultivation means: (cultivation on the same plot of land more than once in a
year/application of more machine power in cultivation process/application of more human
labour in cultivation process/intensive use of hires workers for cultivation).
35) aimcultivation
34) Intensive at removing all the(cultivation
means: obstacles inon
agricultural
the samedevelopment that arises
plot of land more thandue toin
once land
a
holding pattern, agricultural
year/application tenancy
of more machine and more.
power (Tax reforms/Trade
in cultivation reforms/Land
process/application of more human
reforms/None of the above)
labour in cultivation process/intensive use of hires workers for cultivation).
35) aim at removing all the obstacles in agricultural development that arises due to land
Unit – VIpattern,
(B) (Sectoral Trends and Issues: Industry and Service
VI (B)
holding agricultural tenancy and more. (Tax reforms/Trade reforms/Land
reforms/None of the above) Sectoral Trends and
Sector)
Issues
Unit – VI (B)UNIT (Sectoral Trends and Issues: Industry and Service
1) NITI in the NITI Aayog stands for: (National Institution for Transferring India/National
Sector)
Industry
Institution for Transforming India/National Income for and Service
Transferring Sector
India/National Institution
for Travelling India).
2)
1) Nationalisation
NITI in the NITI of banks
Aayog was done
stands with the purpose
for: (National Institution of: for
(financing the industries/improving
Transferring India/National
credit facilities/consolidating
Institution the economy/improving
for Transforming India/National Income for security of deposits).
Transferring India/National Institution
3) Which of the following
for Travelling India). nationalized banks have been merged recently? (New Bank of India, Bank
of India and SBI/Central
2) Nationalisation of banks Bank
was done of India,
withCorporation
the purposeBank and Bankthe
of: (financing of Baroda/Karur Bank, Bank of
industries/improving
India and Vijaya Bank/Bank of Baroda, Vijaya Bank and
credit facilities/consolidating the economy/improving security of deposits). Dena Bank)
4) To
3) solve
Which ofthe
thebalance
followingof nationalized
payment crisis in 1991,
banks havethe Indian
been mergedRupee was (New
recently? against
Bank foreign
of India, Bank
currencies. (Appreciated/Depreciated/Revalued/Devalued)
of India and SBI/Central Bank of India, Corporation Bank and Bank of Baroda/Karur Bank, Bank of
5) Which of the
India and following
Vijaya institutions
Bank/Bank are a part
of Baroda, Vijayaof the
Bankfinancial
and Dena sector of a country? (Foreign
Bank)
4) Exchange
To solve the Market/Banking
balance of payment and Non Banking
crisis in 1991, Financial
the Indian Institutions/Stock
Rupee was Exchange Market/All of
against foreign
the above) (Appreciated/Depreciated/Revalued/Devalued)
currencies.
6) The
5) Whichindustrial license was
of the following abolishedare
institutions foramost industries
part of except
the financial sector of aduring
country?the(Foreign
1991 reforms.
(Steel/Food processing/Liquor/All of the above)
Exchange Market/Banking and Non Banking Financial Institutions/Stock Exchange Market/All of
7) the
The above)
process of transferring the ownership, management and control of a public sector partially or
entirely to the license
6) The industrial private was
sector is known
abolished foras: (globalisation/liberalisation/privatization/none
most industries except during the 1991 reforms. of
these).
(Steel/Food processing/Liquor/All of the above)
8) Which of the
7) The process of following is thethe
transferring outcome of themanagement
ownership, globalizationand of acontrol
country’sof aeconomy?
public sector partially or
(Outsourcing/Privatization/Liberalization/None of the above)
entirely to the private sector is known as: (globalisation/liberalisation/privatization/none of
9) Which
these). of the following industries were reversed exclusively for the public sector after the
8) Economic
Which of the Reforms
followingof 1991?
is the(Railways/Metro transport/Communication/None
outcome of the globalization of a country’s economy? of the above)
10)Which of the following concepts was not a part
(Outsourcing/Privatization/Liberalization/None of the above) of the economic reforms under the New Economic
9) Policy
Which inof 1991? (Centralization/Liberalization/Globalization/Privatization)
the following industries were reversed exclusively for the public sector after the
11)Which
Economic Reforms of 1991?not
of the following was a part of the structural
(Railways/Metro adjustment programs under
transport/Communication/None the above)
of the New
10)Economic
Which of the Policy in 1991?
following (Fiscalwas
concepts reforms/Tax
not a partreforms/Balance
of the economic reformsof Paymentunder the New Economic
Adjustment/Industrial reforms)
Policy in 1991? (Centralization/Liberalization/Globalization/Privatization)
12)
11)The
WhichSecond
of theFive Year Plan
following was(1956-61)
not a part of theIndia emphasized
structural on: (theprograms
adjustment growth ofunder
agricultural
the New
sector/the growth of heavy and core sector industries/the
Economic Policy in 1991? (Fiscal reforms/Tax reforms/Balance of Payment growth of banking and finance/the
growth of only small scale
Adjustment/Industrial industries).
reforms)
13)
12) The full
Second Five Year Plan (Micro,
form of ‘MSME' is: (1956-61) Small and emphasized
of India Medium Enterprises/Modern, Small and Medium
on: (the growth of agricultural
Enterprises/Medium
sector/the growth ofand heavy Semi andMedium Enterprises/Mega,
core sector industries/the Small and Micro
growth Enterprises).
of banking and finance/the
growth of only small scale industries).
40
13)The full form of ‘MSME' is: (Micro, Small and Medium Enterprises/Modern, Small and Medium
Enterprises/Medium and Semi Medium Enterprises/Mega, Small and Micro Enterprises).
40
48
14) The MSME Development Act has been passed in India in the year of:
(2008/2010/2007/2006). 15)In September, 2018 the government of India has announced the
merger of the following public
sector banks: (Dena Bank, Vijaya Bank and Bank of Baroda/United Bank of India, Commercial
Bank and Bank of India/Corporation Bank, Allahabad and Central Bank of India/Punjab National
Bank, Camera Bank and Union Bank of India).
16) In the life insurance service in India, the highest share of the market goes to: (Kotak Life
Insurance/Aditya Birla Sun Life/Life Insurance Corporation of India/ICICI Prudential).
17) In the insurance sector of India, the regulatory authority has been formed on the basis of: (IRDA
Act, 2000/SEBI Act, 1992/Both A and B/None of the above).
18) Which of the following industrial policies did emphasize on ‘disinvestment’ policy in India?
(Industrial Policy Resolution, 1948/Industrial Policy Resolution, 1991/ Industrial Policy
Resolution, 1956/ Industrial Policy Resolution, 1978)
19) ‘Globalization of Indian Economy’ means: (stepping up external borrowings/establishing Indian
business units abroad/having minimum possible restrictions on economic relations with
other countries/giving up programmes of important substitution).
20) Which of the following has not occurred after the liberalization of economic policies under the
New Economic Policies in 1991? (Significant increase in India’s foreign exchange
reserves/Increase in Inflows from foreign direct investment/A massive increase in the share of
agriculture in India’s gross domestic product/Increase in India’s share of exports in world
Trade)
21) Liberalization implies: (greater role of public sector/reduction in governments control over
the private sector/free economy with no controls/none of the above).
22) Which of the following is not an element of fiscal reforms? (Taxation reforms/Public expenditure
reforms/Change in Interest rate/Control on public debt)
23) acts as a Principal Financial Institution for the Promotion, Financing and Development of
the Micro, Small and Medium Enterprise sector. (Mudra Bank/RBI/SBI/SIDBI)
24) As per new definition and criteria will come into effect from 1st July, 2020, the definition of Micro
manufacturing and services units was increased to ₹ of investment and ₹ of
turnover. (10 lacs, 50 lacs/50 lacs, 1 crore/25 lacs, 1 crore/1 crore, 5 crores)
25) A medium enterprise is an enterprise where the investment in Plant and Machinery is more than ₹
crores but does not exceed ₹ 10 crores. (2/4/5/8)
26) As per new definition and criterion will come effect from 1st July, 2020, the limit of small unit was
increased to ₹ of investment and ₹ of turnover. (50 lacs, 1 crore/25 lacs, 1 crore/1
crore, 5 crores/10 crores, 50 crores)
27) The existing criterion of definition of MSMEs is based on the: (MSMED Act, 2006/MSME Act,
2006/MSMED Act, 2005/MSMED Act, 2015)
28) What is the full form of the LQP system that existed before the onset of the New Economic Policy
in 1991? (License, Quota and Permit/License, Quota and Privatization/Liberalization, Quota and
Permit/None of the above)
29) The number of industries reserved for the public sector was reduced from 17 to under the
Industrial Policy of 1991. (4/14/8/10)
30) When were the economic reforms under New Economic Policy formally introduced in India?
(March, 1990/December, 1990/June, 1991/July, 1991)
41
49
31) Who regulates money supply in India? (Government of India/Reserve Bank of India/Commercial
Banks/NITI Ayog)
Unit – VI (C) (Sectoral Trends and Issues: External Sector)
VI (C) Sectoral Trends and
31) Who regulates money supply in India? (Government of India/Reserve Bank of India/Commercial
1) Banks/NITI
Import and export
the above).
Issues
Ayog) of goods are known
UNIT
as: (nominal trade/invisible trade/visible trade/none of
2) Import and export of services are known as: (nominal trade/invisible trade/visible trade/none
Unit – VI (C) (Sectoral Trends and Issues: External Sector)
of the above). External Sector
3) Balance of Payments of a country is a statement that records: (sources of foreign exchange/uses of
1) Import
foreign and export of goods
exchange/both areB/none
A and knownof as:the above). trade/invisible trade/visible trade/none of
(nominal
the above).
4) The categories of transactions that are included in current account of Balance of Payments are:
2) Import
(exportsand andexport
importsof services are known
of goods/exports andas:imports
(nominal services/incometrade/visible
of trade/invisible from and to trade/none
of the above).
abroad/Transfers from and to abroad).
3)
5) Balance of
Balance of Payments
Trade equals:of a (exports
country is a statement
less that records:
imports/exports (sources
of goods of foreignofexchange/uses
less imports goods/exportsof
foreign exchange/both A and B/none of the
of services less imports of services/none of the above). above).
4)
6) The categories
The measurement of transactions
of Balance ofthat are included
Payments deficitiniscurrent
based on:account of Balance of Payments are:
(autonomous
(exports and imports of goods/exports and imports of services/income
transactions/accommodating transactions/current account transactions/capital from and account
to
abroad/Transfers
transactions). from and to abroad).
5)
7) Balance of Trade
refers equals:
to the (exports
difference less of
in value imports/exports
imports and exports of goods less only,
of goods imports of goods/exports
i.e., visible items only.
of services less imports of services/none of the above).
(Balance of payments/Balance of trade/Balance of capital account/Balance of current A/c)
6)
8) The measurement
Services of Balance
like shipping, banking,ofinsurance,
Payments interest,
deficit is gifts,
basedroyalties,
on: (autonomous
subsidies, persons to military
transactions/accommodating transactions/current
and civil personnel etc. are included as: (Invisible items/Visible account transactions/capital
items/Real items/None accountof the
transactions).
these).
7) refers
9) In Balance ofto the difference
Payment, in value
The Capital of imports
Account and exports
transactions dealsof goods
with: only, i.e.,ofvisible
(payment items only.
currently
(Balance of payments/Balance of trade/Balance of capital account/Balance
produced goods and services/interest earned or paid on claims/gifts and donations/payments of current A/c) of
8) Services
debts and like shipping, banking, insurance, interest, gifts, royalties, subsidies, persons to military
claims).
10)The measures takenetc.
and civil personnel are included
to improve as: (Invisible
the negative Balance items/Visible
of Payments items/Real items/None of the
include: (exchange
these).
control/currency devaluation/important substitution/all of the above).
9) In Balance
11)Balance of Payment,
of payments is The
a Capital Account
concept transactions
as compared deals with:
to balance (payment of currently
of trade.
produced goods and services/interest
(Broader/Similar/Narrower/None of the above) earned or paid on claims/gifts and donations/payments of
12)debts
Balanceand claims). is an accounting statement that records monetary transactions between:
of Payments
10)The
(residents of ataken
measures to improve
nation and the the
restnegative Balance of Paymentsand
of the world/non-residents include: (exchange
the rest of the
control/currency
world/residents ofdevaluation/important of theof
substitution/all
a nation and non-residents/none the above).
above).
11)Balance of payments is a concept as compared to balance of trade.
Unit – VII (Social Issues in Indian Economy)
(Broader/Similar/Narrower/None of the above)
12)Balance of Payments is an accounting statement that records monetary transactions between:
(residents of a nation and the rest of the world/non-residents and the rest of the
1) indicates Low Income – Low Demand – Low Investment – Low Productivity – Low Income.
world/residents of a nation and non-residents/none of the above).
(Supply side of vicious circle/Demand side of vicious circle/Vicious circle of market
imperfections/all of the above)
Unit – VII (Social Issues in Indian Economy)
1) indicates Low Income – Low Demand – Low Investment – Low Productivity – Low Income.
(Supply side of vicious circle/Demand side 42
of vicious circle/Vicious circle of market
42
50
9) In Balance of Payment, The Capital Account transactions deals with: (payment of currently
produced goods and services/interest earned or paid on claims/gifts and donations/payments of
debts and claims).
10)The measures taken to improve the negative Balance of Payments include: (exchange
control/currency
Gobind Kumar Jha devaluation/important
9874411552 substitution/all of the above).
11)Balance of payments is a concept as compared to balance of trade.
(Broader/Similar/Narrower/None of the above)
12)Balance of Payments is an accounting statement that records monetary transactions between:
(residents of a nation and the rest of the world/non-residents and the rest of the
VII Social Issues in
world/residents of a nation and non-residents/none of the above).
UnitUNIT Indian
– VII (Social Issues Economy
in Indian Economy)
GOBIND
1)
KUMAR JHA 9874411552
indicates Low Income – Low Demand – Low Investment – Low Productivity – Low Income.
2) refers to a situation of employment with surplus manpower in which some workers have
zero marginal productivity. (Open Unemployment/Disguised Unemployment/Seasonal
Unemployment/Cyclical Unemployment)
3) Which of the following types of unemployment 42 is normally found in rural India? (Open
Unemployment/Disguised Unemployment/Seasonal Unemployment/Both B and C)
4) is unemployment that occurs during certain seasons of the year. In some industries and
occupations like agriculture, holiday resorts, ice factories, etc., production activities take place
only in some seasons. (Open Unemployment/Disguised Unemployment/Seasonal
5) Indian official definition of poverty goes in terms of: (calorie intake/basic amenities such as food,
floor space per person, medical care/relative income/minimum needs of food consumption).
6) Indian official definition of poverty goes in terms of calorie intake. It is measured by expenditure
required for a daily calorie intake of per person in rural areas and in urban areas.
(2400, 2100/2100, 2400/3400, 3100/4400, 4100)
7) is measured by the percentage of people living below the poverty line or by the head count
ratio. (Absolute poverty/Relative poverty/Income poverty/Poverty gap)
8) refers to income inequality. (Absolute poverty/Relative poverty/Income poverty/Poverty
gap)
9) In India, the head count ratio regarding poverty estimation shows: (number of people above the
poverty line/number of people below the poverty line/number of people on the poverty
line/number of people below poverty line as a percentage of total population in any
region).
10) indicates that in underdeveloped countries, productivity is so low that it is not enough for
capital formation. (Supply side of vicious circle/Demand side of vicious circle/Vicious circle of
market imperfections/All of the above)
11)On the basis of production norm, the concept of disguised unemployment would imply: (a zero
marginal product of labour/a positive marginal marginal product of labour/a negative marginal
product of labour/a low average product of labour).
12)When a large number of workers get unemployed due to automation of industrial processes, this
phenomenon is called: (cyclical unemployment/disguised unemployment/structural
unemployment/seasonal unemployment).
13)The meaning of disguised unemployment is: (zero marginal productivity of labour/zero total
productivity of labour/zero average productivity of labour/none of the above).
14)The Keynesian remedy for unemployment is to: (decrease aggregate demand/reduce tax rates or
lower interest rates/increase government spending/decrease private consumption and
investment).
15)Under NREGA, 2005, all those who are able to and are in need of work are guaranteed of
employment in a year by the government. (180 days/50 days/200 days/100 days)
16) indicates Low Income – Low Saving – Low Investment – Low Production – Low Income.
51
imperfections/All of the above)
17) is caused by trade cycles at regular intervals. Generally capitalist economies are subject to
trade cycles. The down swing in business activities results in unemployment. It is normally a short
phenomenon is called: (cyclical unemployment/disguised unemployment/structural
unemployment/seasonal unemployment).
13)The meaning of disguised unemployment is: (zero marginal productivity of labour/zero total
productivity of labour/zero average productivity of labour/none of the above).
14)The Keynesian remedy for unemployment is to: (decrease aggregate demand/reduce tax rates or
lower interest rates/increase government spending/decrease private consumption and
investment).
15)Under NREGA, 2005, all those who are able to and are in need of work are guaranteed of
employment in a year by the government. (180 days/50 days/200 days/100 days)
16) indicates Low Income – Low Saving – Low Investment – Low Production – Low Income.
imperfections/All of the above)
GOBIND
17)
KUMAR JHA 9874411552
is caused by trade cycles at regular intervals. Generally capitalist economies are subject to
trade cycles. The down swing in business activities results in unemployment. It is normally a short
run phenomenon. (Open Unemployment/Disguised Unemployment/Seasonal
43
18) is a natural outcome of economic development and technological advancement and
innovation that are taking place rapidly all over the world in every sphere. (Structural
Unemployment/Frictional Unemployment/Chronic Unemployment/Disguised Unemployment)
19)Huge pressure of population in the rural areas of India causes: (Cyclical Unemployment/Frictional
Unemployment/Disguised Unemployment/Seasonal Unemployment).
20)One of the most important rural employment generation schemes of the government of India is:
(NREP/MGNREGA/IRDP/TRYSEM).
CU Exam, 2019
Group – A (1 X 20)
Answer all the questions
1. Which of the following is not the feature of monopolistic competition? (Product

differentiation/Possibility of free entry and exit/Homogeneous product/Presence of selling
cost)
2. In oligopoly market, the shape of the demand curve of a firm is:
(downward/horizontal/vertical/indeterminate).
3. In oligopoly, Sweezy model the more will be the difference between price elasticity of
demand for two parts of the demand curve. (The more will be the discontinuity of MR
curve/the less will be the discontinuity of MR curve/there will be no impact on discontinuity of
MR curve/the discontinuous portion of the MR curve will disappear)
4. In perfectly competitive market, in the product market with single variable factor, the firm’s
demand curve for the factor is given by its: (value of marginal product curve/marginal physical
productivity curve/marginal fixed cost curve/average fixed cost curve).
5. The percentage of work force engaged in primary sector in 2016-17 was: (15-25%;25-35%;35-
45%;45-55%).
6. In Indian economy, Sectoral distribution of national income shoes: (increase in contribution of
primary sector in NI/decrease in contribution of primary sector in NI and increase in
contribution of secondary and tertiary sector/increase in contribution of primary sector in NI
and decrease in contribution of secondary and tertiary sector/increase in contribution of primary,
secondary and tertiary sector).
7. In the national income in India in 2016-17, the contribution of primary sector is: (15-25%;less
than 10%;25-30%;50-60%).
8. Which of the following id not the cause of low productivity in Indian agriculture? (Use of
backward technology/High population pressure/Lack of irrigational facilities/Better banking
facilities)
9. In monopoly market, the firm is: (price taker/price maker/cost determinant/price and quantity
determinant).
52
44
run phenomenon. (Open Unemployment/Disguised Unemployment/Seasonal
18) is a natural
Gobind Kumar Jha outcome of economic development and technological advancement and
9874411552
innovation that are taking place rapidly all over the world in every sphere. (Structural
Unemployment/Frictional Unemployment/Chronic Unemployment/Disguised Unemployment)
19)Huge pressure of population in the rural areas of India causes: (Cyclical Unemployment/Frictional
Unemployment/Disguised Unemployment/Seasonal Unemployment).
A (1 X20)
20)One of the most important rural employment generation schemes of the government of India is:
(NREP/MGNREGA/IRDP/TRYSEM).
CU Exam, 2019
GROUP CU Exam,
Answer all the2019
questions
?? Group – A (1 X 20)
Answer all the questions
1. Which of the following is not the feature of monopolistic competition? (Product

differentiation/Possibility of free entry and exit/Homogeneous product/Presence of selling
cost)
2. In oligopoly market, the shape of the demand curve of a firm is:
(downward/horizontal/vertical/indeterminate).
3. In oligopoly, Sweezy model the more will be the difference between price elasticity of
demand for two parts of the demand curve. (The more will be the discontinuity of MR
curve/the less will be the discontinuity of MR curve/there will be no impact on discontinuity of
MR curve/the discontinuous portion of the MR curve will disappear)
4. In perfectly competitive market, in the product market with single variable factor, the firm’s
demand curve for the factor is given by its: (value of marginal product curve/marginal physical
productivity curve/marginal fixed cost curve/average fixed cost curve).
5. The percentage of work force engaged in primary sector in 2016-17 was: (15-25%;25-35%;35-
45%;45-55%).
6. In Indian economy, Sectoral distribution of national income shoes: (increase in contribution of
primary sector in NI/decrease in contribution of primary sector in NI and increase in
contribution of secondary and tertiary sector/increase in contribution of primary sector in NI
and decrease in contribution of secondary and tertiary sector/increase in contribution of primary,
secondary and tertiary sector).
7. In the national income in India in 2016-17, the contribution of primary sector is: (15-25%;less
than 10%;25-30%;50-60%).
8. Which of the following id not the cause of low productivity in Indian agriculture? (Use of
backward technology/High population pressure/Lack of irrigational facilities/Better banking
facilities)
9. In monopoly market, the firm is: (price taker/price maker/cost determinant/price and quantity
determinant).
44
53
10. In monopoly, if price elasticity of demand is relatively inelastic then:

(MR>0/MR=0/MR=P/MR<0).
11. In equilibrium of a monopoly firm in the long run: (there may be normal profit and may be
super normal profit/there will be normal profit only/there will be loss only/there will be only
super normal profit).
12. Social cost of monopoly arises because in this market: (P>MC/P<MC/P=MC/P=AC).
13. Among the following which is not the basic objective behind disinvestment in India? (To reduce
the economic burden on government/To develop the public fund/To create the competition in the
market/To fulfil the social responsibility)
14. Which of the following is not the corrective measure to remove the deficit in BOP? (Increase the
quantity of exports/Increase the quantity of imports/To control foreign exchange/Devaluation)
15. In case of disguised unemployment, the marginal product of labour is:
(positive/zero/infinity/one).
16. The modern theory, economic rent is: (Inversely related to elasticity of supply of factor of
production/Positively related to elasticity of supply of factor of production/Unrelated to
elasticity of supply of factor of production/Inversely related to elasticity of demand of factor of
production).
17. For measurement of poverty line in India, the minimum average calorie intake is:
(2000/2500/2250/2400).
18. Net profit is equal to: (Gross profit – Explicit cost/Gross profit – Implicit cost/Gross profit +
Explicit cost/Gross profit + Implicit cost).
19. Per capita income is: (national income ÷ population/GDP ÷ Population/Population ÷
GDP/National Income ÷ GDP).
20. National Income means: (net domestic product at factor cost/net national product at market
price/net national product at factor cost/net domestic product at market price).
Group – B (2 X 30)
21. In which year in India, 14 commercial banks were nationalises? (1965/1991/1969/1979)

22. In which of the following is the largest poverty alleviation programme in India?
(NREGP/TRYSEM/MGNREGS/NREP)
23. In which programme 10 million poorest families are being given 25 kg food grains per month at a
very low price? (NREGP/TRYSEM/Antyodaya Anna Yojana/NREGS)
24. At present the percentage of people lies below the poverty line in India is: (20-25%;25-35%;35-
45%;45-50%).
25. The seasonal unemployment is mainly observed in: (agricultural sector/Industrial
sector/service sector/trade sector).
26. The equilibrium condition of a discriminating monopoly firm in case of two markets: (e1=e2, MR1
= MR2/e1>e2, MR1<MR2/e1<e2, MR1>MR2/None of these).
27. In monopoly market, the supply curve: (is upward rising/is downward sloping/is horizontal/does
not exist).
28. The Lerner's index of monopoly power is: (P-MC/P;P-MC/P-AC/P;P-AC/P).
45
54
29. If the demand curve has a kink, what will be the shape of the MR curve in Sweezy's model? (MR
curve will be horizontal/MR curve will be vertical/MR curve will be discontinuous/MR curve
will be positively sloped)
30. In monopolistic competition, the existence of excess production capacity arises because in the
long run firm produces at: (the rising part of LAC/the minimum point of LAC/falling part of
LAC/the minimum point of LMC).
31. The difference between GNP and GDP is: (net foreign earnings/net imports/NNP fc/per capita
income).
32. Which of the following is considered as the index of development? (Per capita
income/poverty/GDP mp/NNP mp)
33. What is the contribution of tertiary sector in the national income in India in recent times? (Below
10%;15-30%;25-30%;50-60%)
34. Which sector of India has shown the tremendous growth in the 1st decade of 21st century?
(Manufacturing sector/Agricultural sector/Information and communication technology
sector/Other sectors)
35. The activity of banking and insurance is included in: (primary sector/secondary sector/tertiary
sector/other sectors).
36. ‘Operation Barga' a land reforms initiated by the Government of West Bengal initiated in: (1977/
1967/1985/1991).
37. Which among these institutions is regarded as apex rural financial institution? (Land
Development Bank/Regional Rural Bank/Co-operative Credit Services/National Bank for
Agriculture and Rural Development)
38. An enterprise is a micro enterprise if: (its services do not exceed ₹ 10 lakhs, production do not
exceed ₹ 25 lakhs/it’s services do not exceed ₹ 25 lakhs, production do not exceed ₹ 10 lakhs/its
services do not exceed ₹ 12 lakhs, production do not exceed ₹ 15 lakhs/its services do not exceed
₹15 lakhs, production do not exceed₹ 12 lakhs).
39. In the last few decades throughout the world, the market for FDI was directed towards:
(agricultural sector/production sector/service sector/mining sector).
40. Which of these sources is not an institutional source of rural credit? (Co-operative credit
societies/NABARD/RRB/Rural money lenders)
41. One important example of Cartel is: (OCED/OPEC/Indian Railways/IMF).
42. If the monopolist faces a linear demand curve, its slope will be: (same as the slope of MR
curve/double of the slope of MR curve/half of the slope of MR curve/one third of the slope of
MR curve).
43. In Sweezy’s kink demand curve model, price is: (variable/rigid/less than MC/greater than AC).
44. A monopolistic competitive firm in the long run equilibrium earns: (super normal profit/normal
profit/negative profit/either super normal profit or negative profit).
45. If the nominal rate of interest is 12% and the rate of inflation is 8%, what is the real rate of
interest? (4%;12%;10%;8%) [Real Rate of Interest = Nominal Rate of Interest – Expected Rate of
Inflation]
46. If leisure is preferable to wage income, then the individual labour supply curve will be: (positively
sloped/vertical/backward bending/horizontal).
47. Quasi rent is equal to: (TR-TC/TR-TVC/TR-MC/TR-AC).
46
55
GOBIND
GOBIND KUMAR
KUMAR JHA
JHA 9874411552
9874411552
48.
48. When
When aa firm
firm employs
employs two
two units
units of
of labour
labour as
as aa variable
variable factor
factor then
then total
total production
production is
is 50
50 units.
units. The
The
total production becomes 65 units for three units of labour. What is the marginal physical
total production becomes 65 units for three units of labour. What is the marginal physical product product
for
for third
third unit
unit of
of labour?
labour? (10/15/30/25)
(10/15/30/25)
49. If VMP>MRP>W, then: (there is
49. If VMP>MRP>W, then: (there is monopolistic
monopolistic exploitation/there
exploitation/there is is monopsonistic
monopsonistic
exploitation/both
exploitation/both monopolistic
monopolistic and
and monopsonistic
monopsonistic exploitation/oligopolistic
exploitation/oligopolistic exploitation).
exploitation).
50.
50. Rent is high because corn is high according to which theory? (Modern theory of rent/Ricardian
Rent is high because corn is high according to which theory? (Modern theory of rent/Ricardian
theory
theory ofof rent/Marshallian
rent/Marshallian theory/Pigou
theory/Pigou theory)
theory)
A (2 x 5) CU
CU Exam,2021
CU Exam,
2021
Exam, 2021
GROUP Module
Module
Module –– II
–I
Group –– A (2
(2 xx 5)
??
Answer any
Group Afive questions
5)
Answer any five questions
1.
1. AA firm
firm under
under monopoly
monopoly market
market situation
situation in in short
short run
run equilibrium
equilibrium can can have:
have: (normal
(normal
profit/supernormal profits/loss/All of
profit/supernormal profits/loss/All of the above). the above).
2.
2. Power
Power of of monopoly
monopoly becomes
becomes zero zero when:
when: (P<MC/P>MC/MR=P/P=MC).
(P<MC/P>MC/MR=P/P=MC).
3.
3. Individual labour supply curve is backward bending
Individual labour supply curve is backward bending when: (Income effect
when: (Income effect > > Substitution
Substitution
effect/Income
effect/Income effect
effect == Substitution
Substitution effect/Income
effect << Substitution
Substitution effect/Income
effect is
is
zero).
zero).
4.
4. Which
Which of of the
the following
following is is not
not aa feature
feature of of aa monopoly
monopoly market?
market? (Single
(Single seller/No
seller/No deadweight
deadweight
loss/Differentiated product/No unique
loss/Differentiated product/No unique supply curve) supply curve)
5.
5. In
In an
an oligopoly
oligopoly market
market ifif every
every seller
seller sells
sells homogenous
homogenous goodsgoods then
then it it is
is called:
called: (Collusive
(Collusive
oligopoly/Non collusive oligopoly/Pure oligopoly/Differentiated
oligopoly/Non collusive oligopoly/Pure oligopoly/Differentiated oligopoly). oligopoly).
6.
6. The
The range
range of
of discontinuity
discontinuity of of MR
MR curve
curve in in kinked
kinked demand
demand curvecurve model
model depends
depends on:
on: (difference
(difference
between AC and MC/difference between AR and MR/difference between elasticities of
between AC and MC/difference between AR and MR/difference between elasticities of two
two
portions of demand curve/none
portions of demand curve/none of the above).of the above).
7.
7. Quasi
Quasi rent
rent implies:
implies: (TR
(TR –– TFC/Profit
TFC/Profit ++ TFC/TR TC/TR –– TVC).
TFC/TR –– TC/TR TVC).
8.
8. If product market is monopolistic and factor market is
If product market is monopolistic and factor market is competitive
competitive then:
then: (VMP=MRP/VMP>MRP/
(VMP=MRP/VMP>MRP/
VMP<MRP/VMP=0).
VMP<MRP/VMP=0).
9.
9. Which
Which of of the
the following
following types
types ofof profit
profit isis considered
considered toto be
be aa part
part of
of the
the cost
cost of
of production?
production?
(Supernormal profit/Normal profit/Monopoly profit/Oligopoly
(Supernormal profit/Normal profit/Monopoly profit/Oligopoly profit) profit)
10.
10. For aa firm
For firm in
in monopolistic
monopolistic competition:
competition: (perceived
(perceived demand
demand curvecurve isis the
the real
real demand
demand
curve/proportional
curve/proportional demanddemand curvecurve is is constructed
constructed on on the
the basis
basis of perception/perceived demand
of perception/perceived demand
curve is much more elastic than the proportional demand curve/perceived
curve is much more elastic than the proportional demand curve/perceived demand curve demand curve is
is
much
much more
more inelastic
inelastic than
than the
the proportional
proportional demand demand curve).
curve).
47
47
56
B (3 X 10)
GOBIND KUMAR JHA
Answer any five 9874411552
GROUP questions
?? Group – B (3 X 10)
Answer any ten questions
11. The equilibrium of a firm in a monopoly market takes place in: (inelastic portion of the demand
curve/elastic portion of the demand curve/unitary elastic portion of the demand curve/none of
the above).
12. If in monopoly market, AR is 50 and MR is 25, then the absolute value of elasticity of demand:
(1/2/ͳȀ0).
ʹ
13. If the price elasticity of demand in the monopoly market is 3/2, the degree of monopoly power is
ͳ
equal to: (͵Ǣ𝟐𝟐 Ǣ Ǣ − ͵ሻǤ
ʹ 𝟑𝟑
͵ ʹ
14. In oligopoly market, we find different models because of: (non existence of AR
curve/Indeterminacy in the equilibrium/Difference in the reaction of the rivals/Existence of
the selling cost).
15. If the supply of a factor is perfectly inelastic, then economic rent is: (equal to actual
earning/equal to transfer earning/zero/negative).
16. Which of the following is an example of ‘Cartel'? (IMF/OECD/OPEC/UNO)
17. Net profit is determined from the gross profit by subtracting: (own labour and the opportunity
cost of supply of capital/price of raw materials/cost of wages/cost of risk bearing).
18. Natural monopoly arises when: (there is free entry and exit of firms in an industry/a firm has a
monopoly in natural resources/the firm enjoys economies of scale/none of the above).
19. In monopolistic competition the long run equilibrium takes place in the: (rising part of LAC
curve/falling part of LAC curve/minimum point of LAC curve/none of the above).
20. Consider the following table:
Unit of Price per Total Profit MPP VMP
Factor Factor (₹) (₹)
1 50 120 120 6,000
2 50 220 ? 11,000
3 50 300 80 ?
What is the MPP for the 2 unit and VMP for the 3 unit respectively? (100, 4000/100, 24000/
nd rd
220,4000/120, 5000)
21. If the nominal rate of interest is 12% and the rate of inflation is 10.2%. What will be the real rate
of interest? (22.2%;1.8%;12%;10.2%)
22. If for a monopoly firm, P = ₹10, MR = ₹5 for any particular level of output and if MPP = 20 what
will be the difference between the value of VMP and MRP? (₹100/₹200/₹300/₹400)
23. In monopoly market, with downward sloping straight line demand curve: (slope of the AR curve is
1/3rd of slope of MR curve/slope of the MR curve is ½ of the slope of the AR curve/slope of the
AR curve is ½ of the slope of the MR curve/slope of the MR curve is ½ of the slope of the TR
curve).
24. Which of the following is the profitability conditions of price discrimination? (e1>e2, MR1=MR2/
e1=e2, MR1>MR2/e1 not equal to e2, MR1=MR2/e1=e2, MR1=MR2)
25. ‘Rent is a differential surplus' – this statement is associated with: (Modern theory of
rent/Ricardian theory of rent/Keynesian theory of rent/Neo-Keynesian theory of rent).
48
57
A (2
GOBIND x 5) JHA
KUMAR 9874411552
GROUP Module
Module – II – II
?
?
Group – A (2 X 5)
26. If we subtract depreciation of capital from the Gross National Product at Factor Cost, we get: (net
national product at market price/net national product at Factor cost/real national
product/nominal national product).
27. Which along the following id not considered when the national income is estimated? (The profit of
joint stock companies/The market price of the factors used in the production which is owned by
the entrepreneur/Income of the self employed people/Transfer earning)
28. If Gross Domestic Product is subtract from Gross National Product then we will get: (net Factor
earning of the National factors of production from the external countries/depreciation
cost/net indirect tax/operational surplus).
29. The growth of service sector in Indian economy is: (the sign of development/not the sign of
development/may not be the sign of development/may be the sign of development).
30. As a result of green revolution in Indian agriculture: (regional disparity in agricultural production
is observed/inequality of the distribution of income among the farmers is resulted/disparity
among the pattern of the food crops production is seen/all of the above).
31. Which of the following is the part of the institutional reforms in Indian agriculture? (Use of high
yielding variety of seeds/Cultivation with improved technology/Abolition of zamindary
system/Application of chemical fertilizers)
32. Which type of the following industries were emphasized in India during the second Five Year Plan
(1956-61) ? (rural small scale industries/heavy iron and steel industries/textile industries/jute
industries)
33. What percentage of India’s population lives under poverty line? (40%;35%;15%;20%)
34. The new economic reforms took place in: (1985/1991/2001/2008).
35. By the recommendations of which committee under the guidance of Ministry of Finance of the
Government of India in the year 1999 the Insurance Regulatory and Development Authority was
established for the purpose of regulating the insurance system of the country? (Narasimham
Committee/Malhotra Committee/Raja Chrllian Committee/Rangarajan Committee)
Group – B (3 X 10)
36. Gross Domestic Product at Factor Cost can be derived from the GDP at MP by the following
method: (GDP fc = GDP mp – Subsidies + Indirect tax/GDP fc = GDP mp – Indirect tax +
Subsidies/GDP fc = GDP mp + NFIA/GDP fc = GDP mp + Consumption of fixed capital).
37. The relationship between NNP and NDP is: (NNP = NDP – Depreciation/NNP = NDP +
Depreciation/NNP = NDP + NFIA/NNP = NDP – NFIA).
38. If in a country for a particular year the nominal gross domestic product is ₹ 50,000 and the real
gross domestic product is ₹ 40,000, then the GDP deflator will be: (80/125/90, 000/10,000).
49
58
is observed/inequality of the distribution of income among the farmers is resulted/disparity
among the pattern of the food crops production is seen/all of the above).
31. Which of the following is the part of the institutional reforms in Indian agriculture? (Use of high
yielding variety of seeds/Cultivation with improved technology/Abolition of zamindary
system/Application
Gobind Kumar Jha of chemical fertilizers)
9874411552
32. Which type of the following industries were emphasized in India during the second Five Year Plan
(1956-61) ? (rural small scale industries/heavy iron and steel industries/textile industries/jute
industries)
33. What percentage of India’s population lives under poverty line? (40%;35%;15%;20%)
B (3 X 10)
Answer any five
34. The new economic reforms took place in: (1985/1991/2001/2008).
35. By the recommendations of which committee under the guidance of Ministry of Finance of the
Government of India in the year 1999 the Insurance Regulatory and Development Authority was
GROUP questions
established for the purpose of regulating the insurance system of the country? (Narasimham
??
Committee/Malhotra Committee/Raja Chrllian Committee/Rangarajan Committee)
Group – B (3 X 10)
36. Gross Domestic Product at Factor Cost can be derived from the GDP at MP by the following
method: (GDP fc = GDP mp – Subsidies + Indirect tax/GDP fc = GDP mp – Indirect tax +
Subsidies/GDP fc = GDP mp + NFIA/GDP fc = GDP mp + Consumption of fixed capital).
37. The relationship between NNP and NDP is: (NNP = NDP – Depreciation/NNP = NDP +
Depreciation/NNP = NDP + NFIA/NNP = NDP – NFIA).
38. If in a country for a particular year the nominal gross domestic product is ₹ 50,000 and the real
gross domestic product is ₹ 40,000, then the GDP deflator will be: (80/125/90, 000/10,000).
49
59
39. Which of the following is the sign of structural weakness of Indian economy? (The spread of
service sector before the full development of the secondary sector/The decline of the
importance of the primary sector in the occupational structure/Only the public sector
enterprises fall in secondary sector/Failure of the implementation of the modern technologies in
the service sector)
40. Which of these economists said that one of the signs of development is the declining contribution
of the primary sector? (Clark & Fisher/Marshall/Samuelson/Schumpeter)
41. The partial selling of the ownership of public sector unit to private entrepreneur is called:
(employment creation/disinvestment of public sector unit/disinvestment of individual
enterprise/disinvestment of private sector enterprise).
42. Which of the following does not fall in the recent trend or development of the Indian banking
system? (Merger, incorporation, take over/Social banking/Squeezing of private
banks/Extension of bank credits in priority sectors)
43. According to MSMED Act, 2006 those producing units in India in which capital investment for
machines and machineries is less than ₹ 25 lakhs are designated as: (micro enterprise/medium
enterprise/big enterprise/small enterprise).
44. Which of the following character does not fall into the characters of new industrial policy of
Government of India 1991? (Introduction of licensing system in industry/Reduction of the
sphere and role of the public sector units/Abolition of the upper limit to control monopoly and
restricted trade/Free entry of foreign capital and foreign technology)
45. The type of unemployment that has increased in number in the capitalist system of Indian
economy in this era of globalization is: (disguised unemployment/frictional
unemployment/cyclical unemployment/seasonal unemployment).
46. The insufficient development of irrigational system in Indian agriculture creates: (frictional
unemployment/seasonal unemployment/disguised unemployment/cyclical unemployment).
47. Which of the following is the reason behind the inequality of income distribution in India? (Private
ownership of the poverty/Unemployment and semi unemployment/Inflation/All of these)
48. Which of these is not a condition for adverse BOP situation? (Capital account deficit/Capital
account surplus/Fall in the export earning/Sharp rise in import bill)
49. In the era of post economic reforms in India for the balance of trade in external trade: (deficit has
increased gradually/surplus has increased gradually/the amount of deficit has become
static/the amount of surplus has become static).
50. The type of unemployment that has been estimated on the basis of current and daily status by
National Sample Survey Organization (NSSO) indicates: (seasonal and disguised
unemployment/open unemployment/unemployment in unorganized sector/frictional
unemployment).
50
60
A (1KUMAR
GOBIND X 20) JHA 9874411552
Answer the following
GROUP CUquestions
Exam, 2022
?
? Group – A (1 X 20)
Answer the following questions
1. Which of the following is not a part of the land reform policy in India? (Tenancy
reforms/Imposition of land ceiling/Regulation of rent/Imposition of agricultural tax)
2. Narasimham Committee appointed by Government of India is mainly related to: (Financial Sector
Reforms/Tax Reforms/External Sector Reforms/Primary Sector Reforms).
3. For an individual’s labour supply curve, if substitution effect is weaker than income effect for a
rise in wage rate, then the labour supply will: (rise/fall/remain the same/zero).
4. In monopoly market at equilibrium price is: (equal to MC/greater than MC/less than MC/less
than MR).
5. The Swarna Jayanti Sahari Rozgar Yojana (SJSRY) scheme was launched in:
(1997/1999/2001/2003).
6. The short run equilibrium under monopoly occurs at: (rising portion of MC only/falling portion
of MC only/horizontal portion of MC only/rising portion of AC).
7. How many commercial banks were initially nationalized in India in 1969? (20/28/14/6)
8. Trade, Hotel and Restaurants are included in: (primary sector/secondary sector/tertiary
sector/none of these).
9. In monopoly market, which of the following is true? (There is only one seller/There is barrier to
entry of new firms in the market/Both AR and MR curves are downward and MR curve lies below
the AR curve/All of these)
10. The Ricardian Rent Theory assumes that: (the supply of land is given/land has alternative
uses/rent does not determine the crop price/both A and C).
11. What percentage of India’s population lives under international poverty line?
(40%;30%;25%;20%)
12. According to Kinked Demand Curve Model, a firm will assume that rival firm will: (keep the rates
of production constant/keep their cost constant/match price cuts but not price increase/match
price increase but not price cut).
13. If the Gross National Product is ₹ 750 crores and the depreciation is ₹ 75 crores, the Net National
Product will be: (₹ 825 crores/₹ 675 crores/₹ 10 crores/₹ 56,250 crores).
14. A profit maximizing firm hires labour up to the point, where: (price equals wage rate/price equals
quantity of labour/the wage times the quantity of labour equals the marginal productivity/wage
equals the Value Marginal Product).
15. In oligopoly market, Cartel is a form of: (pure oligopoly/differentiated oligopoly/collusive
oligopoly/non collusive oligopoly).
16. The NITI Ayog stands for: (National Institution of Transforming India/National Integrated
Tribal Initiative/National Institute of Technical Initiative/National Industrial and Technological
Institute).
51
61
17. Which of the following is not a feature of monopolistic competition? (Existence of selling
cost/Excess capacity in the long run/Presence of perceived and proportional demand curve/Long
run equilibrium occurs at the minimum point of LAC curve)
18. When the unemployment arises due to the people’s inclination to work at a higher wage rate, it is
known as: (seasonal unemployment/structural unemployment/voluntary
unemployment/frictional unemployment).
19. In monopoly market, if demand is inelastic, its MR will be: (positive/zero/negative/none of
these).
20. Which of the following is not a feature of less developed nations? (High rate of population
growth/Excessive dependence on agriculture/Huge technological development/Mass poverty
and unemployment)
Group – B (2 X 30)
1. Which of the following us correct? (Net profit = Total profit – Cost of factors supplied by the
entrepreneur/Net profit = Total revenue – Total cost – Entrepreneur’s implicit cost/Both A and
B)
Units of factor Daily Wage Rate (₹) TFC AFC MFC
1 400 400 400 400
2 400 800 ? 400
3 400 ? 400 ?
What is the TFC, AFC and MFC for 3 unit, 2 unit and 3 unit respectively? (1200, 400,400/
rd nd rd
400,800,1200/800, 400,1200/1200, 800,400)

3. In oligopoly market, the Kinked Demand Curve Model is used to define: (the equilibrium
price/equilibrium quantity/price rigidity/equilibrium cost).
4. The full form of NABARD is and it was established in the year: (National Bank for Agricultural
Research and Development, 1985/National Bank for Agricultural and Rural Development,
1982/National Bank for Assigning Rural Density, 1982/National Bureau of Agricultural Research
and Development, 1985).
5. If the equation of a demand curve in the monopoly market is given by P=10-4Q, then what will be
the shape of the marginal revenue curve? (-2/-8/8/2.5)
6. Which one is true for a long run equilibrium of a firm under monopolistic competition?
(P=LAC>LMC=MR, LAC is not minimum and LMC is rising/P=LAC>LMC=MR, LAC is minimum
and LMC id rising/P=LAC<LMC=MR, LAC is minimum and LMC is rising/P=LAC<LMC=MR, LAC is
not minimum and LMC is falling)
7. The higher the elasticities of demand of the two portions of the demand curve in the ‘Kinked
Demand' curve model, (lower will be the range of discontinuity of MR curve/higher will be the
range of discontinuity of MR curve/higher will be the range of discontinuity of AR curve/lower
will be the range of discontinuity of AR curve).
52
62
17. Which of the following is not a feature of monopolistic competition? (Existence of selling
Gobind Kumar Jha capacity
cost/Excess 9874411552
in the long run/Presence of perceived and proportional demand curve/Long
run equilibrium occurs at the minimum point of LAC curve)
18. When the unemployment arises due to the people’s inclination to work at a higher wage rate, it is
known as: (seasonal unemployment/structural unemployment/voluntary
unemployment/frictional unemployment).
B (3 X 10)
19. In monopoly market, if demand is inelastic, its MR will be: (positive/zero/negative/none of
these).
GROUP Answer any five questions
20. Which of the following is not a feature of less developed nations? (High rate of population
growth/Excessive dependence on agriculture/Huge technological development/Mass poverty
?
and unemployment)
?
Group – B (2 X 30)
1. Which of the following us correct? (Net profit = Total profit – Cost of factors supplied by the
entrepreneur/Net profit = Total revenue – Total cost – Entrepreneur’s implicit cost/Both A and
B)
Units of factor Daily Wage Rate (₹) TFC AFC MFC
1 400 400 400 400
2 400 800 ? 400
3 400 ? 400 ?
What is the TFC, AFC and MFC for 3rd unit, 2nd unit and 3rd unit respectively? (1200, 400,400/
400,800,1200/800, 400,1200/1200, 800,400)
3. In oligopoly market, the Kinked Demand Curve Model is used to define: (the equilibrium
price/equilibrium quantity/price rigidity/equilibrium cost).
4. The full form of NABARD is and it was established in the year: (National Bank for Agricultural
Research and Development, 1985/National Bank for Agricultural and Rural Development,
1982/National Bank for Assigning Rural Density, 1982/National Bureau of Agricultural Research
and Development, 1985).
5. If the equation of a demand curve in the monopoly market is given by P=10-4Q, then what will be
the shape of the marginal revenue curve? (-2/-8/8/2.5)
6. Which one is true for a long run equilibrium of a firm under monopolistic competition?
(P=LAC>LMC=MR, LAC is not minimum and LMC is rising/P=LAC>LMC=MR, LAC is minimum
and LMC id rising/P=LAC<LMC=MR, LAC is minimum and LMC is rising/P=LAC<LMC=MR, LAC is
not minimum and LMC is falling)
7. The higher the elasticities of demand of the two portions of the demand curve in the ‘Kinked
Demand' curve model, (lower will be the range of discontinuity of MR curve/higher will be the
range of discontinuity of MR curve/higher will be the range of discontinuity of AR curve/lower
will be the range of discontinuity of AR curve).
52
63
8. If NNP at market price = 600 crores, indirect tax = 100 crores, subsidy = 50 crores, what is the
value of national income? (759 crores/550 crores/650 crores/700 crores)
9. HDI stands for: (Health Development Initiative/Human Development Index/Hindustan
Development Institute/Hindustan Defense Institute).
10. Green revolution in India occurred in the: (mid sixties/mid fifties/mid forties/mid eighties).
11. IRDA stands for: (Insurance Regulatory Development Authority/Integrated Rural
Development Association/Insurance Regulation and Development Association/Insurance
Research and Development Agency).
12. The GDP deflator means: (Nominal GDP + Real GDP/Nominal GDP – Real GDP/Nominal GDP * Real
GDP/Nominal GDP ÷ Real GDP).
13. For a monopoly firm, P = ₹20, MR = ₹10 for any particular level of output and of MPP = 10, then:
(VMP = 200, MRP = 100/VMP = 200, MRP = 200/VMP = 100, MRP = 200/VMP = 100, MRP = 100).
14. Which of these information about primary sector in India is not true? (Majority of the population
of India is engaged in the primary sector/The contribution of the primary sector to the national
income is continuously falling/Primary sector includes transport and
communication/Primary sector uses primitive method of technology)
15. Which of these are nit an effect of Green Revolution? (Unchanged crop pattern/Regional
disparity/Self sufficiency in production/Application of modern techniques)
16. Social cost of monopoly market is measured in terms of: (a loss in sales revenue/a loss in
consumer’s surplus/a loss in producer’s surplus/a loss in consumer’s surplus and producer’s
surplus in relation to competitive market).
17. If the supply of the factor is perfectly elastic, then: (Economic rent = 0/Economic rent = Transfer
earning/Economic rent = Actual earning/None of these).
18. Which of the following is not a condition for price discrimination? (No reselling/Existence of
different sub markets/Government regulation or intervention/Distance and entry restriction)
19. NREGA was passed in: (2000/2005/2010/2015).
20. The most popular index of economic development is: (HDI/PQLI/Per capita real NI/GDI).
21. The National Programme of Nutritional support to Primary Education is commonly known as:
(Mid day Meal Scheme/Antodaya Anna Yojana/Food for Work Scheme/Public Distribution
Scheme).
22. Which of the following is not true for real interest rate? (It is the inflation adjusted interest rate/It
is lower than nominal interest rate if inflation rate is positive/Inflation has a negligible impact
on it/It can be negative)
23. If MR = 0 for all levels of output, TR curve will be: (inverted U/straight line passing through the
origin/parallel to the horizontal axis/rectangular hyperbola).
24. If the price elasticity of demand = 2, price = ₹5, the value of marginal revenue: (10/2.5/7.5/0).
25. Poverty line refers to the: (a demarcation line that separates the poverty affected areas from other
areas on the map/minimum amount of calorie required by an adult person per day/minimum
level of income required by a person to meet the basic necessities for a living/percentage of
poor people in the population of a country).
26. Which of the following is the features of oligopoly market? (Few sellers and many buyers/Barriers
to entry of new firms/Indeterminate demand curve/All of these)
53
64
27. The sun total of the money values of goods and services produced within the geographical
boundary of the nation in a given fiscal year is known as: (National income/Per capita
income/GNP/GDP).
28. Which of the following is not a private sector company? (TATA Steel/Indian Railways/Reliance
Jio/Ambuja Cement)
29. In a mixed economy we observe: (a Socialistic structure/a capitalistic structure/coexistence of
capitalistic and socialistic structure/none of these).
30. Point out the wrong statement. (Monopolistic competition is a mixture of monopoly and perfect
competition/Duopoly market is a market of two sellers/Oligopoly market is a market of few
buyers/None of these)
54
65

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Calcutta University

B.Com (3rd Year)

Question & Answers

Unit II: Imperfect Competition 5–8

Unit III: Factor Price Determination 9 – 14

Unit IV: Basic Issues in Economic Development 15 - 16

Unit V: Basic Features of Indian Economy 17 - 18

Unit VI (A): Sectoral Trends and Issues:- Agricultural Sector 19 - 22

Unit VI (C): Sectoral Trends and Issues: External Sector 27 -28

Unit VII: Social Issues in Indian Economy 29 - 32

Chapter Name Page No.

B. Com. (Semester – IV)

Group – A (1 X 20) : Answer all the questions 53 - 54

Module – I Group – A (2 x 5) : Answer any five questions 56

Group – B (3 X 10) :Answer any ten questions 57

Module – II Group – A (2 X 5) : Answer any five questions 58

Group – B (3 X 10) : Answer any ten questions 59 - 60

Group – A (1 X 20) : Answer the following questions 61 - 62

Group – B (2 X 30) : Answer the following questions 63 - 65

SOURCES OF MONOPOLY POWER:

SHORT-RUN EQUILIBRIUM OF A MONOPOLY FIRM:

LONG RUN EQUILIBRIUM OF A MONOPOLY FIRM:

TYPES OF PRICE DISCRIMINATION:

GOBIND KUMAR JHA 9874411552

DEGREE OF PRICE DISCRIMINATION:

CONDITIONS FOR PRICE DISCRIMINATION:

SOCIAL COST OF MONOPOLY:

GOBIND KUMAR JHA II Imperfect 9874411552

TYPES OF IMPERFECT COMPETITION MARKET:

CHARACTERISTICS/FEATURES OF MONOPOLISTIC COMPETITION:

EXAMPLES OF MONOPOLISTIC COMPETITION:

KEY DIFFERENCE WITH MONOPOLY:

KEY DIFFERENCE WITH PERFECT COMPETITION:

DEMAND CURVE IN MONOPOLISTIC COMPETITION:

SUPPLY CURVE IN MONOPOLISTIC COMPETITION:

GOBIND KUMAR JHA 9874411552

MONOPOLISTIC COMPETITION IN SHORT RUN:

MONOPOLISTIC COMPETITION IN LONG RUN:

POSSIBLE OUTCOMES OF OLIGOPOLY:

GOBIND KUMAR JHA 9874411552

SWEEZY’S KINKED DEMAND CURVE MODEL:

GOBIND KUMAR JHA III Factor Price9874411552

MARGINAL PRODUCTIVITY THEORY OF DISTRIBUTION:

ASSUMPTIONS OF THE THEORY:

SOME KEY CONCEPTS:

CRITICISM OF THE THEORY:

GOBIND KUMAR JHA 9874411552

MARGINAL PRODUCTIVITY THEORY OF WAGE:

DEMAND CURVE OF LABOUR:

SUPPLY CURVE OF LABOUR:

GOBIND KUMAR JHA 9874411552

WAGE DETERMINATION IN AN IMPERFECTLY COMPETITIVE LABOUR

Wage Determination under Monopsony:

Demand for Labour under Monopoly:

CONSTITUENTS OF COLLECTIVE BARGAINING:

FEATURES OF COLLECTIVE BARGAINING:

FACTORS DETERMINING THE POWER OF TRADE UNIONS TO RAISE

GOBIND KUMAR JHA 9874411552

REASONS FOR EXISTENCE OF RENT: