18:03:16 TEST PAPER SET A TOPIC- Unit I Introduction 1 ...a. BL is a downward sloping straight line b. Bundles which cost less than consumers money income lies outside the BL c. If

18:03:16 TEST –PAPER SET – A

TOPIC- Unit – I Introduction

Marks: 10

1. Pick up the variable of Macroeconomics. 1

a. Income of a family b. Production of wheat by a farmer c. General price level d. Salary of a computer engineer

2. The central problem of ‘For whom to produce?’ concerns with …………………….. 1

a. Whether rich or poor will purchase the commodities

b. Who will purchase the commodities

c. The distribution of National Income d. Equity and growth 3. Scarcity arises because: 1

a. Wants are unlimited b. Resources are limited c. Resources have alternative uses d. All the above

4. The government has started promoting foreign capital, what will happen to the PPC? 1

a. Growth of resources b. Underutilization of resources c. Mismanagement of resources d. Resources along the PPC

5. Why is PPC concave? Explain 3

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6. Complete the following table: 3

Possibilities Machines in K Wheat in M tons

MRT

A 0 75

B 1 5:1

C 2 8:1

D 3 50

E 4 30

F 5 30:1

18:03:16 TEST-PAPER SET - B


Marks: 10

1. Pick up the variables of Microeconomics: 1

a. Total output in an economy b. Inflation in the industrial sector c. Salary of a engineer d. Total investment

2. The economic problem is concern with ………………………………….. 1

a. production b. growth c. scarcity d. equity

3. ‘Efficiency’ arises when: 1

a. Wastage is the least b. Resources have alternative uses c. Reallocation of resources without

wastage d. Choosing production technique

4. Due to the implementation of employment schemes, what will happen to the PPC? 1

a. Under utilization of PPC b. Along the PPC c. Growth of PPC d. All the above

5. Explain any three characteristic of the PPC? 3

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6. The table below shows PPC. What is the pattern in the table that gives rise to the concave

shape of the PPC? 3

Possibilities Green chilli sugar

A 100 0

B 95 1

C 85 2

D 70 3

E 50 4

F 25 5

18:03:16 TEST-PAPER SET - C


Marks: 10

1. Pick up the example which shows Microeconomic variable depends upon Macroeconomic:1

a. Price determination is related to price of a commodity

b. Salary of a computer engineer will depend upon the wage-rate of the economy

c. National income is the sum total income of all the of all families

d. GDP depends upon the production of wheat of a farmer

2. The technique of ‘How to Produce’, can ……………………………………. 1

a. Increase production b. Solve the problem of distribution c. Growth and equity d. Profits of the firm

3. The natural calamity in a country will place the PPC: 1

a. Outside b. Inside c. on d. away

4. Opportunity Cost is defined as: 1

a. Cost incurred b. Cost forgone c. Additional cost d. Negative cost

5. Draw PPC for the following schedule. Also, calculate the MOC for different combination:3

Combination Rice in ‘000 tonnes

Maize ‘000 tonnes

MOC

A 0 120

B 25 100

C 50 75

D 75 45

E 100 0

6. What are the three central problems of an economy? Why do they arise? 3

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18:03:16 TEST-PAPER SET - D


Marks: 10

1. Pick up the example which shows Macroeconomics depended on Microeconomics: 1

a. Price determination is related to price of a commodity

b. Salary of a computer engineer will depend upon the wage-rate of the economy

c. National income is the sum total income of all the of all families

d. GDP depends upon the production of wheat of a farmer

2. Capital Intensive technique would be chosen in an economy in which : 1

a. Rate of interest is high b. Mechanization is available c. Population is in surplus d. Capital formation is taking place

3. ‘Means’ in a problem which is faced by all economies. What are means? 1

a. Methods. b. Solution c. Resources. d. Techniques

4. PPC shift to the right when there is ……………………in the economy. 1

a. Growth of resources and improvement in technology

b. Underutilization of resources

c. Improvement in technology d. Efficient utilization of resources 5. Production in an economy is below its potential due to unemployment. Government starts

employment generation scheme. Explain its effect using PPC? 3

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6. The shows PPC combination of two goods. Calculate MOC and draw it: 3

Watches Shoes MOC

0 90,000

1 80,000

2 68,000

3 52,000

4 34,000

5 10,000

25:03:16 TEST-PAPER SET - A

UNIT – II Consumer’s Equilibrium M.M = 10

1. When MUx>Px, how will a consumer react: 1

a. Change his income b. Buy more of X c. Wait for the price to decrease d. Buy less of X

2. How many chocolates will you consume if these are free of cost, to achieve equilibrium

1

a. MU is positive b. MU is negative

c. MU is zero d. MU is equal to 3. The equation for budget constraint: 1

a. P1X1 + P2X2 = M b. P 1X1 > P2X 2 = M c. P1X1 + P2X2 > M d. P1X1 + P2X2 < M

4. When MRS > MRE = Px/Py then the consumer: 1

a. Values X more than what market value

b. Values Y more than what market value

c. Values X less than what market value

d. Values Y less than what market value

5. Explain the three properties of Indifference Curve? 3

a. …………………………………………………………………………………………………

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………………………………………………………………………………………… 6. With a hypothetical example explain the Consumer’s Equilibrium in two commodity case?

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25:03:16 TEST-PAPER SET - B


1. Which of the following statements is correct? 1

a. BL is a downward sloping straight line

b. Bundles which cost less than consumer’s money income lies outside the BL

c. If there is an increase in consumer’s income and no change in prices of goods, then the BL will shift to the left.

d. A decrease in the price of good measured along X-axis makes the BL steeper.

2. When MUx/Px>MUy/Py, as a result: 1

a. Consumption of Y rises,& X falls b. Consumption of X rises, & Y falls c. Consumption of X &Y rises d. Consumption of X &Y falls

3. Starting from an initial situation of C’s E, suppose the MU of money increases. How will it

affect the QD of the product? 1

a. It will increase b. It will decrease c. It will remain unchanged d. It will fall to zero

4. The slope of the Indifference curve is measured by: 1

a. Marginal rate of transformation b. Marginal rate of substitute c. Marginal rate of utility d. Marginal rate of technical substitute

5. At the point of Equilibrium, IC must be convex to the origin. Why? 3

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25:03:16 TEST-PAPER SET - C


1. The Law of Diminishing MU states: 1

a. Successive units give more satisfaction.

b. Successive units give lesser satisfaction

c. Successive units give higher value d. Successive units give no satisfaction. 2. Which of the of the following condition of consumer’s equilibrium is correct in case of a

single commodity: 1

a. MU of good / Price of good = MUm b. Price of good / MU of good = Mum c. MU of good / MU of money = Px d. MUm / Price of good = MU of good

3. .………….. shows different possible combination of two goods that a consumer can buy

with given income and price of goods: 1

a. Budget set b. Budget line c. Indifference set d. Indifference curve

4. The shape of the Indifference curve is : 1

a. Concave to the origin b. Convex to the origin c. Rectangular hyperbola d. Straight line

5. What would be the impact on the Budget Line when: 3

(i) Price of good X increases: ……………………………………………………………………………….

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(ii) Income of the consumer decreases:

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……………………… 6. If the consumer is in a position when MUx / Px<MUy / Py, what should he do to be in

equilibrium? 3

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25:03:16 TEST-PAPER SET - D


1. When does a commodity possess utility? 1

a. When the consumer requires the commodity

b. When the commodity satisfies a want

c. When the consumer has a income d. When MRS = price ratio 2. Budget ratio indicates: 1

a. Price ratio b. Income ratio c. Cost ratio d. MRS ratio

3. Which of the following equation is incorrect: 1

a. MU = TUn+2 – TUn+1 b. MU = TU / Q c. MU = TUn – TUn-1 d. TU = ∑MU

4. When TU is increasing at a diminishing rate, MU must be: 1

a. increasing b. decreasing c. constant d. negative

5. A consumer consumes only two goods X and Y. Aswini’s money income is Rs.24 and

the prices of Good X and Y are Rs. 4 & 2 respectively. Answer the following questions?

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(i) Can the consumer afford a bundle 4X and 5? Explain. ………………………………………

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…………………………………………………………………………………… (ii) What will be the MRSxy when the consumer is in equilibrium? Explain. …………

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…………………………………………………………………………………… (iii) What is the equation of BL and its slope? …………………………………………………………

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…………………………………………………………………………………… (iv) Give examples of two bundles on the BL? …………………………………………………………

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…………………………………………………………………………………… (v) How much of X &Y will he buys spending his entire income? ……………………………

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…………………………………………………………………………………… (vi) How does the BL change (a) if consumer’s income increase to Rs.48 (b) if price of

good X falls by Rs.1 but price of good Y and income remains unchanged? …………

25:03:16 TEST-PAPER SET - E


1. Suppose a consumer can afford to buy 6 units of good X and 8 units of good Y if Pooja

spends her entire income. The price of two goods is Rs. 6 & 8 respectively. How much is

the consumer’s income? 1

e. Rs. 110 f. Rs. 64 g. Rs. 36 h. Rs. 100

2. What can lead to a change in the Budget Set of a consumer? 1

a. Change in the income b. Change in the price of good X c. Change in the price of good Y d. All the above

3. Marginal Utility of money is: 1

a. diminishing b. increasing c. constant d. negative

4. Starting from initial situation of consumer equilibrium, suppose that MU of money

increases. How will it affect the quantity demanded of the product? 1

a. it will increase b. it will decrease c. it will remain unchanged d. it will fall to zero

5. Explain the two properties of BL? 3

(i) ………………………………………………………………………………………………

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25:03:16 TEST-PAPER SET - F


1. A consumer’s satisfaction from a commodity is maximum when MU is : 1

a. Less than price b. More than price c. Equal to price d. Equal to quantity

2. An increase in the price of good X will make the Budget Line: 1

a. slanting b. constant c. steeper d. curve

3. Slope of the Indifference Curve is : 1

a. MRE b. MRExy c. MRSxy d. Px /Py

4. What will happen to MU, when TU falls: 1

a. MU is constant b. MU is falling but positive c. MU is negative d. MU is rising

5. Complete the following table: 3

Quantity consumed 1 2 3 4 5

Total Utility 50 120 150

Marginal Utility 40 20

6. Explain with the help of diagram the following: 3

(i) Why is an Indifference Curve convex to the origin?

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……………………………………………………………… (ii) Why does a higher Indifference Curve represent a higher level of satisfaction?

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08:05:16 TEST – PAPER SET - A

UNIT – II DEMAND M.M= 10

1. The upward movement of the Demand Curve is due to: 1

a. Increase in the income of the consumer

b. Increase in the price of related good

c. Increase in the price of the good.

d. Increase in the price of normal good

2. Exception to the law of demand is: 1

a. Giffen’s good b. Normal good c. Complementary good d. Substitute good

3. The graphic representation of a table showing price & demand relationship

for a commodity in the market is called: 1

a. Individual demand curve b. Producer’s demand curve c. Market demand curve d. Consumer’s demand curve

4. Demand can also be a positively sloping curve? Refute or defend this

statement. 3

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5. What is the relation between good X and Y in each case, if with the fall in the

price of Y QD of X increases? 3

08:05:16 TEST – PAPER SET - B


1. What does a downward movement along the same demand curve indicate? 1

a. Increase in demand b. Decrease in demand c. Contraction in demand d. Expansion in demand

2. Income demand curve of an inferior good has a : 1

a. Positive slope b. Negative slope c. Zero slope d. Infinite slope

3. Which of the following factor causes a decrease in demand for a commodity?1

a. Fall in the price of substitute good

b. Fall in price of complementary good

c. Rise in price of the given commodity

d. Expectation of future increase in the price of the commodity

4. Distinguish with an example the difference between normal good and inferior

good? 3

Normal good Inferior good a.

b.

c. E.g.

5. There is increase in demand of electricity? How is it caused? Explain briefly how

in two ways demand of electricity can be decreased? (Value Based) 4

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08:05:16 TEST – PAPER SET - C


1. As a result of rise in consumer’s income, demand curve for coarse grain

(inferior good): 1

a. Shift to the left b. Shift to the right c. Parallel to the X-axis d. Parallel to the Y-axis

2. Which of the following pairs represent substitute good? 1

a. Car and petrol b. Coffee and tea c. Bread and butter d. Vada and sambar

3. Shift in demand curve means: 1

a. Fall in demand due to rise in own price of the commodity

b. Rise in demand due to fall in own price of the commodity

c. Change in demand due to factors other than change in own price of the commodity

d. Change in the market supply

4. A good is inferior for one and at the same time, normal good for another

consumer. Explain? (Value based) 3

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5. How is ‘Law of Demand’ derived from Utility analysis? 4

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08:05:16 TEST – PAPER SET - D


1. Change in demand implies: 1

a. Shifting of price b. Shifting of income c. Shifting of demand d. Shifting of quantity demanded

2. Exceptions to the Law of Demand is: 1

a. Giffen’s good b. Inferior good c. Superior good d. All the above

3. If the price of good X rises and Quantity Demanded of good Y falls, how are

they related: 1

a. Inferior good b. Substitute good c. Complementary good d. Unrelated good

4. Explain the factors that affect only the Market Demand? 3

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5. Explain with the help of diagrams the effect of the following changes on the

demand of a commodity, when: 4

a. An unfavourable change in the taste of a buyer for the commodity.

b. A fall in the income of its buyer, if the commodity is inferior good.

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08:05:16 TEST – PAPER SET - E


1. When income of the consumer falls the impact on price-demand

curve of an inferior good is: 1

a. Shift in the right b. Shifts to the left c. There is upward movement d. There is downward movement

2. Fees in Public schools have increased several times; as a result the

demand for public school education by the poor has declined. What

steps should the government do? 1

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3. Increase in ‘demand’ means: 1

a. Upward movement b. Downward movement c. Leftward shift d. Rightward shift

4. Explain market demand? (numerically, diagrammatically and

verbally) 3

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5. What happens to the demand of a good when consumer’s income

changes? 4

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08:05:16 TEST – PAPER SET - F


1. Demand curve is a ‘negatively downward sloping’ curve due to: 1

a. Increase in the income of the consumer

b. Law of diminishing marginal utility

c. Decrease in the income of the consumer

d. Law of diminishing returns

2. Define ‘Income effect’? 1

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3. Price and demand can be directly related for …………………. 1

a. Exceptional good b. Limited good c. Necessary good d. Life saving good

4. What is ‘Market Demand’? State any two factors causing

‘decreasing’ in only market demand? 3

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a. …………………………………………………………………………………………………

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5. Explain the change in demand of a good on account of change in

prices of related goods? 4

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08:05:16 TEST – PAPER SET - G


1. In what sense is water a free good and an economic good? 1

a. availability b. usage c. storage d. scarcity

2. Price of petrol is very high but still its demand continues to be very high.

Suggest two measures by which demand of petrol can be decreased? 1

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3. Which of the following commodities does not abide to the ‘Law of Demand’:

1

a. salt b. antique commodity c. gold d. all of the above

4. Derive the ‘law of demand’ from a single commodity equilibrium condition,

that is Marginal Utility = Price? 3

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5. Given the price of a good, how will a consumer decide as to how much of

that good to buy? 4

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08:05:16 TEST – PAPER SET - H


1. Households in Southern India prefer to eat bananas for breakfast as oranges

of Maharashtra have been destroyed and price of apples and grapes have

also risen, what will be the impact of it: 1

a. Rightward shift in the demand curve of apples and grapes

b. Leftward shift in the demand of bananas

c. Rightward shift in the demand of bananas

d. No shift in the demand curve of any fruits

2. The graphic representation of a table showing price and demand

relationship for a commodity in the market is called: 1

a. Individual demand curve b. Market demand curve c. Consumer’s demand curve d. Family demand curve

3. What is demand function? Explain it mathematically. 1

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4. There is increase in demand of electricity? How is it caused? Explain briefly

how in any two ways demand of electricity can be reduced? 3

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5. In 2001, the Supreme Court of India banned smoking in public places. How is

this likely to affect the price of cigarettes and the quantity demanded? 4

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08:05:16 TEST – PAPER SET - I


1. What will be the effect on the demand curve of ice-cream when, price of milk

increases: 1

a. Rightward shift b. Leftward shift c. Downward movement d. Upward movement

2. The effect of change in price of goods on demand of a commodity is: 1

a. Income effect b. Price effect c. Substitute effect d. Cross effect

3. The demand of the following goods varies inversely with income: 1

a. Substitute good b. Inferior good c. Normal good d. Giffen’s good

4. Can a demand curve be upward sloping curve? 1

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5. What is the effect of unequal distribution of income on market demand of a

commodity? Explain using a diagram? 3

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6. If the price of petrol and diesel are slashed, what will be the effect of it on

the demand of vehicles? Give reasons. 3

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08:05:16 TEST – PAPER SET - J


1. Which of the following situation is considered to be DEMAND? 1

a. Meghna is willing to buy 10 bowls of rice.

b. Prerna would like to buy 2 pairs of shoes

c. Soumya is looking for a pen d. Nancy buys 2 kg of wheat. 2. Which of the following statement is true: 1

a. Demand varies directly with the price of a commodity.

b. A demand curve is a convex negatively sloping curve.

c. Relationship between income and demand is income demand

d. Complementary goods give same kind of satisfaction.

3. Given the demand function is qd = 20 -2p, what is the demand when price is

Rs. 5? 1

a. 15 b. 10 c. 20 d. 18

4. Are the following pairs complementary, substitute or unrelated goods: 3

(i) Glue and scotch tape: …………………………………………………….

(ii) Paper and pen: ………………………………………………………………

(iii) Utensils and bangles: ……………………………………………………..

(iv) CDs and pendrives : ………………………………………………………..

(v) Camera and SD card: ……………………………………………………..

(vi) School and students: ……………………………………………………..

5. Mention any three exceptions to the ‘Law of Demand’? 3

a. …………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………

b. …………………………………………………………………………………………………………………

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c. …………………………………………………………………………………………………………………

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15:05:16 TEST – PAPER SET – A

UNIT – II Elasticity of Demand M.M =15

1. When demand for a commodity is Perfectly Inelastic, an increase in the price

of 2%, leads to increase in quantity demanded by ……………………… 1

a. 10% b. 0% c. 3% d. 2%

2. Which one of the following commodities will not have inelastic demand? 1

a. salt b. medicine c. mobile phone d. school uniform

3. If the demand curve is a rectangular hyperbola, absolute value of Ed is ? 1

a. one b. zero c. infinity d. less than one

4. Ed = (-)1. A consumer spends Rs.90 to buy the good at the current price. How

many units will he buy when the price changes to Rs.2 per unit? Explain it by

expenditure method? 3

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5. A consumer buys 20 units of a good at a price of Rs.5 per unit. He incurs an

expenditure of Rs.120 when he buys 24 units. Calculate the Ep using %

method. Comment on the likely shape of the demand curve based on this

information. 3

………………………………………………………………………………………………………………………

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……………………………………………………………………………………………………………………

6. Explain the different degrees of Ed on a single demand curve? 3

7. Explain by giving examples how substitute determines the Ep? 3

15:05:16 TEST – PAPER SET – B


1. For a typical straight line demand curve, the Ed at a point where it meets the

quantity axis will be ………….. 1

a. ∞ b. 0 c. <1 d. >1

2. Which of the following good have inelastic demand? 1

a. textbook b. air conditioner c. cars d. LED Television

3. The Ed = 0.5. The % change in QD = 4. What is the % ∆ in price? 1

a. 5 b. 4 c. 8 d. 6

4. The co-efficient of Ep of a commodity is 0.2. when its price is Rs. 10 per unit.

The QD =40 units. If the price falls to Rs. 5 per unit, how much will be its QD?

3

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5. If ∆P / P = 0.25 and Ep= 1. Calculate the % fall in demand. Also estimate the

initial expenditure if new expenditure is Rs.600 at the price of Rs.10. 3

………………………………………………………………………………………………………………………

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6. Draw a single DD curve to show: (a) Inelastic (b) elastic &(c) Perfectly elastic?

3

7. Explain by giving examples how proportion of income spent on commodity

can change Ed? 3

15:05:16 TEST – PAPER SET – C


1. If close substitute of a product are readily available in the market, its Ed will

be …………… 1

a. Greater than one b. Less than one c. Equal to one d. Infinite

2. If total expenditure does not change with change in the price of the

commodity then, Ep will be ………………………… 1

a. zero b. one c. greater than 1 d. less than 1

3. Demand for car for a poor man is: 1

a. inelastic b. relatively elastic c. perfectly inelastic d. infinite

4. Giving reasons state whether the following statements are true or false: 3

a. Ep at a point when a straight line demand curve meets the X-axis is ∞

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………….

b. The price of a good and TE on it by a household both rises by 5%, Ep = 1

…………………………………………………………………………………………………………………

……………………………………………………………………………………………………………

c. Demand for a good will be more elastic in the long run than in the short

run …………………………………………………………………………………………………………

………………………………………………………………………………………………………………..

5. When the price of a commodity falls from Rs.8 per unit to Rs.7 per unit, TE on

it increases from Rs.200 to Rs.210. calculate Ed by % method? 3

………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………

6. How does the nature of a commodity influence the Ep? 3

7. Prove will the help of a diagram, the various Ep as: (a) Ed = 1, (b) Ed > 1,

(c) Ed = 0 3

15:05:16 TEST – PAPER SET – D


1. When there is no change in QD in response to any change in price, it is a

situation of : 1

a. Zero price elasticity b. Infinite price elasticity c. Unitary price elasticity d. Demand elasticity is > 1

2. After the mid-point of a straight line demand curve Ep is: 1

a. Ep> 1 b. Ep< 1 c. Ep = 0 d. Ep = 1

3. Generally commodities which are luxuries good have Ep, which is: 1

a. Relatively inelastic b. Relatively elastic c. Perfectly elastic d. Perfectly inelastic

4. For a commodity, ∆P / P = -0.2, and Ed= -0.5. Find QD after a fall in the price

when initially it was 60 units? 3

……………………………………………………………………………………………………………………………

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5. Price elasticity of demand for flowers and toys are (-) 0.9 and (-) 0.5. Demand for

which one is more and why? 3

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6. A consumer buys 13 units of a good at a price of Rs.11 per unit. When price rises

to Rs. 13 he buys 11 units. Use expenditure approach to find Ep. Also comment

on the shape of the DD curve based on the information? 3

7. If the consumer is habitual to a commodity, how will his Ed change for it in place

of unfavourable commodity? 3

15:05:16 TEST – PAPER SET – E


1. Which of the following goods will have a steep sloping demand curve: 1

a. cars b. air conditioner c. pen d. lipsticks

2. when total expenditure varies directly with price, then: 1

a. Ep> 1 b. Ep = 1 c. Ep< 1 d. Ep = 0

3. The Ep = 2. The % ∆ in price = 5. What is the % ∆ in QD? 1

a. 5 b. 10 c. 2.5 d. 0.4

4. The initial demand for a commodity =60 units, the demand falls by 5 units

due to rise in price by Rs.10. If Ep = 1.5, calculate the price before change in

demand? 3

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5. A consumer buys 40 units of a good at a price of Rs.3 per unit. When price

rises to Rs.4 per unit, he buys 30 units. State whether demand is elastic or

inelastic by expenditure method? 3

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6. Prove with a hypothetical schedule: (a) perfectly inelastic and (b) perfectly

elastic, also draw the diagram. 3

7. Mention any three factors affecting elasticity of demand? 3

15:05:16 TEST – PAPER SET – F


1. If close substitute is already available in the market, its Ep will be……….. 1

a. Greater than one b. Less than one c. Equal to one d. Equal to zero

2. When % ∆ in demand > than % ∆ in price, demand is said to be …. 1

a. inelastic b. elastic c. perfectly inelastic d. unitary

3. Slope of the demand curve will be a gentle slope if: 1

a. Ed >1 b. Ed < 1 c. Ed = 0 d. Ed = ∞

4. Given Ed = -0.2 and % increase in QD = 20%, find the % change in expenditure?3

…………………………………………………………………………………………………………………………

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………………………………

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…………

5. From the following data, calculate Ep by % method: 3

Price TE

4 600 5 525

6. With the help of a schedule explain the different situations of Ed by Outlay

method? 3

7. Explain the three factors that affect the Ed? 3

PS. 18 HOTS QUESTIONS FROM VK JAIN AND OHRI

20:05:16 TEST– PAPER SET – A

TOPIC – Supply and Elasticity of Supply M.M=15

1. Supply curve is positively upward sloping as: 1

a. A fall in the input prices b. Increase in the price of related good

c. Reduction in the excise duty d. Increase in the number of producers

2. Following are the essential features of supply: 1

a. Total quantity of a product available for sale at a particular point of time

b. Quantity of a product offered for sale at a certain price

c. Supply is a stock variable d. Total sales in the market 3. What will be the affect on the supply curve of a T.V. set if there is an increase

in the excise tax: 1

a. Move downward b. Shift to the left c. Upward movement d. Shift to the right

4. What is the Es of a commodity, when the supply line is a 45 degree angle?

a. Es > 1 b. Es < 1 c. Es = 1 d. Es = 0

5. Draw the following schedule and mention the coefficient of price Es? 3

Px Qx 10 5

10 10

10 12

6. Supply of a commodity is 1200 units at a price of Rs.12 / unit. If the supply of

commodity increases to 1600 unit, what will be the new price of the

commodity if Es = 2? 4

7. What will happen to the supply curve if: 4

a. Government withdraws the Taxes on land.

b. Price of the related goods is increased.

………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………..

20:05:16 TEST– PAPER SET – B


1. Following are the essential features of market supply: 1

a. Total quantity of a product available for sale at a particular point of time

b. Quantity of a product offered for sale at a certain price

c. Supply is a stock variable d. Total sales in the market 2. Supply curve is also be a negatively upward sloping as: 1

a. A fall in the input prices b. Increase in the price of related good

c. Reduction in the excise duty d. None of the above 3. What is the Es of a commodity, when the supply line is a 15 degree angle?

a. Es > 1 b. Es < 1 c. Es = 1 d. Es = 0

4. What will be the affect on the supply curve of a T.V. set if FIFA World Cup is

approaching: 1

a. Move downward b. Shift to the left c. Upward movement d. Shift to the right


Px Qx

5 5

8 5 13 5

6. What will happen to the supply curve if: 4

a. Government pursues a policy of Liberalisation.

b. Trade Union joins together to increase the wage rate.

7. A fruit seller sells 56 Kg per day when price of apples are Rs.7 per Kg. when

the price rises to Rs 8 per kg, how much will be the QS when Es is unitary? 4

20:05:16 TEST– PAPER SET – C


1. Which of the following statements is correct: 1

a. There is a difference between supply and stock

b. Supply does not depend on government tax-policy

c. Stock refers to the quantity which comes to market for sale

d. Stock and supply are always equal

2. The rise in supply due to rise in price is called: 1

a. Increase in supply b. Decrease in supply c. Extension of supply d. Contraction of supply

3. If 13% rise in price causes 23% increase in supply, Es will be: 1

a. 1.5 b. 1.7 c. 1 d. 0.7

4. When supply is a vertical line, it indicates: 1

a. Es > 1 b. Es < 1 c. Es = 0 d. Es = ∞

5. Draw the following schedule and mention the coefficient of price Es, when

price rises from 2 to 3? 3

Px Qx

1 20 2 40

3 60

6. Es of Good Y is ¾ the price of Good X. the price of X rises from Rs.10 to

Rs.11.50 per unit and its QS increases by 18 %. If price of Y falls from Rs.11 to

Rs. 9.90, find the % fall in supply? 4

7. What will happen to supply curve when: 4

a. The firm works with obsolete technology.

b. Subsidies are granted by the government.

20:05:16 TEST– PAPER SET – D


1. Change in market supply is effected by: 1

a. Number of producer b. Supply of each firm c. Profits of the industry d. All the above

2. Reason for decrease in supply is due to: 1

a. Fall in the price of related good b. Fall in the cost of production c. Goals of the producer is sales

maximization d. Fall in the technological grade

3. Sx is a function of ( Px, Py, tec., goals, GT, Ip…….) this means ………… 1

a. Exception to the law of supply

b. Determinants of supply

c. Slope of the supply curve d. Slope of Es 4. When supply is a slanting line, it indicates: 1

a. Es > 1 b. Es < 1 c. Es = 0 d. Es = ∞

5. Draw the following schedule and mention the coefficient of price Es, when

price rises from 22 to 33? 3

Px Qx

11 200 22 400

33 600

6. What will happen to the supply curve when: 4

a. Increase in the price of raw-material.

b. Subsidy is curtailed.

7. At a price of Rs.5 per unit of a commodity, total revenue is Rs.800. when its

price rises by 20%, total revenue increases by Rs.400. calculate its Es and

comment on the shape of the supply curve? 4

20:05:16 TEST– PAPER SET – E


1. If there is a fall in the sale of Ice-cream, what would the producer likely to

do? 1

a. Shift the supply rightward b. Shift the supply leftward c. Increase the price d. Wait for sales maximization

2. Law of supply is a ………………………….. statement. 1

a. quantitative b. summative c. qualitative d. negative

3. If slope of the supply curve is ∆P/ ∆QS, then Es is………………….. 1

a. ∆P / P *100 b. ∆Q / Q * 100 c. ∆Q / ∆P *P / Q d. ∆P / ∆Q * Q / P

4. Market supply curve is obtained by …………………. Summation of the entire

individual supply curve. 1

a. Vertical b. Diagonal c. horizontal d. all of the above


Px Qx

5 5 8 5

13 5

6. Es is of a commodity Y is ½ the price Es of commodity X. 16% rise in the price

of X result in 40% rise on its supply. If the price of Y falls by 8%. Calculate the

% fall in its supply. 4

7. What will happen to the supply curve when: 4

a. Price of related good increases.

b. When a firm spends more on advertisements.

29:05:16 TEST –PAPER SET – A

TOPIC – Price Determination M.M=10

1. Draw a diagram to show Excess Demand? 1

2. Give one example of indirect intervention of government in the market and its effect? 3

3. A shift in demand has a larger effect on price than the shift in supply, explain the chain effect and

analysis the slope of the curves? 6

29:05:16 TEST –PAPER SET – B


1. Draw a diagram to show Excess Supply? 1

2. What do you understand by (a) control price and (b) support price? Explain its effect on the

market? 3

3. Does increase in demand necessarily cause rise in price? Explain the chain effect, if you refute or

defend the statement? 6

09:05:14 TEST –PAPER SET – C


1. With help of a diagram explain what will happen if the price prevailing in the market is above the

market price? 1

2. Give one example of direct intervention of government in the market and its effect? 3

3. Explain the chain effect on Equilibrium Price and Equilibrium Quantity when : 6

a. Income of the consumer increases for Inferior Good.

b. Number of firms in the market increases.

29:05:16 TEST –PAPER SET – D


1. What is minimum support price? What is its economic value? 1

2. Can you think of any commodity on which price ceiling is imposed in India? What may be the

consequences of price ceiling? 3

3. How will the change in the price of coffee affect the equilibrium price of tea? Explain the effect on

equilibrium quantity also through a diagram? 6

Model Paper SET - I

SUJBECT – ECONOMICS

M.M = 50

Syllabus of economics for xii

PART – INTRODUCTORY MICROECONOMICS (all chapters of only Microeconomics)

Total marks = 50

1. Introduction (weight age 10 marks)

2. Consumer Equilibrium and Demand ( weight age 20 marks)

3. Supply ( weight age 10 marks)

4. Price Determination ( weight age 20 marks)

ECONOMICS

Time allowed : 1 ½ hours Maximum marks : 50

General Instructions:

(a) All questions in both the sections are compulsory.

(b) Marks for questions are indicated against each.

(c) Question number 1-5 are very short-answer questions carrying one marks each. They are

required to be answered in one sentence each.

(d) Question number 6-10 are short-answer questions carrying three marks each. Answer to them

should not exceed 60 words each.

(e) Question number 11-13 are also short-answer questions carrying four marks each. Answer to

them should not exceed 70 words each.

(f) Question number 14-16 are long-answer questions carrying six marks each. Answer to them


(g) Answer should be brief and to the point and the above word limit be adhered to as far as

possible.

(h) Number the questions properly in the answer sheet as given in the question paper.

1. Why Production Possibility Curve is also called the opportunity cost curve? 1

2. What happen to total expenditure on a commodity when its price falls and its demand is price

elastic? 1

3. What should a producer do to stop conspicuous consumption? 1

4. If a farmer grows rice and wheat, how will an increase in the price of wheat affect the supply curve

of rice? 1

5. Which supply curve is a part of the short run supply curve? 1

6. For a consumer to be in equilibrium why must marginal rate of substitute be equal to the ratio of

price of the two goods?

OR

Why is the consumer in equilibrium when he buys only that combination of the two goods that

Is shown atthe point of tangency of the budget line with an indifference curve? 3

7. Can environment be factors which lead to a shift of the PPC? 3

8. In 2001, the Supreme Court of India banned smoking in public places. How is this likely to affect the

average price of cigarettes and the quantity sold? 3

9. The price elasticity of demand of good X and Y are in the ratio of 1: 3. A 10% rise in the price of good

X results in the fall in its demand from 500 to 400 units. Calculate the percentage change in quantity

demanded of good Y when its price falls from 10 to 8 per unit?

OR

Can elasticity of demand be explained with the help of expenditure of the consumer? 3

10. Can the various degrees of elasticity explained on a single Supply Curve? 3

11. Explain the effect of the fall in the Income of the consumer? Elaborate it with the help of diagrams?

4

12. With inflation the Labour Union urges the producers to increase the wage rate and improve the

technology of the unit. Explain what will happen to the supply curve and why? 4

OR

Explain main reasons of the occurrence of the first phase of the law of diminishing return to a

factors? Why does the producer chose the second phase for equilibrium?

13. Why is Demand curve in the shape of a rectangular hyperbola not considered as degrees of elasticity

of demand? 4

14. How are decision taken by consumers and producers in a market co-ordinate? 6

OR

Simultaneous change in demand and supply of a commodity. When will it result in:

a. No change in equilibrium price.

b. A fall in equilibrium price.

15. Economic problem arises in all the economies of the world. Is this true. Explain it? 6

16. Distinguish between Market Demand and Individual Demand. Mention any three factors that affect

only the market demand? 6

Model Paper SET - II

SUJBECT – ECONOMICS

M.M = 50

ECONOMICS

Time allowed : 1 ½ hours Maximum marks : 50

General Instructions:

(a) All questions in both the sections are compulsory.

(b) Marks for questions are indicated against each.

(c) Question number 1-5 are very short-answer questions carrying one marks each. They are

required to be answered in one sentence each.

(d) Question number 6-10 are short-answer questions carrying three marks each. Answer to them


(e) Question number 11-13 are also short-answer questions carrying four marks each. Answer to

them should not exceed 70 words each.

(f) Question number 14-16 are long-answer questions carrying six marks each. Answer to them


(g) Answer should be brief and to the point and the above word limit be adhered to as far as

possible.

(h) Number the questions properly in the answer sheet as given in the question paper.

1. Give an example showing dependence of macro-analysis on micro-analysis? (1)

2. Which of the two intersecting supply curve has higher price elasticity? (1)

3. State the condition of consumer’s equilibrium in case of indifference curve approach? (1)

4. What is meant by effective Demand? (1)

5. How is Total Utility derived from Marginal Utility schedule? (1)

6. Given price of a good, how does a consumer decide as to how much of that good to buy? (3)

OR

Prove diagrammatically that no two indifference curve can intersect each other?

7. Price of commodity A is 10 per unit and total revenue at this price is 1,600. When its

price rises by 20%, total revenue increases by 800. Calculate its price elasticity of supply? (3)

8. Price of LPG cylinders has increased.’ Explain any two ways, by which demand for LPG cylinders can

be decreased? (3)

9. Draw a schedule to analyze the Concave shape of the PPC? (3)

10. Explain the relationship of price and expenditure with the help of a numerical example? (3)

OR

With relevant examples explain any three factors determining elasticity of price?

11. ‘A producer will increase his profits by increasing production when Skill India becomes a success’.

Explain? (4)

12. Why is it that the Indifference curve that is below the Budget Line and cuts it at two different points

cannot be the IC for equilibrium? (4)

OR

Derive the law of demand from the single commodity equilibrium condition “marginal

utility = price”.

13. What will be the shape of the supply curve and its elasticity when: (4)

a. Es Greater than one.

b. Es Equal to one.

Explain it with a suitable diagram.

14. Explain how the demand for a good is affected by the income of the consumer and the

price of related goods? Give examples? (6)

15. How would the equilibrium price be affected if: (6)

a. Increase in the income of a buyer of an inferior commodity.

b. Sales tax of the commodity increases.

16. Giving reasons, state whether the following statements are true or false: (6) a. PPC can

be a constant.

a. Demand curve can be straight line.

c. Monotonic preference takes place on Indiffernce curve.

c. PPC can be constant.

Documents

18:03:16 TEST PAPER SET A TOPIC- Unit I Introduction 1 ...a. BL is a downward sloping straight line b. Bundles which cost less than consumers money income lies outside the BL c. If