i. All questions in both sections are compulsory. However, there is internal choice in some questions.
ii. Marks for questions are indicated against each question.
iii. Question No.1-4 and 13-16 are very short answer questions carrying 1 mark each. They are required to be answered in one sentence.
iv. Question No.5-6 and 17-18 are short answer questions carrying 3 marks each. Answers to them should not normally exceed 60 words each.
v. Question No.7-9 and 19-21 are also short answer questions carrying 4 marks each. Answers to them should not normally exceed 70 words each.
vi. Question No.10-12 and 22-24 are long answer questions carrying 6 marks each. Answers to them should not normally exceed 100 words each
vii. Answers should be brief and to the point and the above word limit be adhered to as far as possible.
Question1. State the reason why Total Variable Cost (TVC) curve and Total Cost (TC) curve are parallel to each other.
Total fixed cost, which remains unchanged at all given levels of output, is the reason behind vertical parallel distance between TVC curve and TC curve.
State the reason behind U-shape nature of Average Variable Cost curve.
Law of Variable Proportions
If the Total Revenue of a firm increases by 45,000 due to an increase in sale of Good X from 50 units to 65 units, then marginal revenue will be Rs………………………..?
A Production Possibility Curve would be……………………………….. curve if all the available resources in an economy are equally efficient to produce both the goods.(Choose the correct alternative)
(a) a straight line
(b) convex to origin
(c) concave to origin
(d) upward sloping
A straight line.
Question4. Which of the following is a variable cost?
(a) Salary of permanent staff
(b) rent of premises
(c) licence fees
If Total Variable Cost and Total Fixed Cost of producing 10 units are 500 & 200, the value of average cost would be?
Distinguish between Normative Economics and Positive Economics, with suitable examples.
|Positive economics deals with economic issues as they are. It is based on facts and actual data.||Normative economics deals with economic issues as they ought to be. It is based on opinions and is suggestive in nature.|
|Positive statements are strictly neutral towards ends.||Normative statements can only be assessed relative to beliefs and value judgements.|
|e.g. growth rate is 5%; industrial output grew by 3%.||e.g. The unemployment rate should be reduced|
Question5. Why do central problems arise? Discuss briefly.
Central problems are economic problems faced by each and every economy. They arise due to:
(i) Scarcity of resources:- Human wants are unlimited and available resources in relation to same are scarce and limited.
(ii) Alternate uses of resources:- Available resources can be put to multiple uses, hence, the economy has to make a choice amongst alternative uses of available resources