Procedure to Answer 2 Marks Questions
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Give example wherever possible.
If a simple abbreviation is asked, like ‘what is MC?’ expand and write a short paragraph about it.
Don’t spend too much time on this section.
Getting full 2 marks on each question means a whopping TWENTY marks in total.
Note
1. According to PU board, the answer must have at least 4 sentences.
2. In 2 marks questions, your concept awareness is tested.
3. The following questions (next page) are the only ones according to the blue print which can be
asked for 2 marks.
Micro-Economics
Introduction to Micro-Economics
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What is an economic problem and why does it arise?
What are the basic functions of an economy?
Name the basic problems of an economy.
Name the types of economies.
Give the meaning of economy.
Give two examples of a capitalistic economy.
Mention any two differences between positive and normative economics.
Write any four practical importance of micro-economics.
Theory of Consumer Behavior
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Differentiate total utility and marginal utility.
What is the difference between utility and satisfaction
What is cardinal method of utility analysis?
Mention any two features of utility.
What are the properties of a budget line?
Write any two limitations of the law of diminishing marginal utility.
Can an indifference curve be concave to the origin? Why?
Find two differences between budget line and budget set.
Why is an indifference curve sloping from left to right?
What does it mean if an indifference curve has a bulge?
Demand Analysis
1. What are the determinants of demand?
2. Qd=20-p is a demand equation. Identify independent variable, dependent variable, constant and
co-efficient in it.
3. Qd=30-2p is a demand function of onion. Suppose the price of onion in the market is Rs. 10 per
kg, find the quantity demanded.
4. Why does the demand curve slope downwards?
5. Give the meaning of cross elasticity of demand. Write its formula.
6. What do you mean by complimentary goods? Give examples.
7. Consider the demand for onion. At Rs. 10 per kg, demand for onion is 15kg. Suppose the price
increases to Rs. 20 per kg, the demand decreases to 10kg, calculate the price elasticity of
demand.
8. Imagine X and Y are the only two consumers in a market. Their demand for a good is given as
follows. Calculate the market demand for the good and draw the market demand curve.
Price
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12
X Demand
16
14
12
10
8
6
Y Demand
20
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15
12
10
8
Market Demand
9. Suppose there are two consumers in a market and their individual demand functions are
Qd1=15-2p and Qd2 =25-3p. Find out the market demand function.
10. How do the movements along the demand curve occur?
Production and Cost
1. Write production function in the form of equation.
2. If 4 units of labor produce 70 units of ‘x’ and 5 units of labor produce 75 units of ‘x’, calculate
marginal product and average product.
3. Why are average and marginal cost curves ‘U’ shaped?
4. Mention 3 laws of variable proportion.
5. What are the types of returns to scale?]
6. Mention any four short run costs.
7. Mention the costs involved in the long run.
8. Why does the SMC cut SAVC at its minimum point?
9. Write the meaning of opportunity cost.
Perfect Competition
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Distinguish between firm and industry.
Write the 3 essentials of a market.
A firm ina perfect competitive market is a price-taker. Why?
What is meant by shut down point?
Write the meaning of normal profit.
When does a firm reach the breakeven point?
Name any four determinants of supply.
State the law of supply.
If the price of potato increases from Rs. 20 per kg to Rs. 25 per kg, the quantity offered for sale
in the market increases from 100kg to 120kg. Find the price elasticity of supply.
10. What is invisible hand according to Adam Smith?
Imperfect Competition
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Mention the 3 forms of imperfect competitive market.
How does a monopoly differ from a competitive market?
What is selling cost? What is its main objective?
Give two examples of monopolistic competitive industry.
Why is the demand curve of monopolistic competitive firm more elastic than that of a
monopoly?
Macro-Economics
Introduction to Macro-Economics
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What do you mean by nature of macro-economics?
Name any two areas of stud under macro-economics.
Who are the pioneers of micro and macro-economics?
How does macro-economics depend on micro-economics?
National Income Accounting
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Distinguish between final goods and intermediate goods with suitable examples.
Distinguish between consumer goods and capital goods with examples.
Distinguish between nominal national income and real national income.
Name the methods of measuring national income.
What is the opinion of IMF with regard to income from foreign firms?
Nishanth is a lecturer in a college. He teaches his children at home. Are both teachings included
in national income measurement? If not, why?
7. What are externalities? Give an example.
Money and Banking
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Name any four difficulties of Barter system.
Distinguish narrow money and broad money.
Distinguish primary deposits and derivative deposits.
Name the motives of demand for money according to Keynes.
What are the various types of deposits?
Give four objectives of monetary policy.
What do you mean by open market operations?
Consumption and Investment
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What is income, according to Keynes?
How is saving equal to investment?
Explain the relationship between multiplier and marginal propensity to consume.
Distinguish between autonomous and induced investment.
Government Budget and The Economy
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Mention any four objectives of the government budget.
Distinguish between surplus budget and deficit budget.
Differentiate between direct and indirect tax.
What are the major components of non-plan revenue expenditure of the government in
developing countries?
5. What are the uses of the tax system as an instrument of fiscal policy in India?
6. Name any four objectives of fiscal policy.
Open Economy
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Distinguish between closed economy and open economy
What do you mean by multi-lateral trade?
What are the differences between balance of trade and balance of payments?
Distinguish between nominal and real exchange rates.
What is fixed exchange rates?