Important 1. 2. 3. 4. 5. Please solve all the questions in these papers. The papers are designed using the blue print as given by the PUC Board. The questions here include 80-90% of what will come in the finals. Model paper does not include Part E. Part E questions will be published separately. Model Paper 1 Part A Answer All The Following 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. What is positive economics? What is an indifference map? Why is MRS always diminishing? Why does the demand curve shift? Define isoquant. How do you calculate the average revenue? Define profit. What do you mean by ‘laissez faire’ policy? What are externalities? Give the meaning of supply of money. Part B Answer any ten of the following 11. Give the meaning of economy. 12. What does it mean if an indifference curve has a bulge? 13. 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. 14. Why does the SMC cut SAVC at its minimum point? 15. 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. 16. Why is the demand curve of monopolistic competitive firm more elastic than that of a monopoly? 17. How does macro-economics depend on micro-economics? 18. Nishanth is a lecturer in a college. He teaches his children at home. Are both teachings included in national income measurement? If not, why? 19. What do you mean by open market operations? 20. Explain the relationship between multiplier and marginal propensity to consume. 21. Differentiate between direct and indirect tax. 22. Distinguish between nominal and real exchange rates. Part C Answer any 8 of the following. 23. Is economics positive or normative? Discuss. 24. Explain the concept of budget line and budget set with the help of an example. 25. What is income elasticity? Calculate income elasticity of demand when income of a consumer increases from Rs. 10,000 to Rs. 12,000 and demand for rice increases from 30 to 40 kg. 26. Explain long run cost with the help of diagram. 27. 28. 29. 30. 31. 32. Explain the average revenue and marginal revenue of a firm. What is total revenue? Draw a rough sketch of total revenue curve of a monopoly firm. Briefly explain the scope of macro-economics. Describe relationship between national income and welfare. Explain the primary functions of commercial banks. Briefly explain the concept of multiplier of Keynes. Part D Answer any 2 of the following. 33. Explain the optimal choice of consumer or consumer equilibrium using indifference curve analysis. 34. Show how the invisible hand guides the producers and consumers towards equilibrium in a perfect competition. 35. Explain diagrammatically the short run equilibrium of monopolistic firm. 36. Explain the functions of RBI.