1 HSE (II) Time: 2 3/4 hour Score: 80

ECONOMICS
1. Find the odd man out. Justify your answer. (a) Demand curve shifting t the right. Demand curve shifting to the left, horizontal supply curve, supply curve shifting to the right. (b) 2. 3. AC= TC/Qty, AFC= TFC/Qty, AVC= MC/Qty, AVC= TVC/Qty (1) (1)

Construct an imaginary production possibility schedule and draw the curve? (3) There are two goods X and Y. When the price of X increased the demand for Y increased. What kind of goods are X and Y ? (1)

4.

Complete the table A M1 M2 M3 M4 (2) B

5. 6.

What do you mean by the term Paradox of Thrift ? Given C = 0.8 and M = 0.3 calculate the open and closed economy multiplier?

(2)

(3)

7.

Originally a product was being sold for Rs.10/- and the qty demand was 1000 units. The Product price changes to Rs.14/- and as a result, the quantity demand changes to 500 units Calculate the price elasticity ? (2)

8.

Suppose the demand and supply curves of salt are given by qD = 1000 P, qS = 700 + 2P (a) Find the equilibrium price and quantity ?

2 (b) Now suppose that the price of an input used to produce salt has increased so that the new supply curve is qS = 400 + 2P How does the equilibrium price and quantity change? 9. (4)

From the schedule provided below calculate Total revenue and price elasticity of demand ? Q P MR 0 10 1 9.5 9.5 2 9 8.5 3 8.5 7.5 4 8 6.5 5 7.5 5.5 6 7 4.5 7 6.5 3.5 8 6 2.5 9 5.5 1.5 10 5 0.5 (6)

10.

Categorise the following components into those used under income method and expenditure method ? (a) Net exports (x-m) (b) Compensation of employees (c) mixed income (d) operating surplus (e) gross capital formation (f) private final consumption expenditure (g) govt. expenditure (3)

11. (a) Complete the table Output 0 1 2 3 4 5 6 7 8 9 10 44 49 53 59 67 80 95 115 TFC 20 TC 20 30 TVC AFC AVC AC MC

(b) draw TFC, TVC & TC on the same set of axis

(8)

3 12. A consumer wants to consume two goods. The price is of two goods are Rs. 4 and Rs.5 respectively. The consumers income is Rs.20 (i) (ii) Write down the equation of the budget line ? How much of good I can the consumer consume if she spends her entire income on that good? (iii) How much of good 2 can she consume if she spends her entire income on that good ? (iv) 13. What is the shape of the budget line ? (5)

Prepare a table shows the distinction between perfect competition , monopoly, monopolistic competition and oligopoly ? The points of distinction are; (a) Number of firms (b) Nature of product (c) Demand curve (d) Price (e) Freedom of entry (f) Selling cost (6)

14.

Prepare a seminar report about the topic the functions of central bank ? (hint:Title, Introduction, Content, Conclusion) (8) (2)

15. 16.

What do you mean by parametricshift of a line ? Match columns B and C with A A Export > Import Import > Export Export = Import B Trade balanced Trade surplus Trade deficit C Unfavourable Balanced trade Favourable trade

(3) 17. 18. Measure elasticity of demand in a straight line demand curve? The following table shows the TR and TC of a competitive firm. Calculate AR, MR and Profit at each output level. Determine also the market price of the good? Qty Sold 0 1 2 3 TR (Rs) 0 5 10 15 TC (Rs) 5 7 10 12 Profit AR MR (3)

4 4 5 6 7 20 25 30 35 15 23 33 40 (4)

19.

Complete the Chart (3)

Government Budget

Revenue budget

Revenue expenditure

Capital Receipts

Tax Revenue

Plan capital Expenditure

Plan Revenue expenditure

20.

Categories the following variables under appropriate headings. Full Employment, National output, percapita Income, general price level, equilibrium outputs of a firm, price of rubber. (3)

21.

Complete the Chart

firms

Household

(2)

22.

Provide appropriate term

A GNP- depreciation GDP+Net factor Income from abroad Value of output Intermediate

B ----------------------------

Consumption Personal Income Directs taxes ---------(4) 23. The rate at which one currency is exchanged for one another write appropriate term. (1)