MODEL QUESTION

ECONOMICS - I

B.Com(1st year)

MODULE -1
UNIT 1 : Introduction

Short Questions (2 marks)

1. What are the basic economic entities?

2. What is Business Economics?
3. What do you mean by price system?
4. Differentiate between value and price.
5. Differentiate between income and wealth.
6. What do you mean by Economic System?
7. What do you mean by production possibility curve?
8. State two reasons for which PPF shifts rightward.
9. What are the basic problems of an economic entities?
10. What do you mean by the slope of a curve?

UNIT 2 : Basic of Demand and Supply

Short Questions:- (2 Marks)

1. Mention two cases where the consumers demand curve shifts upward.
2. What do you mean by price elasticity of demand?
3. What is income elasticity of demand?
4. What is the relation between marginal utility curve and demand curve?
5. What is the shape of a perfectly elastic demand curve?
6. What is Veblen Effect?
7. Give two reasons for price-elasticity of demand to be relatively inelastic?
8. If the cross elasticity of demand between two goods X and Y is positive , state how the
goods are related to each other,
9. Draw a demand curve and indicate the point where price elasticity of demand is
unitary.
10. Mention two factors, other than price of the product, which influence the supply of a
commodity.
11. What is a supply curve?
12. What do you mean by demand function?
13. Distinguish between change in demand and change in quality demanded?
14. What happens to the equilibrium price in a competitive model if other factors
remaining the same, the supply curve shifts to the right?
Medium Questions: -(4 Marks)

1. What is demand? Mention the factors affecting demand.

2. How the market demand curve is obtained from individual demand curve?
3. Show with the help of a diagram that elasticity of demand is different at different
points of demand curve and flatter demand curves are more elastic than steeper
curves?
4. How can the price elasticity of demand be measured at a point on a normal demand
curve?
5. Mention the exceptions to the law of demand.
6. Differentiate between change in demand and change in quantity demanded.
7. Write down the range of values of income elasticity of demand in case of (i) inferior
good s(ii) normal goods(iii)luxury goods.
8. Why does a demand curve have negative slope?
9. Distinguish between movement along the supply curve and shifts of supply curve.

UNIT 3: Theory of Consumer Behaviour

Short Questions (2 Marks)

1. What do you mean by Consumer Surplus?

2. What is the value of marginal utility when total utility become maximum?
3. State two conditions of consumers equilibrium.
4. Is income effect positive for every good?
5. State the features of indifference curve.
6. What is an inferior good?
7. Are al inferior goods called giffen good?
8. What is Marginal Rate of Substitution?
9. Sate the law of equi-marginal utility?

Medium Questions (4 Marks)

1. Indifference Curves are negatively sloped explain.

2. Indifference curves are convex to the origin justify.
3. Two indifference curves cant intersect each other-explain.
4. Distinguish between shift of budget line and change in the slope of budget line.
5. Derive demand curve from price consumption curve.
6. Derive Engel Curve.
7. Show that both the commodities cant be simultaneously inferior.
8. What would be the shape of income consumption curve if one of the two goods is
inferior?

Long Questions (8 Marks)

1. Explain the concept of consumers equilibrium.

2. Decompose price effect into income effect and substitution effect.
UNIT-4 Theory of Production

Short Questions (2 marks)

1. What do you mean by production Function?

2. What do you mean by the law of returns to a variable factor?
3. What is meant byReturns to Scale.
4. What is internal economy of a firm?
5. Differentiate between short-run and long run in products.
6. Define average product and marginal product of a variable factor?
7. What is Marginal Rate of Technical Substitution?
8. What is ridge line?
9. What is iso-cost line?

Medium Questions (4 Marks)

1. State and explain different laws of returns to scale.

2. What do you mean by Expansion Path? Explain graphically.
3. Isoquants are negatively sloped and convex to the origin-explain
4. Differentiate between Returns to scale and Returns to a variable Factor.
5. Explain the concept of ridge lines.

Long Questions (8 Marks)

1. Explain the law of variable proportion.

2. Explain the concept of producers equilibrium where producer minimizes the cost of
production subject to a given output level.
3. Explain the concept of returns to scale by using the concept of expansion path

Unit 5:- Theory of Cost

Short Questions (2 Marks)

1. What is Opportunity Cost?

2. Draw the Average fixed cost curve of a firm and mention what its shape is?
3. What is the value of fixed cost in the long run?
4. Show that marginal variable cost and marginal cost in production will be identical.
5. Is it ever possible for the total cost curve to start from origin?
6. What is the relation between average cost and marginal cost when average cost is
minimum?

Medium Questions (4 Marks)

1. Prove that marginal cost depends only on variable cost.

2. Discuss the relation between average cost and marginal cost.
3. Discuss the relation between marginal cost and marginal product.
4. Explain the shape of average fixed cost of a firm.
5. Differentiate between fixed cost and Variable cost.
 6. Explain how the average cost and marginal cost can be derived from total cost.

Long Questions (8 Marks)

1. Why is short run average cost curve is U Shaped?

2. How you can derive long run average cost from short run average cost curves?

Unit 6 : Market Structure

1. What is the equilibrium condition of a firm under perfect competition?

2. Is monopoly price always greater than competitive price?
3. What is non price competition?
4. When is price discrimination possible?
5. What will be the shape of demand curve faced by a perfectly competitive market?
6. What is normal profit?
7. What is break even point?
8. wha is shut down point?
9. What is product differentiation?
10. What is the shape of average revenue and marginal revenue curve of a monopolist?

Medium Questions (4 Marks)

1. Explain the short run equilibrium of a perfectly competitive firm?

2. Explain the long run equilibrium of a perfectly competitive firm?
3. Derive the relation between average revenue ,marginal revenue and price elasticity of
demand,
4. Explain the short run equilibrium of a monopolist.
5. When is price discrimination possible and profitable?
6. Monopolist always produces with respect to the elastic portion
7. What do you mean by degree of monopoly power?
8. Monopolistic competition is a combination of perfect competition and monopoly ----
Explain.
9. Describe the features of oligopoly market.

Long Questions (8 marks)

1. Derive the short run Apply curve of a perfectly competition firm.

2. Derive industry supply curves for different cost conditions for a perfectly competition
firm.
3. Derive the equilibrium condition of a discriminating monopolist.
4. Compare between perfect completion and monopoly on the basis of their features.

UNIT-7 : Factor Pricing

Short Questions (2 Marks)

1. What is quasi rent?

2. What do you mean by VMP and MRP?
3. What is Liquidity Preference?
4. What do you mean by transfer earnings?
5. Differentiate between net interest and gross interest?
6. What is economic rent?
7. Differentiate between gross profit and net profit?
8. Differentiate between nominal interest and real interest.
9. Show that the rate of interest cant be equal to zero.
10. Is there any factor of production which can earn zero or negative income?

Medium Question (4 Marks)

1. Describe briefly the marginal productivity theory of distribution.

2. Discuss Ricardian theory of rent.
3. Discuss modern theory of rent.
4. Rent element exists in all other factor income Explain.
5. Distinguish between real wage and nominal wage Explain the process of collective
bargaining by trade union to raise wage rate and employment.
6. Explain back ward bending labor supply curve.
7. Differentiate between profit and other factor income.

Long Question (8 Marks)

1. Differentiate between Ricardian theory of rent and modern theory of rent.

2. Describe the loanable fund theory of interest rate determination.

MODULE II
UNIT I: (Indian Business Environment)

Short Questions (2 Marks)

1. What do you mean by Economic Development?

2. Indicate two features of underdeveloped economy.
3. What is economic growth?
4. State two difference between economic growth and economic development.

Medium Questions (5 Marks)

1. Differentiate between economic growth and economic development.

2. Indicate five features of underdeveloped country.
3. Explain the causes of describing Indian Economy as a developing economy.
4. Explain structural changes of Indian Economic during plan period.

UNIT II :Overview of Economic Trends

Short Questions (2 Marks)

1. How is circular flow of income measured?

2. What is National Income?
3. What is per capita income?
4. Distinguish between GDP and GNP.
5. What do you mean by structural changes in Indian Economy?
6. What is secondary sector?
7. What do you mean by Primary Sector of an economy?

Medium Questions (5 Marks)

1. Discuss production method in the context of national income accounting.

2. Discuss the trends of Indias per capital income during plan period.
3. Discuss the trends in Indias occupational structure during plan period.
4. Give a brief account of the trends in savings and investment in India during the plan
period.
5. Discuss the causes of low rate of capital formation in India.

Long Questions (10 Marks)

1. Discuss the trends in National Income and per capita income in India during plan
period.

UNIT III : Issues in Indian Economy

1. What do you mean by Vicious Circle of Poverty?

2. What is poverty line?
3. What is disguised unemployment?
4. What is seasonal unemployment?
5. What is inflation?
6. Define demand pull inflation.
7. What is Black Money?

Medium Questions (5 Marks)

1. Discuss the nature of inequalities of income distribution of India.

2. Explain the trends of inflation in India.
3. Discuss the causes of creation of black money in India.
4. Explain the causes of poverty in India.

Long Questions (10 Marks)

1. Discuss the causes of unemployment in India during plan period. Discuss its remedial
measures.
2. Discuss the causes of mass poverty and its remedial measures.
3. What are the causes and remedial measures against income inequality in India during
plan period?
4. Discuss the causes and remedial measures of inflation in India during plan period.
Unit 4 : Problems and of Indian Economics short Question (2 marks)

1. What is Operation Barga?

2. What are the functions of NARARD,
3. Mention two sources of instruction credit.
4. What do you mean by Green Revolution
5. What do you mean by rich industries?
6. What do you mean by Foreign Direct investment
7. What do you mean by Foreign Portfolio investment
8. What do you mean by disinvestment of public sector,
9. What do you mean by privatization of public sector industries?
10. What do you mean by TRIPS & TRIMS?

Medium Question (5 marks)

1. Discuss briefly the problems of rural credit in India.

2. Mark an assessment of industrial policy adopted in India in 1991.
3. Discuss the need for foreign capital in India.
4. Explain the possible effects of WTO on Indian economy.
5. Point out the difference between GATT and WTO.
6. Review the importance and need for public sector in India.

Long Question (10 marks)

1. Mention the causes of low productivity in Indian agriculture.

What Measures would you suggest to increase the agricultural productivity?

2. What are the major objectives of land reforms in India? Evaluate the progress of
land reforms in India.
3. Analyze critically the causes and consequences of green revolution in India.
4. Review the pattern of disinvestment in Indias public sector during the post reform
period.
5. Review the relation between export promotion and economic development of the
underdeveloped country.
6. Review export promotion V/S import substitution strategies of underdeveloped
countries.

Unit 5 ; Indian economic Planning

Short Question (2 marks)

1. What is economic planning?

2. Why is the Indian economy called a mixed economic?
3. India the year when India started her five year plan.
4. What do you mean by Plan Holiday?
5. Mention two features of Indian Economic planning?
Medium Questions (5 marks)

1. State the objectives of India Economic Planning.

2. Discuss the importance of planning in India.

Long Questions (10 marks)

1. State major objectives of economic planning in India.

2. State the achievements and failures on Indias Five year plan.