112

Roll No…………………

Time allowed : 3 hours Maximum marks : 100

Total number of questions : 8 Total number of printed pages : 2

PART – A
(Answer Question No.1 which is compulsory
and any three of the rest from this part.)
1. (a) State, with reasons, whether the following statements are true or false :
(i) Elasticity of demand for salt is almost zero.
(ii) Substitution effect is always positive.
(iii) The average revenue curve of an individual firm under perfect
competition is a horizontal straight line.
(iv) Constant return to scale implies that an increase in the scale in
some proportion results into an increase in the output in the same
proportion.
(v) Fixed wage earners suffer both in inflation and deflation.
(3 marks each)
(b) Differentiate between ‘micro-economics’ and ‘macro-economics’. Are
they complementary to each other ?
(10 marks)

2. (a) With the help of suitable schedule and diagram, show the relationship
between total, fixed and variable costs in the short-run.
(7 marks)

(b) What is meant by ‘perfect competition’ ? State, with reasons, whether it is

attainable.
(8 marks)

3. (a) “Discriminating monopoly is profitable, if two markets have different

elasticity of demand.” Explain with the help of diagrams.
(7 marks)

(b) What is ‘national income’ ? Is it a reliable index of economic welfare ?

(8 marks)
4. (a) Give the statement of quantity theory of money. Explain it with the help
of Cambridge Equation.
(7 marks)

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(b) Briefly explain the following :

(i) Marginal propensity to consume.
(ii) Ill-effects of inflation.
(4 marks each)

5. (a) Discuss the merits and demerits of the Ricardian Theory of comparative
advantages.
(7 marks)

(b) What is meant by ‘exchange rate’ of currency ? How is its equilibrium

rate determined in the market ?
(8 marks)

PART – B
(Answer ANY TWO questions from this part.)

6. (a) Explain the role of government in infrastructure development.

(7 marks)

(b) Discuss the salient elements of business environment of a firm.

(8 marks)

7. (a) Write a detailed note on population growth in India.

(7 marks)

(b) What do you mean by ‘mixed economy’ ? Narrate the structure of mixed
economy of India.
(8 marks)

8. Write notes on any three of the following :

(i) Non-banking finance companies
(ii) Financial sector reforms
(iii) Government subsidies
(iv) Industrial sickness.
(5 marks each)

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2/2003/BEBE