I] PUC ECONOMICS QUESTION BANK 2019-20 INTRODUCTORY MICRO ECONOMICS AND MACRO ECONOMICS DEPARTMENT OF PUE MALLESHWARAM BENGALURU - 12 ee a a ry 1, FEATURES OF THE QUESTION BANK the Question Bank for Second Introductory Micro Economics - contains 6 chapters 2. Introductory Macro Economics - contains 6 chapters cs should be taught and then Introductory Macro luctory Micro Econo Informations or concepts given in boxes are also to be taught. The questions in the Question Bank are framed for all the chapters on the basis of two books. Following are the features of the Question Bank if 1. Multiple Choice Questions - each question carries one mark. 2. Fill in the blanks — each question carries one mark. 3. Match the following — five marks 4. Questions which are to be answered in a sentence/word — each question carries one mark 5. Questions which are to be answered in four sentences — each question carries two marks. ©. Questions which are to be answered in about twelve sentences each question carries four marks. 7. Questions which are to be answered in about twenty sentences — each question carries six marks. 2. Assignment and Project-oriented questions — each question carries five marks ‘Test, Mid-term and Annual Examination Question Papers should be based on this Question Bank the end of the Programme of Work, a Model Question Paper with Blue-print are given in Pi Question BankINSTRUCTIONS © to be followed while preparing a Question Paper (for 100 ‘consists of 5 parts — Part A, Part B, Part C, Part D and Part E. Part laper consists of Objective-type Questions as follows Questions ~ Total 5. Total S g- Total 5. answered in a word/sentence - Total 5. PartB answered in about 4 sentences ~ each question carries 2 marks. ‘answered - out of 14 Questions. PartC ‘answered in about 12 sentences ~ each question carries 4 marks. ‘answered - out of 11 Questions. “eats, Part D. each question carries 6 marks.it arries E mark) sect angwver (each questio Choose the . arces of an economy Nave Raa (b) Single usages (@) None of the above ) Unlimited us -cample of micro economic study? 2 Which of the following is an © (b) Consumer behaviour {@) National Income (@) Foreign trade ©) Unemploym at economy includes oblems of a c a) What to produce (b) How to produce (© For whom to produce (@) All of the above Traditionally, the subject matter of economics has been studied under the follow- ing broad branches. (@) Micro & Macro Economics (b) Positive & Normative (©) Deductive & Inductive (@) None of the above IL Fill in the blanks (each question carries 1 mark) Scarcity of resources gives raise to 2) ina centrally planned economy allimportant decisionsare made by a is set of arrangements where economic agents can freely exchange their endowments or products with each other. 4. In reality, all economies are __ TIL Match the following (each question carries | mark) A B |. Market economy a. Government 2. Service of a Teacher b, Private ownership 3. Centrally planned economy _—_¢. Skill 4. Positive economies 4. Evaluate the Mechanism (5) Normative economics ¢. Functioning of Mechanism ‘5. Write a short note on market econmd +1 mark rect answer (each question carrie (4) None of the above b) Concave to the o the consumer depend on (©) Price & Income (@) None of the above () M=Px,+Px @ Y=Mx+c (©) Giffen goods (8) None of the above () Perfectly inelastic tary Elastic (@) None of the above Utility analysis expresses utility in (0) Returns (©) Ranks (6) Awards 11. Fill in the blanks (each question carries 1 mark) Wan ing capacity of a commodity is wo indifference curves never each other income increases, the demand curve for normal goods shifts towards4. Th le demand for a good moves in the _ direction of its p zd direction of its price. )) Method of adding two individual demand curves called TI, Match the following (each question carries 1 mark) és : 1, Demand curve eats 2 Linear demand curve b. Down ward sloping 3. Unitary elaslicity of demand c. Pen & ink 4, Complementaty goods 4. Afamily of indifference curve 5. Indifference Map e. |ed|=1 IV. Answer the following questions in a sentence/word. (each question carries 1 mark) 1, What is budget line? ‘What do you mean by cardinal Utility Anlysis? Give the meaning of marginal utility? What is utility? ‘Expand MRS. 6 )What do you mean by Indifference curve? no mS 7. What is demand? ¥. Answer the following questions in 4 sentences. (each question carries 2 marks) 1, What are the differences between budget line & budget set? 2, What do you mean by inferior goods? Give example? what is monotonic preference? 4. State the law of demand, 5. Mention two different approaches which explain consumer behaviour. 6 )What do you mean by price elasticity of demand? VL Answer the following questions in 12 sentences. (each question carries 4 marks) |. Write the differences between Total utility & Marginal utility. _ 2 Bvolain the indifference map with a diagram. 3 ces explain the budget set with the help of a diagram. -xplain the derivation of slope of the budget line. 1J complements substitutes an J inferior 2004 5 Write the differe si olirecarny differ following questions mal and ences between Non 1 20 sentences. (each question Carries 6 Explain VIL. Answer the f jain the i! wi a table and dia: + aiminishing marginal witty with the help O° 8 plain the law of diminishing ma rai tne fees of inference curves with ne help of JaBrams D explain the features of indifferene G plain the optimal choice of consumer with the help ofa diagram along the demand curve ar sd shift in demand curve with the + Explain the movern help of two diagrams the help of diagrams. 5. Explain the market demand wi ies 5 marks) VIL Assignment and Project oriented Questions. (each question carri s.5 and the 1) A Consumer wants to consume two goods. The price of Bananas is R price of Mango is Rs.10. The consumer income is Rs.40. (a) How much Bananas can she consumes if she spend her entire income on that good? (b) How much Mangoes can she consumes if she spend her entire income on that g00d? (6) Is the slope of budget line downward or upward? (@) Are the bundles on the budget line equal to the consumer’s income or not? (e) If you want to have more of Bananas you have to give up Mangoes. Is it true? keCHAPTER - 3 X Choose the correct answer (each question carries 1 mark) 1) The Formula of production function is (@) q=f(L.K) (b) a= 4(p) © y=f@) (@) None of the above 2. Inthe short run, a firm (a) Can change all the inputs (b) Cannot vary all the inputs (©) Can keep the inputs fixed (@) None of the above 3. The change in output per unit of change in the input is called. (a) Marginal product (b) Average product (c) Total product (d) Product 4. Cobb - Douglas production function is (@ a=») ) a=.) © a= 4.x) @4-© aa. (a) TVC (b) TFC (c) TFC +TVC (@) AC+MC 1, Fill in the blanks (each question carries 1 mark) 1. In the long run, all inputs are is defined as the out put per unit of variable input 3. Marginal product and Average product curves are in shape 4, SMC curve cuts the AVC curve at the point of AVC curve from below. 5 is the set ofall possible combinations of the two inputs that yield the same maximum possible level of out put 9lowing (each quest s 1 mark) nestion carries Lm: Jing (each 4 TIL, Match the foll : A a, ATC/AC 1, CRS b, Long Run Average Cost 2. SAC C «¢, Short Run Average Cost LRAC Ge 4. Constant Returns to scale suc e. TC 1V, Answer the following questions in a sentence/word. (each question carries 1 mark) 1. What do you meant by Total product? 2. What is Average product? 3. Give the meaning of Marginal product. 4. Write the meaning of cost function of the firm. 5. Whatis total fixed cost 6. What is average fixed cost? V. Answer the following questions in 4 sentences. (each question carries 2 marks) (1) What is Isoquant? 2. Give the meaning of the concepts of short run and long run 3. Mention the types of Retums to scale. 2) Name the short run costs 5. What are long run costs? VL Answer the following questions in 12 sentences. (each question carries 4 marks) 1. Explain Isoquant with the help of the diagram. Q Explain TP, MP and AP with the examples. 3. Write a brief note on returns to scale, 4, Explain the long run costs 10shown in the following table. TFC is Rs. 100. Find SAC schedules of the firm.— * CHAPTER - 4 THE THEORY OF FIRM UNDER PERFECT COMPETATION 1, Choose the correct answer (each question carries 1 mark) 71) The product in « perfect competition are ~~ @) Hetrogenous (b) Homogeneous (©) Luxury (d) Necessary 2. The increase in total revenue for a unit increase in the output is (@) Marginal Revenue (b) Average Revenue (©) Total Revenue (d) Fixed Revenue 3. The firm’s profit is denoted by @r (b) A (@ @a 4. When the supply curve is verticle the elasticity of supply is @es=1 Wes>1 — ()es=0 @ x=0 ‘5. The revenue per unit of output of a firm is called as @) TR (b) MR (0) AR (d)None of the above IL Fill in the blanks (each question carries 1 mark) 1. Price taking behaviour is the single most distinguishing characteristic of Market. 3 a tax that the government imposes per unit sale of output For a price taking firm marginal revenue is equal to he point of minimum; el ‘questions in a sentence/word. (each question carries 1 ait ormiula to calculate average revenue aa meaning of super normal profit, ‘questions in 4 sentences. (each question carries 2 marks) ons needed for profit by a firm under perfect competition of price elasticity of supply and write its formula. 12 questions in 12 sentences. (each question carries 4 marks) e on profit maximisation of a firm under the following conditions with the help of a diagram enue of a firm under perfect competi- ilj i] i] CHAPTER - 5 L. Choose the correct answer (each question In perfect competition, buyers & sellers are (@) Price makers (b) Price takers (©) Price analysts (@) None of the above 2. Assituation where the plans of all consumers and firms in the market match. () Incquilibrium situation (©) Equilibrium situation (©) Maximisation situation (@ Partial Equilibrium situation 5. Asa result of increase in the number of firms there is an increase in supply, supply curve @) Shifts towards left (b) Shifts towards Right A, © Shifts towards Both sides (@ None of the above 4) The firms eam super normal profit as long as the price is greater than the mini- mum of (@) Manginal cost (b) Total cost (©) Average cost @ Fixed cost The government imposes upper limit on the price of goods and services is called (2) Price ceiling (b) Selling price (©) Price floor (A) None of the above 6. The government imposed lower limit on the price of goods and service is called (2) Goods floor (0) Service floor (©) Price floor (@) None of the above IL. Fill in the blanks (each question carries 1 mark) 1. In a perfectly competitive market, equilibrium occurs when market demand en market supply, 2, If the supply curve shifts rightward and demand curve shifts leftward equilibrium price will beCHAPTER - 6 er (each question carries 1 mark) hich produces heterogeneous products is called (b) Monopolistic competition i (@) None of the above -due to the sale of an additional unit is called ‘ (b) Average Revenue (d) Revenue elasticity of demand is more than one, MR has @ (b) Decreasing value (d) Positive value (b) TR-TC @ TRQ apoly firm is maxi-vs TV. Answer the following. questions in 4 sentences: (each question carries 2 marks) 1. State the meaning of average revere and marginal sree 2. State the relationship Hetween marginal revenue and roe elastici 3. Write the meaning ‘of monopolistic ‘competition and give an example. 4. Waite the features of monopoly , V. Answer the following questions in 12 sentences. (each question carries 4 marks) 1, Explain the market demand curve for @ monopoly firm with the hel 2 ‘Calculate TR and MR from the follwing table. fp 2p is fs | [s_[2 | tp Lroo}e0 [80 [70 [60 |50_ [40 [30 [20 | +3, Briefly explain the monopolistic competitive market, 4, Show the relationship between average revenue and ‘monopoly market with the help of diagrams. ‘5. Explain how the firms behave in oligopoly. VI. Answer the following questions in 20 sentences. (each question carries 6 ty of demand. p of a diagram Se marginal revenue of 2 pect ‘equilibrium of the monopolist with the case of zero cost. h run equilibrium of a monopolist firm, when the cost of produc- rit the help of o diagram. a ‘curve for a commodity and the total cost for a monopoly firm odity is given by the schedules below. Use the information toil ~ Answer the following questions in 4 sentences. (each question carrit ‘ach question carries 1 answer the following questions |" mark) Who are economic agents? ical school of thought say? What does Give the meaning of imports. "Name the well known work of Adam Smith What do you mean by wage ra ies 2 marks) What are the features of capitalistic economy? Name and write the meaning of two kinds of trade in external sector: ‘Who are the macro economic decision makers? » answer the following questions in 12 sentences. (each question carries 4 marks) Briefly explain in what way Macro Economics is different from Micro Economics. Explain the working of the economy of a capitalist country. Explain the role of the Government (State) and household sector in both developed and developing countries KECHAPTER - 2 1. Choose the correct answer (each question carries 1 mark) 1. The Study of National Income is relat (@) Micro economi (©) Both Micro & Macro 2. NNP=GNP- (@) Deduction (©) Depreciation (©) Investment (@ None of the above 3. The value of GDP at the current prevailing prices is (@) Real GDP (b) GDP at Factor cost (©) Nominal GDP (@ NDP 4, By deducting undistributed profit from national income, we get (a) Personal Disposable Income _(b) Personal Incom (©) Private income (@ Subsidies 5. Measuring the sum total of all factor payments will be called (2) Product method (©) expenditure method (©) Income method @ None of the above IL. Fill in the blanks (each question carries 1 mark) are defined at a particular point of time. ~ goods will not pass through any more stages of production. is an annual allowance for wear and tear of a capital good 4 isa stock variable 5. Pollution is an example for __ externalities 6. The net contribution made by a firm is called its_ IIL Match the following (each question carries 1 mark) A B 1. Labour a. Non - Monetany exchange 2. GDP b. Personal Disposable Income 3. Inventory ¢. Gross Domestic Product 4. PDI d. Stock variable 5. Domestic service e. Wages ae/word. (each question carries 1 1¥, Answer the following questions [9 sentenc mark) 1 What do you mean by final goods? 3. Expand GNPye- 4 How do you gt net value added? 'S. Give the meaning of GDP. 6. Give the meaning of Intermediate goods, 7, What is Depreciation? ‘8. How do we get personal Disposable income? 9. Write the equation of GVA at market prices, 10. What is GDP deflator? 'V. Answer the following questions in 4 sentences. (each questior ‘1. What are the four factors of production? ‘mention their rewards. 2. Distinguish between stock and flow. with the example. 3, What is the difference between consumer goods and capital goods? 4. Mention 3 Methods of measuring GDP (National Income). 'S. What do you mean by ‘externalities? Mention its two types. (6. Write the equation of GDP,,, and GDP,,.. 7. Wit the difference between nominal and real GDP. aoe the following reared (each question carries 4 marks) n carries 2 marks)‘ach question carries 1 TV. Answer the following questions in a sentence/word. (each quest mark) 1. What do youd mean by barter system 2. Give the meaning money 3. What is Time deposit? What is Fiat Money? Write the meaning of ‘High powered Money’ Expand CRR What is Bank Rate? Answer the following questions in 4 sentences. (each question carries 2 marks) Mention any two functions of money Give the meaning of CRR and SLR. State the credit control instruments of RBL Mention the two motives of demand for money. How does bank rate influence money supply? 6. What role of RBI is known as ‘Lender of Last Resort’ VL Answer the following questions in 12 sentences. (cach question carries 4 marks) 1. “Money acts as a convenient unit of account’. Explain this sentence with the example. Briefly explain the functions of RBI. Write a note on legal definitions of money. Write a brief note on Transactionary and Speculative motives of demand for money ea = VIL. Answer the following questions in 20 sentences. (each question carries 6 marks) Explain the functions of money and how does money overcome the short comings of barter system? 2. Write the story of Gold smith LaLa on the process of deposit and loan (credit) creation by commercial banks, Explain the open market operation. 4, Requirement of reserves acts as a limit to money (credit) creation, Explain VAL. Assignment and project oriented questions. (carries 5 marks) 1. Write a note on Demonetisation. see 4arries five marks) eons APC (Average Propensity 10 consume) 2 Raw material @) CHT +07 3. Consumption pe (¢) Intermediate good unit of income ee 4, Aggregate demand for (4) Leads to rise in the prices in the long final goods ¥-¢ $. Bxcess demand IV; Answer the following questions in a sentence/word. (each que mark) Write the meaning of autonomous consumption Give the meaning of Marginal propensity to save (MPS). Define Average Propensity to save (APS). Write the meaning of full employment level of income Mention two fiscal variables which influence aggregate demand Write the formula of MPC. ~ Amswer the following questions in 4 sentences. (each question carries 2 marks) Write the meaning of excess demand and deficient demand. Give the meaning of investment multiplier and write its formula. Give the meaning of Paradox of thrift. VL Answer the following questions in 12 sentences. (each question carries 4 marks) 1. Givethe meaning of Aggregate demand function. How can it be obtained graphically? 2. Briefly explain consumption function 3. Explain the investment function with the help of graphs. VIL Answer the following questions in 20 sentences. (each question carries 6 marks) 1. Explain the effect of an autonomous change in aggregate demand on income and ‘output 2. Explain the supply side of macroeconomic eq 3. Explain the multiplier mechanism, 4. Discuss the Paradox of thrift stion carries 1 +HCHAPTER - ‘the correct answer (cach question carries 1 mark) Taxes on Individual and firms are (b) Indirect Taxes: (@) Non Tax Revenues Datel Dayiedlon goods produced with in the country (b) Estate Duties (@) Customs duties gh acts as an automatic stabiliser (b) Income Tax (4) Proportional income Tax following is an example for ‘Paper taxes’, (b) Excise Taxes (©) Wealth Tax (@) Customs Taxes 5. When Demand exceeds the available output under conditions of hi ‘employment, this may give rise to (@) Inflation (b) Deflation (©) Stabilisation ——__ @) None of the above IL. Fill in the blanks (each question carries 1 mark) | 1 Non ol ane ns igh level of in India.‘S. What are Revenue receipts? 6 Wiite the meaning of capital receipts 7. Give the meaning of Revenue expenditure, 'S. Give the meaning of capital expenditure 9. Expand FRBMA- 10. Whatis primary deficit? TX. Answer the following questions in 4 sentences. (each question carries 2 marks) 1 Waite the difference between Public provision and Public production. 2. Who are “Free riders"? Why are they called so? 3. Distinguish between surplus budget and deficit budget. 4. Why public goods must be provided by the Government? S. Mention the non-tax revenues of the Central Goverment. ‘6. Why the proportional income tax acts as automatic stabiliser? _V. Answer the following questions in 12 sentences. (each question carries 4 marks) S. Write a: on the Ricardian equivalence VL Answer the following questions in 20 sentences. (each question carries 6 marks) 1. Explain the classification of receipts.(b) Output Market linkage 7 (@ None of the above determined by the market forces of demand and supply is called (b) Diny floating exchange rate @ None of the above ments (BOP) record these transactions between residents and ) Services (© Assets (d) All of the above price of one currency in terms of Foreign Currency is called (b) Interest Rate @ None of the above defined in terms of goldV. Pe ee es vu. 1 i) a b | % nswer the following questions in a sentence word. (each question carries 1 A the following questio sh ( stion Ci mark) What do you mean by open economy ‘What is Balance of payment? What is balance of trade? What do you mean by fixed exchange rate? Give the meaning of official reserve sale Give the meaning of managed floating, Answer the following questions in 4 sentences. (each question carries 2 marks) Mention the three linkages of open economy. What is the difference between current account and capital account? When do surplus and deficit arises in Capital Account? What are the types of balance of trade? Why do people demand foreign exchange? What is foreign exchange rate |. Answer the following questions in 12 sentences. (each question carries 4 marks) Write a note on balance of trade. Write the chart of components of Current account Write the chart of components of capital account. Briefly explain the effect of an increase in demand for imports in the foreign exchange market with the help of a diagram. Explain the merits and demerits of Flexible and fixed exchange rate system Answer the following questions in 20 sentences. (each question carries 6 marks) Write a note on balance of payment. Briefly explain the foreign exchange market with fixed exchange rates with the help of a diagram Write a short note on the gold standard. Assignment and project oriented questions. (carries 5 marks) ‘Name the currencies of any five countries of the following, USA, UK, Germany, Japan, China, Argentina, UAE, Bangladesh, Russia wane= Ts ‘suopsen yo sequinu je wor = TE “= LE MOE = bb st aBewiaoied 1201] v ir Tt T o i T [et TIT T T T T T T z T : T x Tv T|T T/T T T T T T T T zs ee el vd for|03/0s|osn|oajon}oa]os|osaloaJomi| ba Ds /OsAOd 031/03) os Lalas (ea “eyietu Z = DS SHUI T= DSA: suonsan jo adAl| Ts Nolwondd¥ lonianvisuaann} — 390 MONX = | ee SOINONODA DNd It ANIYd 318PRE UNIVERSITY EDUCATION DEPT. MODEL QUESTION PAPER 2019-20 ECONOMICS ‘Time : 3 Hours 1S minutes [Max. Marks ; 100] Instruction: 7. Write the question mmbers legibly in the margin. ; 2. Answer for a question should be continuous PART-A 1. Choose the correct answer: 1x5=5 4 1 The scarce resources of an economy have * (2) Competing usages (b) Single usages (©) Unlimited usages (@ None of the above ‘2. Central problems of an economy includes (b) How to produce @) Allof the above goods increases as income increase (b) Giffen goods (@) None of the above "a good or service is called