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net Second Year Model Question Paper 2010-2011 Prepared in the Cluster centre SGHSS Muthalakkodam on 24-11-2011 ECONOMICS Max.marks:80 Time: 2:1/2 hrs 1. Match column A with column Band C A Indifference curve Law of variable proportion Monopoly AFC B Short run Ratio of TFC to q Convex No substitutes C Price maker Diminishing marginal rate Of substitution Variable factors Rectangular hyperbola 4marks

2. Provide appropriate term (a) Counting the value of intermediate goods and final goods in the calculation of national income (b) The selling of goods by the domestic country to the rest of the world 2marks 3. What is a production possibility frontier? 1marks 4Explain the functions of a commercial bank ? 3marks 5. Consider the demand for a good. At price Rs4 the demand for the good is 25 units. Suppose price of the good increases to Rs 5 and as a result the demand for the good falls to 20 units . Calculate price elasticity? 3marks 6. What is transaction demand for money? How is it related to the value of transactions over a specified period of time? 4marks 7. State and explain the law of variable proportions with the help of TP, AP and MP curves? 6marks 8. What is marginal propensity to consume ? How is it related to the marginal propensity to save? 3marks 9. The following table shows the average product of schedule of labour. Find the total product and marginal product schedules ? It is given that total product is zero at zero level of labour employment. L APL 1 2 2 3 3 4. 4 4.25 5 4 6 3.5

( Word to PDF Converter - Unregistered ) http://www.Word-to-PDF-Converter.net 4marks 10.Explain the instruments used by the Reserve Bank of India as part of its monetary policy ? 8marks 11. Complete the following table Demand Perfectly elastic Perfectly inelastic Unit elastic Relatively elastic Shape of demand curve Value of price elasticity

4marks 12. Explain why the tax multiplier is smaller in value than the govt. expenditure multiplier ? 4marks 13.How is the exchange rate determined under a flexible exchange rate regime ? 4marks 14. Explain the short run equilibrium of a monopoly firm with the help of TC and TR curves when there is a positive cost ? 8marks 15. Pick the odd one out and justify your answer ? (a) Total product, Average product, total revenue, marginal product (b) Medium of exchange , unit of account, store of value, velocity of circulation 2marks 16. State three conditions of profit maximization of firm in a perfectly competitive market ? 3marks 17Graphically show that short run supply curve of firm in a perfectly competitive market is the part of SMC above AVC? 4marks 18. Prepare a seminar report on the value added method of measuring National Income? 6marks 19. Show graphically the impact of government imposed price ceiling on consumers of the product ? 2marks 20 Distinguish between revenue expenditure and capital expenditure? 2marks 21.Complete the following equation AD = ---+ ----+ ---1marks