HIGHER SECONDARY MODEL EXAMINATION- FEBRUARY 2011

HSE II

Part III

ECONOMICS
Maximum: 80 Scores Cool-off Time: 15 Minutes 1. ConnectcolumnsB,C,DwithA A a) Monopoly B TC/QTVC/Q C D Time: 2 Hours

Zerowhenoutputiszero Unitaryelastic TRmaximum P=AC TFC/Q Normalprofit AFC Rawmaterials 4Score

b) RectangularHyperbola TCTFC c) Variablelost d) Breakevenpoints MR=0 TR=TC

2.

Completethefollowing a) NDPFC b) GVAFC c) M3 = + + M1 ________________ =GDPFC _________________ =GVAMP + + _____________ _________________ =1 2Score

d) C/Y 3.

ClassifythefollowingstatementsunderthetwobranchesofEconomicsandjustifyyouranswer a. Theownerofasugarfactoryannouncesincreaseinwagesofworkers b. Thecentralgovernmentannouncesnewexportimportpolicy c. Decreaseintheproductionofvegetableleadtotheincreasetheirpriceinthemarket d. RBIannouncedanincreaseinthevalueofCashReserveRatio 4Score

4.

Aconsumerbudgetequationisgiven 4x+5y=20 a) Constructthebudgetlinebasedontheaboveequation b) WritethenewbudgetequationwhenthepriceofgoodxfallsbyRs.2 c) Drawthenewbudgetline 3Score

5.

PrepareaseminarreportontheinstrumentsofmonetarypolicyofRBI.Thereportshouldhave a) Title b)Introductionc)Themainpointsintheseminarpaperd)conclusionwithown 6Score

observation 6. d1(P) d2(P)

Demandfunctionofacommoditybytwoconsumersaregivenas =20P0<P<20 =302P0<P<15 4Score

Constructthedemandscheduleanddemandcurvewhenpricevariesfrom0to20 7.

Thefactorsaffectingdeterminationofequilibriumincomeisdifferentinclosedeconomyandopen

economy I. GivenMPS=0.2andgovernmentincreasedexpenditurebyRs.500crores.Findoutequilibriumincome when, a) GovernmentimposesLumpsumTax b) GovernmentimposesproportionalTaxby25%ofincome II. Given Consumption(C) =100+0.8y

Import(M)= 200+.2y Governmentspending =500crores Lumpsumtax =150crores Transferpayment=250crores Export =400crores Autonomousinvestment=300 Findout a) Multiplierforclosedeconomyandopeneconomy b) Equilibriumincomeinopeneconomy 8. 8Score

DeficitbudgetissuitableforthedevelopingcountrieslikeIndia.Doyouagreewiththisstatement? 3Score

Substantiateyouranswer 9.

Rewritethestatementsifnecessary a) Theliabilityandburdenofindirecttaxfallsonthesameperson b) Theminimumpricesetbythegovernmentisknownaspriceceiling c) Thevalueofexportandimportofvisibleandinvisiblegoodsisknownasbalanceoftrade d) Unilateralpaymentswithoutreciprocityisknownastransferpayments 4Score

10.

Calculatenationalincomefromthefollowingdata Rs.(incrores) 10,000 1500 500 200 100 800 2000 4Score

Items Sales

Changeininventory NIFA Subsidies Indirecttax Depreciation

Intermediateconsumption 11.

ThefollowingpictureshowsPPCofaneconomy.analyzethepictureandanswerthefollowing

a) Identifythepointsa,b,c b) Suggestanytwomeasuretomovefrombtoc 2Score 12. Mathewisafarmerwhowishestoincreaseproductionofpaddybyincreasingtheno.oflaborsonly

.Butafteraparticularstageofproductionhebecamedisappointed.Why?Brieflymentionthelawrelatedto thissituation 13. 2Score

AtthemarketpriceofRs.10/afirmsupplies4unitsofoutput.ThemarketpriceincreasestoRs.30.

Thepriceelasticityofthefirmssupplyis1.25.whatquantitywillthefirmsupplyatthenewprice 3Score

14.

Completethefollowing Perfect competition Monopoly monopolistic competition oligopoly

Features

a. No.ofsellers b. Shapeofdemandcurve c. Freedomofentry&exit d. Conditionsofequilibrium 15.

4Score

Provideappropriateterms a. Theno.oftimeaunitofmoneychangeshandsduringtheunitperiod b. Thewearandtearofacapitalasset c. TheratioofnominalGDPtorealGDP d. Thetotalliabilityofmonetaryauthorityofaneconomy 4Score

16. Identifythecurvesintheshortrunperiod

Cost Output 17. 2Score

Theequilibriumpriceunderperfectcompetitiondetermineatthepointwherequantitydemandedis

equaltoquantitysupplied.DuetounexpectedheavyrainfallinTamilNadu,productionofvegetablesfell down.Showwiththehelpofdiagramtheeffectoffallinproductionofvegetablesonequilibriumpriceand quantity 18. a)Showgraphicallytheeffectofincreaseinautonomousinvestmentonequilibriumoutputinthe economy b)Statetheconditionforequilibriumoutputinthetwosectormacroeconomicmodel4Score 3Score

19. Thefollowingtablegivesthetotalcostscheduleofafirm.Itisalsogiventhattheaveragefixedcostat 5unitsofoutputisRs.6/.findoutTVC,TFC,AVC,AFC,SAC,SMCscheduleofthefirmforthe correspondingvaluesofoutput.AlsodrawtheAFCandTFC Q TC 1 50 2 65 3 75 4 95 5 130 6 185 8Score 20. Q P TC Calculatethefollowing a) TheMRandMCschedule b) ThequantityforwhichMR&MCareequal c) Theequilibriumquantityandequilibriumprice d) TR,TC,Totalprofitinequilibrium 4Score Themarketdemandcurveforacommodityandtotalcostforamonopolyfirmisgiven 0 52 10 1 44 60 2 37 90 3 31 100 4 26 102 5 22 105 6 19 109 7 16 115 8 13 125

21.SupposethepriceofamobilephoneisRs.3000inIndiaandthesamephoneispriced$50inUS.Then whatshouldbetherateofexchangebetweenrupeeanddollartobringpurchasingpowerparityin bothcountriesforthemobilephone.Alsocalculatethevalueofrealexchangerate PREPAREDBY: ALIV.P, MINIB. GHSSNeduveli,Trivandrum(1010) RKDNSSHSSSasthamangalam,Trivandrum 2Score

SREEDEVIM, Govt.TamilVHSS,Chalai,Trivandrum SUPRIYAGO, Govt.TAMILVHSS,Chalai,Trivandrum SAJIMOLS, OurLadyOfMercy,Puthukurichal,Trivandrum