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“In the post-reform period, the Government of India decided to retain profit-making Public Sector Undertakings (PSUs). It provided a special status to PSUs to enable them to expand in the global market.”
Do you agree with the given statement? Give valid reasons in support of your answer.
Concept: Components of New Economic Policy >> Privatisation
X and Y are complementary goods. The price of Y falls. Explain the chain of effects of this change in the market of X.
Concept: Equilibrium Price
Explain the chain of an effect of excess demand of a good on it equilibrium price.
Concept: Equilibrium Price
What is meant by 'excess supply' of a good in a market?
Concept: Market Equilibrium
Explain its chain of effects on the market of that good. Use diagram
Concept: Market Equilibrium
Equilibrium price of an essential medicine is too high. Explain what possible steps can be taken to bring down the equilibrium price but only through the market forces. Also explain the series of changes that will occur in the market.
Concept: Equilibrium Price
Distinguish between revenue receipts and capital receipts. Give an example of each.
Concept: Aggregate Demand and Its Components >> Investment
Explain the implications of large number of sellers in a perfectly competitive market.
Concept: Imperfect Competition
Explain why there are only a few firms in an oligopoly market.
Concept: Imperfect Competition
When is a firm called ‘price-taker’?
Concept: Price Ceiling
Draw average revenue and marginal revenue curves in a single diagram of a firm which can sell more units of a good only by lowering the price of that good. Explain.
Concept: Market Equilibrium
Market for a good is in equilibrium. There is an ‘increase’ in demand for this good. Explain the chain of effects of this change. Use diagram.
Concept: Market Equilibrium
Given the following data, find the missing value of 'Government Final Consumption Expenditure' and 'Mixed Income of Self Employed'.
| S.No. | Particulars | Amount (In ₹ crores) |
| (i) | National Income | 71,000 |
| (ii) | Gross Domestic Capital Formation | 10,000 |
| (iii) | Government Final Consumption Expenditure | ? |
| (iv) | Mixed Income of Self Employed | ? |
| (v) | Net Factor Income from Abroad | 1,000 |
| (vi) | Net Indirect Taxes | 2,000 |
| (vii) | Profits | 1,200 |
| (viii) | Wages & Salaries | 15,000 |
| (ix) | Net Exports | 5,000 |
| (x) | Private Final Consumption Expenditure | 40,000 |
| (xi) | Consumption of Fixed Capital | 3,000 |
| (xii) | Operating Surplus | 30,000 |
Concept: Aggregate Demand and Its Components >> Consumption
Answer the following question.
Define Price Floor. State the likely consequence of this type of intervention by the government.
Concept: Price Floor
Answer the following question.
Explain the meaning and implications of the maximum price ceiling and minimum price ceiling.
Concept: Price Ceiling
State whether the following statement is true or false. Give reasons for your answer :
When the equilibrium price is greater than the market price there will be excess supply in the market.
Concept: Equilibrium Price
Answer the following question:
The market for a good is in equilibrium. How would an increase in an input price affect the equilibrium price and equilibrium quantity, keeping other factors constant? Explain using a diagram.
Concept: Equilibrium Price
State the meaning of the following:
Autonomous Consumption
Concept: Aggregate Demand and Its Components >> Consumption
‘As the income increases, people tend to save more’. Justify the given statement.
Concept: Determination of Income in Two-sector Model
Read the following statements carefully:
Statement 1: The consumption curve is an upward sloping straight line curve due to the direct relationship between income and consumption and the assumption of constant Marginal Propensity to Consume.
Statement 2: Aggregate Demand curve and Consumption curve are parallel to each other.
In the light of the given statements, choose the correct alternative from the following:
Concept: Aggregate Demand and Its Components >> Consumption
