A Consumer consumes only two goods X and Y. Marginal utilities of X and Y is 4 and 5 respectively. The prices of X and Y are Rs 4 per unit and Rs 5 per unit respectively. Is the consumer in equilibrium? What will be the further reaction of the consumer? Explain.
Concept: Consumer's Equilibrium
Define production function.
Concept: Production Function
A consumer consumes only two goods A and B and is in equilibrium. Show that when price of good B falls, demand for B rises. Answer this question with the help of utility analysis
Concept: Consumer's Equilibrium
What is government budget?
Concept: Meaning of Government Budget
Given consumption curve, derive saving curve and state the steps taken in the process of derivation. Use Diagram.
Concept: Concept of Aggregate Demand and Aggregate Supply
Find national income and private income:
(Rs crore)
(i) Wages and salaries 1,000
(ii) Net current transfer to abroad 20
(iii) Net factor income paid to abroad 10
(iv) Profit 400
(v) National debt interest 120
(vi) Social security contributions by employers 100
(vii) Current transfers from government 60
(viii) National income accruing to government 150
(ix) Rent 200
(x) Interest 300
(xi) Royalty 50
Concept: Concept of National Income
Explain national income equilibrium through aggregate demand and aggregate supply. Use diagram. Also explain the changes that take place in an economy when the economy is not in equilibrium
Concept: Concept of Aggregate Demand and Aggregate Supply
Given the price of a good, how does a consumer decide as to how much of the good to buy?
Concept: Consumer's Equilibrium
C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure is 1.100. Calculate
(i) Equilibrium level of National Income.
(ii) Consumption expenditure at equilibrium level of national income.
Concept: Concept of National Income
Calculate National Income from the following data:
| S.No. | Particulars | Rs.in crores |
| (i) | Private final consumption expenditure | 900 |
| (ii) | Profit | 100 |
| (iii) | Government final consumption expenditure | 400 |
| (iv) | Net indirect taxes | 100 |
| (v) | Gross domestic capital formation | 250 |
| (vi) | Change in stock | 50 |
| (vii) | Net factor income from abroad | (-)40 |
| (viii) | Consumption of fixed capital | 20 |
| (ix) | Net imports | 30 |
Concept: Concept of National Income
Find national income from the following:
Autonomous consumption = Rs100
Marginal propensity to consume = 0.80
Investment = Rs 50
Concept: Concept of National Income
Giving reason explain how should the following be treated in estimating national income:
i. Expenditure on fertilizers by a farmer.
ii. Purchase of tractor by a farmer.
Concept: Concept of National Income
Explain the concept of 'excess demand' in macroeconomics. Also explain the role of 'open market operation' in correcting it.
Concept: Concept of Aggregate Demand and Aggregate Supply
Explain the concept of 'deficient demand' in macroeconomics.
Concept: Concept of Aggregate Demand and Aggregate Supply
Explain the distinction between autonomous and accommodating transactions in balance of payments. Also explain the concept of balance of payments 'deficit' in this context
Concept: Concept of Balance of Payments Account
National income is the sum of factor incomes accruing to : (Choose the correct alternative)
(a) Nationals
(b) Economic territory
(c) Residents
(d) Both residents and non-residents
Concept: Concept of National Income
Foreign exchange transactions which are independent of other transactions in the Balance of Payments Account are called ______.
Concept: Concept of Balance of Payments Account
What is aggregate demand?
Concept: Concept of Aggregate Demand and Aggregate Supply
State components of Aggregate demand ?
Concept: Concept of Aggregate Demand and Aggregate Supply
Indian investors lend abroad. Answer the following questions :
(a) In which sub-account and on which side of the Balance of Payments Account such lending is recorded? Give reasons.
(b) Explain the impact of the lending on market exchange rate.
Concept: Concept of Balance of Payments Account
