# AHSEC Question Papers: Economics' 2019 2019
ECONOMICS
Full Marks: 100
Pass Marks: 30
Time: Three hours
The figures in the margin indicate full marks for the questions
PART – A
1. (a) Define the term scarcity as used in economics.        1
(b) What is opportunity cost?         1
(c) If marginal utility of a commodity is higher than the price, then the consumer will buy more of the commodity. (Write true or false)      1
(d) What will be the effect of price change on supply of a commodity with perfectly inelastic supply? 1
(e) How will an increase in the price of inputs shift the supply curve?  1
(f) What is shut-down price?  1
2. Why the production possibility curve slopes downward from left to right? 2
3. Give two reasons of a leftward shift in the demand curve.  2
4. The price elasticity of demand of a commodity is 4 and the percentage change in price is 8. Find the percentage change in the quantity demanded.  2
5. What is fixed factor? Give one example.          1+1=2
6. What is meant by inelastic supply? Draw a inelastic supply curve.          1+1=2
7. Mention two differences between monopoly and perfectly competitive market.  2
8. Distinguish between change in quantity demanded and change in demand.    4
9. Mention the relationship between total utility and marginal utility.      4
10. What is variable cost? Why the average variable cost (AVC) curve becomes U shaped?            1+3=4
11. The production function of a firm is Q=2L1/2 K2. Find the amount required of factor K is the firm wants to produce 200 units with available 16 units of factor L.
(Q=Output, K=Capital, L=Labour)
12. Mention the effects of the following on the supply of a commodity.                2+2=4
1)         Fall in the price of factors.
2)         Rise in the per unit tax.
13. Explain the Law of Variable Proportion with diagram.  6
Or
The total fixed cost of a firm is Rs. 200. Fill in the blanks of the following table.
 Output TC AC AVC MC 1 - - 100 - 2 460 - - - 3 - 250 - - 4 - - - 230

14. Explain the process of Long-run Equilibrium Price determination of perfectly competitive industry with diagram.       6
Or
Show the effects of change in demand of a commodity on equilibrium price, if   3+3=6
1)         The supply of a commodity is perfectly elastic.
2)         The supply of a commodity is perfectly inelastic.
PART – B
15. (a) In what circumstances, the GDP of an economy can be equal to GNP?      1
(b) What is transfer payment?             1
(c) What is voluntary unemployment?             1
(d) What is Break-Even Income?     1
(e) What is the full form of GST?         1
(f) What is zero primary deficit?          1
16. Mention two subject matters of Macroeconomics.      2
17. Mention any two types of leakages found in the Circular Flow of Income.      2
18. What is investment multiplier? Write the relationship between investment multiplier and MPC.   1+1=2
19. Mention the two primary functions of money.            2
20. Mention two differences between revenue receipts and capital receipts.     2
21. State two sources of supply of foreign currency.                        1+1=2
22. The value of MPC of an economy is 0.4. What amount of new investment is required to generate new income of Rs. 500 crore in the economy?  4
23. Explain any two fiscal measures to solve the problems of excess demand in an economy.      2+2=4
24. Mention four factors causing disequilibrium in Balance of Payment of a country.        4
25. Write down four differences between Direct Tax and Indirect Tax.    4
26. What is Budget Deficit? What are the three types of Budgetary Deficit?          1+3=4
27. Describe the Circular Flow of Income in a Three Sector Economy.       6
Or
Explain the Expenditure Method of calculating Gross Domestic Product (GDP).            6
28. Explain the process of credit creation by commercial banks. 6
Or
Describe the Quantitative method of adopted by the Central Bank to control credit created by commercial banks.  6

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