Q.1. A.
1.
Market demand is a total deman of all buyers.
2.
Perfectly inelastic demand curve is vertical
straight line parallel to ‘OY’ axis.
3.
Other factors remaining constant, when price
of a commodity raises there is extension of supply.
4.
National income is flow concept.
5.
Central bank is the apex body of the monetary
and banking system of the nation’s economy.
Q. 1. B.
a.
Adam Smith - (2) Father of
economics.
b.
Railway - (3) Public monopoly
c.
Legal tender money - (7)
Fiat money
d.
D-mat account - (5)
Buying and selling of shares.
e.
Bank rate - (6)
Quantitative tool of credit control.
Q. 1. C.
1.
Total
Revenue = Total quantiry x Price - True.
2.
Demand for necessary goods is inelastic -
True.
3.
Capital is a natural factor of production -
False.
4.
Consumption expenditure is the only component
of aggregate demand - False.
5.
Credit money is created by the central bank of
a country. - False
6.
Budget is a monthly statement - False.
Q. 2. A. Define
6. Bank Rate
Q. 2. B. Give Reason
1. Supply is directly related to price.
Ans. Meaning: -The law of supply establishes a
functional relationship between the price of a commodity and its quantity
supplied in the market.
Definition: -According to Marshall the law of supply is defined as” Other
thing being equal, the quantity of a commodity supplied is directly related to
its price”
In other words, more quantity of a commodity is
offered for sale at a higher price and less quantity is offered for sale at a
lower price. So supply of a commodity is directly related to its price.
Symbolically it can be stated as follows:
Sx = f (Px)
Where, S stands for supply, f stands for function
of, P stands for Price, x stands for a given commodity.
2. Price discrimination is possbile under monopoly.
Ans. This implies charging different prices for the
same product to different buyers. In monopoly the seller succeeds in increasing
his profit by adopting the technique of price discrimination.
(i) In a monopoly market, there is a single seller
or single producer. Therefore, the monopolist has no rivals and he faces no
competition. In a monopoly market, there are large number number of buyers and
they do not have any other substitute for the product produced by the
monopolist.
(ii) Under monopoly, the entry of other firms is
strictly restricted by natural, economi, technological or legal barriers.
Therefore, in monopoly, the monopolist can charge any price for his peoduct. He
can also charge different prices to different consumers for the same product.
Therefore, price discrimination is possible uner monopoly.
3. Labour cannot be stored.
Ans. Labour is perishable in nature. If a worker is
absent for a day, the days labour has gone. The amount of labour lost is lost
forever. Labour cannot be stored and used for future.
(i) Labourer and his labour (work) always go
together. Hence labourer must be present himself where he is supposed to render
his services.
(ii) Labour is perishable in nature. If a labourer
is absent for a day, his labour for that day goes wasted. Thus, the amount of
labour lost is lost forever, it cannot be used for future. Thus, labour cannot
be stoed and used for future.
4. Macro economics is the study of aggregates.
Ans. The term Macro is derived from Greek word
“Makros” which means large. It is the branch of economics, which studies the
behaviour of all economics units combined together. Macroeconomics is a study
of aggregates. It is the study of the economic system as a whole. Therefore, it
is also called as Aggregate Economics.
Definition: -“Macroeconomics deals not with
individual quantities as such, but with aggregates of these quantities; not
with individual incomes but with the national incomes; not with individual
prices but with the price level; not with individual outputs but with the national
output’. Defined by (Kenneth E. Boulding)
5. Cash reserve ratio (CRR) affects the lending
capacity of banks.
Ans. By the Banking Act, commercial banks have to
maintain a certain percent (3 percent to 15 percent) of cash with Central bank
(RBI) as reserves against their demand and time deposits. This amount cannot be
used by banks for lending activities.
If the CRR is increased the amount available for
lending gets reduced and vice versa. Thus, the CRR affects the lending capacity
of the banks.
6. Microeconomics deals with allocation of
resources.
Ans. Microeconomics is concerned with the study of
economic behavious of small individual economic units of an economy. Resources
allocation means utilisation of resources for the production of various goods
and services. The study of microeconomics is maily confined to resource
allocation.
Microeconomics explains how relative prices of
commodities and factors of production determine the allocation of resources.
Allocation or resources determines what goods are to be produced, how the goods
are to be produced and distributed, etc. Microeconomics also examines the
efficiency in the allocation of resources and economic welfare of society.
Q. 3. A. Distinguish between (Any Three)
1. Increase in demand and decrease in demand.
2. Partial equilibrium and General equilibrium.
3. Personal income and National Income
4. Standard coins and Token Coins.
5. Direct Tax and Indierct Tax.
6. Extension of supply and contraction of supply.
