1. The total cost at 5 units of output is Rs 30. The fixed cost is Rs 5. The average variable cost at 5 units of output is: (1) a) Rs 25 b ) RS 6 C) Rs 5 d) Re 1 2. What policy initiatives can the government undertake to increase the demand of milk in the country? Mention any one. (1) 3. Which of the shaded area in the diagrams below represent total utility? (1) Price Price Price Price Mu Mu Mu Mu Units Units Units Units Mu Consumed Mu Consumed Mu Consumed Mu Consumed (a) (b) (c) (d) For blind candidates: What does the area under the marginal utility curve depict? a) Average Utility b) Total Utility c) Indifference Curve d) Consumer equilibrium 4. Using a diagram explain what will happen to the PPC of Bihar if the river Kosi causes widespread floods? (3) For blind candidates: State two assumptions of a PPC. Explain what will happen to the PPC of the Bihar if the river Kosi causes widespread floods. 5. State the central problems of an economy. (3)10. 11. 12. 13. State whether the following statements are True or False. Justify your answer. (3) a) Average product rises only where marginal product rises. b) Total cost rises only when marginal cost rises. Explain the effects of a 'price ceiling'. (3) OR Explain the effects of a 'price floor'. Explain the implications of freedom of entry and exit of rms under perfect competition. {3) A good is an 'inferior' good for one and at the same time 'normal 'good for another consumer. Do you agree? Explain with the help of an example. (4) Explain why an indifference curve is convex to the origin? (4) OR A consumer consumes two goods X and Y. What will happen if MUx/ Px is greater than MUy/Py? Explain the condition of equilibrium of a rm based on marginal cost and marginal revenue. (6) What is meant by change in supply and change in quantity supplied? (6) The following headline appeared in the Hindustan Times on 2 August 2014: (6) "Crop damaged in Himachal sent tomato prices roaring in Delhi. \" Use a diagram and economic theory to analyse the statement. OR On 19 December 2013, the following news item was printed in the Economic Times: 28. a) What is meant by Cash reserve ratio? How does it increase the money supply in (3+3) b) The income level at which APS is negative For blind candidates: Explain the process of working of the 'investment multiplier' with the help of a numerical example. the economy? in the economy? b) What is meant by Open market operation? How does it reduce the money supply 29. Find (a) National Income and (b) Gross National Disposable Income. ii. iii. iv. vi. vii. viii. ix. x. xi. Rs Crore Net current transfer from abroad 5 Private nal consumption expenditure 200 Subsidies 20 Net domestic xed capital formation 40 Net factor income to abroad 10 Government nal consumption expenditure 50 Change in stock (-)10 Net imports (-)20 Consumption of xed capital 30 Indirect tax 60 Exports 100 OR Find (a) Private Income and (b) National Income. Personal disposable income Income from property and entrepreneurship accruing to the government administrative departments 350 50 (6)