Q.The slope of the _____ line measures the amount of change in good 2 required per unit of change in good 1 along the line.

Options:

1) Demand

2) Budget

3) Utility

4) Indifference

1) Demand

2) Budget

3) Utility

4) Indifference

If the price of an article decreases from Rs 8 to Rs 7.5, when quantity demanded increases from Q1 units to 225000 units, and if the price elasticity of demand is -2, what is the value of Q1?

Options:

1) 1,00,000 units

2) 2,00,000 units

3) 1,50,000 units

4) 50,000 units

1) 1,00,000 units

2) 2,00,000 units

3) 1,50,000 units

4) 50,000 units

If the price of an article increases from Rs 200 to Rs 240, when quantity demanded decreases from 1,000 units to 800 units. Find point elasticity of demand?

Options:

1) -1

2) 1

3) 0.8

4) -0.8

1) -1

2) 1

3) 0.8

4) -0.8

5 Degrees Of Price Elasticity Of Demand

Perfectly Elastic Demand (Ed=∞)

Relatively Elastic Demand (Ed > 1)

Relatively Inelastic Demand (Ed < 1)

Perfectly Inelastic Demand (Ed = 0)

Unitary Elastic Demand (Ed = 1)

Which of the following is true with respect to SMC (Short run marginal cost) and AVC (Average variable cost)?

Options:

1) AVC curve cuts the SMC curve from above at the maximum point of SMC.

2) SMC curve cuts the AVC curve from above at the maximum point of AVC.

3) AVC curve cuts the SMC curve from below at the minimum point of SMC curve.

4) SMC curve cuts the AVC curve from below at the minimum point of AVC.

1) AVC curve cuts the SMC curve from above at the maximum point of SMC.

2) SMC curve cuts the AVC curve from above at the maximum point of AVC.

3) AVC curve cuts the SMC curve from below at the minimum point of SMC curve.

4) SMC curve cuts the AVC curve from below at the minimum point of AVC.

Which of the following is true with respect to SMC (Short run marginal cost) and SAC (Short run Average cost)?

Options:

1) SMC curve cuts the SAC curve from above at the maximum point of SAC

2) SAC curve cuts the SMC curve from below at the minimum point of SMC

3) SAC curve cuts the SMC curve from above at the maximum point of SMC

4) SMC curve cuts the SAC curve from below at the minimum point of SAC

1) SMC curve cuts the SAC curve from above at the maximum point of SAC

2) SAC curve cuts the SMC curve from below at the minimum point of SMC

3) SAC curve cuts the SMC curve from above at the maximum point of SMC

4) SMC curve cuts the SAC curve from below at the minimum point of SAC

______ Ratio specifies the provision that banks must keep a fraction of their deposit with RBI.

Options:

1) Statutory Liquidity

2) Cash Reserve3) Reserve deposit

4) Currency deposit

1) Statutory Liquidity

2) Cash Reserve3) Reserve deposit

4) Currency deposit

_______ is the ratio which requires the banks to maintain a given fraction of their total demand and time deposits in the form of specified liquid assets.

Options:

1) Currency deposit

2) Cash Reserve

3) Statutory Liquidity

4) Reserve deposit

1) Currency deposit

2) Cash Reserve

3) Statutory Liquidity

4) Reserve deposit

Net National Product at market prices – (Indirect taxes – Subsidies) =

Options:

1) Gross National Product

2) Personal income

3) National Income

4) Personal Disposable Income

1) Gross National Product

2) Personal income

3) National Income

4) Personal Disposable Income

Net National Product at market prices – Net indirect taxes =

Options:

1) Net National Product at factor cost

2) Gross Domestic Product

3) Gross National Product

4) Personal income

1) Net National Product at factor cost

2) Gross Domestic Product

3) Gross National Product

4) Personal income

The line consisting of all the bundles which cost exactly equal to the consumer's income is called the ______ line.

Options:

1) Demand

2) Utility

3) Budget

4) Indifference

1) Demand

2) Utility

3) Budget

4) Indifference

**EXPECTED QUESTIONS**

What are the two types of taxes?

a) Direct Taxes: Income Tax, Interest Tax, Wealth Tax

b) Indirect Taxes: Customs duties, Excise duties, Sales Tax, GST

a) Direct Taxes: Income Tax, Interest Tax, Wealth Tax

b) Indirect Taxes: Customs duties, Excise duties, Sales Tax, GST

Real GDP: (Nominal GDP/GDP Deflator)*100

**IMPORTANT ABBREVIATIONS**
GDP = GNP - NFIA

GNP = GDP + Net Factor Income from Abroad (NFIA)

NDP = GDP - Total Capital Depreciation

NNP = GNP - Total Capital Depreciation

PI = National Income- Social Security Contributions – Corporate Income Taxes – Undistributed Corporate Profits + Transfer Payments

Disposable Income = Personal Income – Personal Taxes

Average Total Cost (ATC) = Total Cost / Q (Output is quantity produced or ‘Q’)

Average Variable Cost (AVC) = Total Variable Cost / Q

Average Fixed Cost (AFC) = ATC – AVC

Total Cost (TC) = (AVC + AFC) X Output (Which is Q)

Total Variable Cost (TVC) = AVC X Output

Total Fixed Cost (TFC) = TC – TVC

Marginal Cost (MC) = Change in Total Costs / Change in Output

Marginal Product (MP) = Change in Total Product / Change in Variable Factor

Marginal Revenue (MR) = Change in Total Revenue / Change in Q

Total Revenue (TR) = Price X Quantity

Average Revenue (AR) = TR / Output

Total Product (TP) = Average Product X Variable Factor

Economic Profit = TR – TC > 0