Economics 2019 Delhi - Set 1

General Instructions:

1. All questions in both the sections are compulsory.
2. Marks for questions are indicated against each question.
3. Question Nos. 1 - 4 and 13 - 16 are very short-answer questions carrying 1 mark each. They are required to be answered in one sentence each.
4. Question Nos. 5 - 6 and 17 - 18 are short-answer questions carrying 3 marks each. Answers to them should normally not exceed 60 words each.
5. Question Nos. 7 - 9 and 19 - 21 are also short-answer questions carrying 4 marks each. Answers to them should normally not exceed 70 words each.
6. Question Nos. 10 - 12 and 22 - 24 are long-answer questions carrying 6 marks each. Answers to them should normally not exceed 100 words each.
7. Answers should be brief and to the point and the above word limits should be adhered to as far as possible.

Question 1

In the given figure, the movement on the production possibility curve from point A to point B shows _____. (Choose the correct alternative)

Good Y В O Good X

1. Growth of all the resources in the economy.

1. Underutilisation of resources.
2. Production of more units of Good X and less units of Good Y.

1. Production of more units of Good Y and less units of Good X.

SOLUTION:

In the given figure, the movement on the production possibility curve from point A to point B shows production of more units of good X and less units of Good Y.

Hence, the correct answer is option (C).

Question 2

Average fixed cost curve _____. (Choose the correct alternative)

1. is a straight line parallel to X-axis.
2. is straight line parallel to Y-axis.
3. falls, as more units are produced
4. rises, as more units are produced

OR

Which of the following formula is correct for calculating marginal cost? (Choose the correct alternative)

1. <math>MC_N = TFC_n - TFC_{N-1}</math>
2. <math>MC_N = AC_N - AC_{N-1}</math>
3. <math>MC_N = AVC_N - AVC_{n-1}</math>
4. <math>MC_N = TC_n - TC_{N-1}</math>

SOLUTION:

Average fixed cost curve falls as more units are produced. Hence, the correct answer is option (c).

OR

The correct formula of calculating marginal cost is <math>MC_n = TC_n - TC_{n-1}</math> Hence, the correct answer is option (D).

Question 3

The average product curve in the input-output plane, will be _____. (Choose the correct alternative)

1. an 'S' shaped curve
2. an inverse 'S' shaped curve
3. a 'U' shaped curve
4. an inverse 'U' shaped curve

SOLUTION:

The average product curve in the input-output plane, will be an inverse 'U' shaped curve.

Hence, the correct answer is option (D).

Question 4

If the market supply of a commodity X changes due to improvement in technology, the market supply curve will _____. (Fill up the blank)

OR

If the market supply of a commodity X changes due to rise in price of a factor input, the market supply curve will _____. (Fill up the blank)