Model Questions – Economics XII
Practice Set I (HISSAN – 2074)
Subject code: 226 “M3”
Time: 3 hrs Full Marks: 100
Part A: Microeconomics (50 Marks)
Group A1 (Long Answer Questions)
Answer any two questions. 2×10 = 20
- What is price elasticity of demand? Explain its various types. (3+7)
- Explain the law of substitution in detail. (10)
- Define monopoly market. How are equilibrium output and price determined under it in the short run? (2+8)
Group A2 (Short Answer Questions)
Answer any four questions. 4×5 = 20
- Describe the wage fund theory of wage.
- How is price elasticity of demand measured by point method?
- Explain the concept of consumer’s surplus
- Explain the relationship between total product (TP), average product (AP) and marginal product (MP) of labour as per the law of variable proportion.
- Derive short-run total fixed cost (TFC), total variable cost (TVC) and total cost (TC) curves.
Group A3 (Very Short Answer Questions)
Answer all the questions 5×2= 10
- Distinguish between gross interest and net interest
- Define total revenue (TR) and marginal revenue (MR) of a business firm
- What is a short-run production function?
- Define income elasticity of demand
- List four features of perfect competition market
Part B: Macroeconomics
Group B1 (Long Answer Questions)
Answer any two questions 2×10 = 20
- Define gross domestic product (GDP), gross national product (GNP) and net national product (NNP). Explain the various difficulties of national income accounting.
- What is a commercial bank? Explain its various functions.
- Define indirect tax? Explain its merits and demerits.
Group B2: (Short Answer Questions)
Answer any four questions 4×5 = 20
- Give your arguments in favour of protectionist trade policy
- Describe the sources of government borrowing
- Define inflation. What are the consequences of high inflation?
- Explain the expenditure method of national income accounting.
- Clarify the meaning of closed and open economy
Group B3 (Very Short Answer Questions)
Answer all the questions. 5×2 = 10
- How are the balance of payments (BOP) and balance of trade (BoT) different?
- What is the government budget?
- Mention four importance of the banking system.
- Point out four functions of money.
- State the meaning of the trade cycle.
Practice Set II (HISSAN 2074)
Subject code: 226 “M4
Time: 3 hrs Full marks: 100
Part A: Microeconomics (50 marks)
Group A1 (Long Answer Questions)
Answer any two questions. 2×10 = 20
- Define price elasticity of demand. How can it be measured by total outlay method?
- Critically explain the law of diminishing marginal utility
- Define perfect competition market. How are equilibrium price and output determined under it in the short run?
Group A2: (Short Answer Questions)
Answer any four questions. 4×5 = 20
- Explain the classical theory of interest.
- Explain the relationship between average cost (AC) and marginal cost (MC)
- Define returns to scale. Describe increasing returns to scale (IRS).
- Explain the importance of the concept of consumer’s surplus
- Explain the types of income elasticity of demand.
Group A3 (Very Short Answer Questions)
Answer all the questions. 5×2=10
- Define cross-elasticity of demand
- What are total cost (TC) and marginal cost (MC) of a business firm?
- What is a long-run production function?
- Define money wage and real wage
- Distinguish between firm and industry
Part B: Macroeconomics
Group B1 (Long Answer Questions)
Answer any two questions. 2×10 = 20
- Critically explain Fisher’s Quantity Theory of Money
- What is central bank? Explain its various functions
- What is direct tax? Explain its merits and demerits.
Group B2: (Short Answer Questions)
Answer any four questions. 4×5 =20
- Describe the difficulties in the measurement of national income.
- Briefly explain the functions of money.
- Describe the problems of Nepal’s foreign trade.
- Explain the processes of budget formulation
- What types of economies are called closed and open economies?
Group B3 (Very Short Answer Questions)
Answer all the questions. 5×2 =10
- Distinguish between nominal (current price) GDP and real (constant price) GDP.
- Define inflation
- Define money market and capital market.
- How is government expenditure classified in Nepal?
- List the objectives of World Trade Organization (WTO).
Practice Set III (HISSAN 2075) Subject code: 226 ‘MI’
Time: 3 hrs Full marks: 100
Part A: Microeconomics
Group A1: (Long Answer Questions)
Answer any two questions. 2×10 = 20
- Explain the law of substitution in detail.
- What is perfect competition? How are equilibrium price and output determined under it? [2+8]
- Critically explain the Ricardian theory of rent.
Group A2: (Short Answer Questions)
Answer any four questions. 4×5 =20
- Explain the types of price elasticity of demand
- What is returns to scale? Explain the concept of increasing returns to scale.
- Derive AR and MR from TR under monopoly market.
- Explain the wage fund theory of wages.
- What are the criticisms of consumer’s surplus?
Group A3 (Very Short Answer Questions)
Answer all the questions. 5×2=10
- Define price elasticity of supply
- Define total utility (TU) and marginal utility (MU).
- What is production function?
- Distinguish between fixed cost and variable cost.
- Why is the firm in monopoly said to be a price maker?
Part B: Macroeconomics
Group B1: (Long Answer Questions)
Answer any two questions. 2×10= 20
- Explain the Fisher’s quantity theory of money. What are its criticism?
- Define national income. Explain the expenditure method of national income accounting.
- Explain the characteristics of good tax system.
Group B2 (Short Answer Questions)
Answer any four questions. 4×5 =20
- What are the advantages of free trade?
- Describe the process of budget formulation.
- Explain the importance of banking system.
- Briefly explain the functions of money.
- What are the difficulties of national income
Group B3 (Very Short Questions)
Answer all the questions.
- What is closed economy?
- Define GNP (Gross National Product).
- List any four consequences of high inflation.
- Define direct tax and indirect tax.
- Give the meaning of balance of payment.
Practice Set IV (HISSAN 2075)
Subject code: 226 ‘M2
Full marks: 100 Time: 3 hrs Part A: Microeconomics
Group A1 (Long Answer Questions)
Answer any two questions. 2×10=20
- Explain the law of diminishing marginal utility. What are its exceptions?
- Define monopoly market. How are equilibrium price and output determined under it.
- Critically explain the classically theory of interest.
Group A2 (Short Answer Questions)
Answer any four questions. 4×5 =20
- Explain the types of income elasticity of demand.
- What is returns to scale? Explain the concept of constant returns to scale.
- Define and derive all short-run total cost curves.
- Explain the uncertainty bearing theory of profit
- Explain the relation between AC and MC
Group A3 (Very Short Answer Questions)
Answer all the questions. 5×2 =10
- List any four determinants of price elasticity of demand.
- What is consumer’s surplus?
- Define total product (TP) and marginal product (MP).
- What is short run cost?
- Distinguish between perfect competition and monopoly markets.
Part B: Macroeconomics
Group B1 (Long Answer Questions)
Answer any two questions. 2×10=20
- Define central bank. Explain the various functions of central bank.
- What is national income? Explain the income method of national income accounting.
- Explain the comparative cost theory of international trade.
Group B2 (Short Answer Questions)
Answer any four questions 4×5 =20
- What are the disadvantages of free trade?
- Describe the sources of government borrowing.
- Distinguish between money market and capital market.
- Explain the concept of demand-pull inflation.
- Describe the difficulties in the measurement of national income.
Group B3 (Very Short Answer Questions)
Answer all the questions. 5×2=10
- Define open economy.
- What is GDP (Gross Domestic Product)?
- List any four difficulties of barter system.
- Define progressive tax and proportional tax.
- What is balance of payment?
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