Download economics ( hsc practice questions)

ECONOMICS ( HSC PRACTICE QUESTIONS)
TEST NO 1
State giving reasons whether the following statements are true or false :1.
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Economics is a science of choice.
Micro economics studies factor pricing and product pricing.
Partial equilibrium analysis is different from general equilibrium analysis.
Micro economics differs from macro economics.
Micro economics has an important role to play in understanding the economic variables.
TEST NO 2
State giving reasons whether the following statements are true or false:1. Cardinal measurement of utility is an assumption to the law of DMU given by Dr. Alfred
Marshal.
2. TU increases at a diminishing rate.
3. Relationship between TU and MU can be explained by means of a schedule and a
diagram.
4. Concepts of intra marginal units , extra marginal units and marginal units explain the
relationship between MU and price.
5. MU curve slopes downwards.
6. There are no exceptions to the law of DMU.
7. Homogeneity condition is an assumption to the law of DMU.
8. Average Utility is TU/n.
9. Paradox of value is also called the water diamond paradox.
10. The Law of DMU is very important in the study of utility analysis.
11. Equi-marginal utility differs from the law of DMU.
12. When MU is zero TU is maximum.
TEST NO 3
State giving reasons whether the following statements are true or false:In Economics Demand means effective demand.
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Price is the only determinant of demand.
Demand curve is downwards sloping.
There is no difference between individual demand and market demand.
The law of demand is based on the ceteris paribus assumptions.
There are no exceptions to the law of demand.
Demand cure is always downwards sloping.
Increase is demand means extension of demand.
Decrease in demand means contraction of demand.
There are differences between variations in demand and shifts in demand.
Direct demand is derived demand.
Joint demand means composite demand.
TEST NO 4
State giving reasons whether the following statements are true or false:1. The degree of responsiveness of demand to the change in the price of the commodity is
called elasticity of demand.
2. Total expenditure method is also called the total outlay method.
3. Demand for life saving medicines is highly inelastic.
4. Demand for luxuries is elastic.
5. The concept of elasticity of demand has no significance.
6. There are different types of price elasticities of demand.
7. There are different methods of measuring elasticity of demand.
8. There are many factors influencing elasticity of demand.
9. The demand for necessary goods is inelastic.
10. Distinction bet:
1. Income elasticity and cross elasticity
2. Elastic demand and inelastic demand
3. Relatively elastic demand and relatively inelastic demand
4. Perfectly elastic demand and perfectly inelastic demand
5. Percentage method and total outlay method
TEST NO 5
1 . Define :1.
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Supply
Supply schedule
Market supply
Total cost
Average cost
Marginal cost
2. Distinguish Between
1.extension and contraction of supply
2. increase and decrease in supply
3. individual and market supply curve
4. supply and stock
3.Answer the following :1. what are the determinants of market supply?
2.explain the law of supply. What are the exceptions to the law of supply?
3.what is elasticity of supply? What are the types of elasticities of supply?
4. what are the determinants of elasticity of supply?
5. what are the methods of measuring price elasticity of supply?
TEST NO 6
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What is a market? What are the features of a market?
Define Perfect competition.
What are the features of PC?
What are the features of pure competition?
How is price determined under perfect competition?
What is monopoly?
What are the features of monopoly?
What are the types of monopoly?
What is monopolistic competition? What are the features of monopolistic competition?
Explain giving reasons :1.A seller is a price maker in monopoly.
2. There are several assumptions of perfect competition.
3. Uniform price prevails under perfect competition.
4. Selling costs are incurred by firms under monopolistic competition.
TEST NO 7
1. Land and features
2. Labour and features
3. Capital and features
4. Organisation and features
TEST NO 8
1. Features of macro economics
2. Difference between micro and macro economics
TEST NO 9
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Definition of national income
Circular flow of national income
Concepts of national income
Methods of measuring national income
Difficulties in calculating national income.
TEST NO 10
1 . What is aggregate demand? What are the determinants of aggregate demand?
2 . What is aggregate supply? What are the determinants of aggregate supply?
TEST NO 11
1 What is saving function? Explain with the help of a diagram.
2. Explain the Keynesian psychological law of consumption function.
3. Explain the concepts of APC and MPC.
4. What are the factors of consumption function?
TEST NO 12
1. What is money? What are the types of money?
2. What are the functions of money?
3. What are the qualities of good money?
4. Money is what money does. Explain .
TEST NO 13
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Define Commercial banks.
Explain the primary, secondary functions of commercial banks.
What are the general utility functions of commercial banks?
Explain credit creation by commercial banks.
TEST NO 14
1. What is a central bank? What are the functions of a central bank?
2. What methods of credit control are used by the central bank?
3. Explain both quantitative and qualitative methods of credit control?