The saving function of an economy is given as :

S = (–) 50 + 0 �10 Y.

If the ex-ante Investments are < 450 crores, calculate the following :

(i) The equilibrium level of income in the economy.

(ii) Additional investments will be needed to gain an additional

income level of < 3,000 crores.

Explain the concepts of individual demand schedule and market demand

schedule.

The coefficient of price elasticity of demand is given as (–) 3. At a price of

Rs. 10, a consumer buys 100 units of the commodity. How many units of

the commodity will she buy if the price falls by 50 %?

(a) ‘‘A firm under perfect competition is a price taker whereas under

monopoly is a price maker.’’ Defend or refute the statement with

valid reasons.

(b) What is meant by selling cost?

(a) Explain how using ‘‘Bank Rate’’ the Central Bank can regulate money supply in an economy.

(b) What is meant by ‘Repo Rate’?