If marginal propensity to consume is 80% and is constant at all levels of

income, and the autonomous consumption is Rs. 400 crores, construct

consumption function of the given hypothetical economy.

Given the following schedule, state at which level of output, will the firm

be at equilibrium and why.

What is meant by ‘negative returns to a factor’ ? Discuss any two

reasons behind negative returns to a factor.

State which of the following statements are true or false. Give valid

reasons.

(a) According to Keynesian theory of employment, a state of

under-employment can never exist in an economy.

(b) In a two-sector economy, if income is zero, average propensity to

consume will also zero.

Given the following data, find the values of ‘Operating Surplus’ and ‘Net Exports’ :