Q4 of 50 Page 1

When does ‘change in quantity demand’ take place?

A change in the demand for a good occurs when there is a change in the own price of the good.


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29

Indian investors lend abroad. Answer the following questions

(a) In which sub-account and on which side of the Balance of Payments Account such lending is recorded? Give reasons.


b) Explain the impact of lending on the market exchange rate.

 30

Find Gross National Product at Market Price and Private Income: (Rs crores)

(i)Private final consumption expenditure 800


(ii)Net Current transaction to abroad 20


(iii)Net factor income to abroad(-) 10


(iv)-300


(v)Net indirect tax150


(vi)Net domestic capital formation200


(vii)Current transfer to government40


(viii)Depreciation100


(ix)Net imports30


(x)Income accruing to government90


(xi)National debt interest50

 5

What happens to the difference between the average total cost and the average variable cost as production is increased?

 7

A consumer consumes only 2 goods X and Y. Marginal utilities of X and Y are 4 and 3 respectively. Price of X and price of Y is Rs 3 per unit.Is consumer in equilibrium. What will be the further reaction of the consumer ? Give reasons.