PART A (40 Marks)
Instructions: 1) Question No. 1 to 20.
2) Attempt all 20 questions.
3) Each question carries 2 marks.
4) Answer should be given approximately in 20 to 30 words.


001. Who is regarded as the father of Economics? Why?
002. What makes a consumer to buy more of a commodity even at a higher price?
003. When is demand said to be price elastic? Name a product whose demand is, in general, price elastic.
004. State the equi-marginal principle and indicate its significance in decision making.
005. Suppose the consumer's budget constraint is given by P1Q1 P2Q2 Y. The government imposes a lump-sum tax of a specific tax on good 1 and a subsidy on good 2 s. What is the equation of the consumer's new budget line?
006. The graph of production function is non-linear. Explain.
007. State the salient features of the monopolistically competitive market.
008. A profit maximising firm never operates on the inelastic part of the demand curve. Why?
009. While Microeconomics deals with variables like unemployment and balance of payments, Macroeconomics discusses variables like crude oil price and number of computers manufactured. Comment.
010. Distinguish between GNP and GDP.
011. When a chicken is born, per capita real GDP goes up; when a child is born, per capita real GDP goes down. Comment.
012. Distinguish between fiscal deficit and trade deficit.
013. Distinguish between retail inflation and wholesale inflation.
014. Distinguish between economic growth and economic development.
015. Discuss the role of automatic stabilisers in taming business cycles.
016. Name the three parameters which determine the magnitude of the autonomous expenditure (Keynesian) multiplier, hence the effectiveness of the fiscal policy, in an open economy.
017. Why do people hold money, even though it earns a lower return than the other financial assets?
018. Discuss the instruments through which the Central Bank regulates the money supply.
019. Define the concept of the "poverty line" with reference to India.
020. While both foreign portfolio investment and foreign direct investment are desirable, the latter is better than the former. Why?


PART B (60 Marks)
Instructions: 1) Question No. 21 to 32.
2) Attempt all 12 questions.
3) Each question carries 5 marks.
4) Answer should be given approximately in 50 to 60 words.


021. Economics is a "dismal" science. Comment.
022. The law of demand always holds good for superior goods. Explain.
023. Increasing returns to scale implies economies of scale. Comment.
024. Explain the theory of profit propounded by J.A. Schumpeter.
025. "A competitive producer must look to average variable cost in determining whether or not to produce in the short-run, to marginal cost in deciding upon the best volume of production and to average total cost to calculate profits or losses." Discuss.
026. A tax on cigarettes is perhaps the least hated. Why?
027. News papers and Magazines prices are sticky. Why?
028. Is real GDP per capita a good measure of economic well-being? Why or why not?
029. "Banks do not create money out of thin air. They transmute other forms of wealth into money". Discuss.
030. The rupee-dollar exchange rate was at Rs. 5 per dollar in 1965 and it stands at around Rs. 67 per dollar currently (Aug 21, 2016). Explain the factors responsible for this change.
031. The Reserve Bank of India holds about $350 billion worth of the foreign exchange reserves. Some experts say it is too much while some others opine it is too little. Explain.
032. Define globalisation and give one method of measuring it.


PART C (100 Marks)
Instructions: 1) Question No. 33 to 39.
2) Attempt any 5 out of 7 questions.
3) Each question carries 20 marks.
4) Answer should be given approximately in 200 words.


033. What is price discrimination? Consider a case of the third degree price discrimination, list the conditions under which it is profitable to practice, and show how a profit maximising monopolist could transfer a part of the consumers' surplus to itself?
034. Using the Heckscher-Ohlin model of trade, show that free trade is better than no trade. Do the trade partners share the gain equally? Explain.
035. Suppose the policy-makers desire to raise GDP without affecting interest rate. Suggest a mix of fiscal and monetary policy measures that could achieve this goal. Discuss the limitations of your recommendation.
036. Discuss the changes that have been brought about by the World Trade Organisation in the trade and investment environment of the world. What issues the developing economies have yet to resolve with the WTO? Discuss.
037. What is black money? How it is created? Discuss its consequences on the economy.
038. Explain the contribution of cooperative activities in the economic development of Gujarat.
039. Economic growth is a mixed blessing. Elucidate the pros and cons of it.