QUESTION BANK (2019-20)DEPARTMENT OF ECONOMICSECH –101/181 ESSENTIALS OF ECONOMICS(Revised: July 2019)UNIT – I: NATURE AND SCOPE OF ECONOMICS 1.“Economics deals only with means, the study of ends lies outside its scope.”Criticallyevaluate the above statement.2.What is an economy? What are the basic problems of an economy? What is the basiceconomic problem?3.The fundamental economic problem of an economy is the problem of choice. Discuss.4.What do you mean by the price mechanism? Discuss its role in an economy?5.What is socialist economy? What role do prices play and how are equilibrium pricesreached in such an economy?6.Explain the role of the price mechanism in a competitive economy. How resources areallocated in a competitive economy?7.Distinguish between macroeconomics and macroeconomics. Explain the uses andlimitations of Microeconomic analysis.8.Distinguish between macroeconomics and microeconomics. To what extended are thefundamental principles of microeconomics applicable to macroeconomics?9.“Because macroeconomics studies issues that affect the entire economy, it must be a moreimportant subject than microeconomics.” Comment on this statement.10.Why are points on the production possibility frontier efficient? Why are points inside the frontierinefficient?11.Draw a production possibility frontier between two goods, say Good Y, measured on the verticalaxis, and Good X, measured on the horizontal axis. Why are the production possibilities frontiersbowed out?12. Write short notes on:a.Methods of Propounding Economic Theoryb.Normative and positive economics c.Economics as an art or scienced.Mixed economye.Wants and resources 1
UNIT – II: THEORY OF CONSUMER BEHAVIOR 13. What is the law of demand? Distinguish between movement along demand curve and
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