Heads amount in rs crores 1 compensation of employees

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Heads Amount in Rs. crores 1. Compensation of employees 35290 2. Govt. final consumption expenditure 11041 3. Private final consumption expenditure 71366 4. Operating surplus 15794 5. Gross fixed capital formation 21001 6. Change in stocks 5143 7. Mixed income of self employed 37135 8. Consumption of fixed capital 6651 9. Net indirect taxes 12203 10. Net exports –1478 Solution: Expenditure method GDP fc = (2) + (3) + (5) + (6) + (10) – (9) = 11041 + 71366 + 21001 + 5143 + (–1478) – 12203 = Rs. 94870 crores. Income method GDP fc = (1) + (4) + (7) + (8) = 35290 + 15794 + 37135 + 6651 = Rs. 94870 crores. 35. An economy produces two goods: T-shirts and cell phones. The following table summarizes its PPC. Calculate the marginal opportunity costs of T-shirts at various combinations. (NCERT) T-shirts (in millions) Cell phones (in thousands) 0 90000 1 80000 2 68000 3 52000 4 34000 5 10000
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APPENDICES 213 APPENDICES Solution: T-shirts Cell phones Marginal (in millions) (in thousands) opportunity cost 0 90000 1 80000 10000 2 68000 12000 3 52000 16000 4 34000 18000 5 10000 24000 36. A person’s total utility schedule is given below. Derive marginal utility schedule. Amount Consumed Total utility 0 0 1 10 2 25 3 38 4 48 5 55 Solution: Amount Consumed Total utility Marginal utility 0 0 0 1 10 10 2 25 15 3 38 13 4 48 10 5 55 7 37. Originally, a product was selling for Rs. 10 and the quantity demanded was 1000 units. The product price changes to Rs. 14 and as a result the quantity demanded changes to 500 units. Calculate the price elasticity. Solution: e p = q p p q × = 500 4 10 1000 × = 1.25 38. Calculate the APPs and MPPs of a factor from the following table.
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214 INTRODUCTORY ECONOMICS Level of factor TPP employment 0 0 1 5 2 12 3 20 4 28 5 35 6 40 7 42 Solution: Level of factor TPP APP MPP employment 0 0 1 5 5 5 2 12 6 7 3 20 6.6 8 4 28 7 8 5 35 7 7 6 40 6.6 5 7 42 6 2 39. A firm is producing 20 units. At this level of output, the ATC and AVC are respectively equal to Rs. 40 and Rs. 37. Find out the total fixed cost of this firm. Solution: We know that, AC = AVC + AFC Or, AFC = AC – AVC = 40 – 37 = 3 AFC = TFC Q TFC = AFC × Q = 3 × 20 = 60 Total fixed cost is Rs. 60.
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APPENDICES 215 APPENDICES III NBSE QUESTION PAPERS [1995–2005] 2005 1. What is gross domestic product? 2. What is consumption? 3. What is derived demand? 4. What is fiscal policy? 5. What is meant by value added? 6. What is meant by supply schedule? 7. What is meant by ex-post saving? 8. What does it mean when there is a shift of the demand curve to the right? 9. Define capital formation. 10. Define capital transfer. 11. Define equilibrium price. 12. Define subsidy. 13. Does the household sector produce goods and services? 14. Can income from smuggling be included in national income accounting? 15. Communication belongs to which producing sector? 16. Give an example of variable cost. 17. Is the expenditure on research and development an example of intermediate consumption? 18. Is windfall profit a part of national income? 19. Under what title does the CSO publish the annual national income statistics?
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