Ex Ante Consumption

Q.

APC and MPC are two parameters. Which of these parameters can be greater than one, and when?

Q.

MPC + MPS > 1.

1. True

2. False

Q.

Saving function is the functional relationship between

1. Income and consumption

2. Price and saving

3. Saving and income

4. Consumption and saving

Q.

When C = 100 + 0.5Y and Y = 1, 000, autonomous consumption will be:

1. 1, 000

2. 500

3. 100

4. 600

Q.

Consumption never exceeds income.

1. True

2. False

Q.

The value of marginal propensity to save is always positive.

1. True

2. False

Q.

Saving can never be negative.

1. False

2. True

Q.

The APC can be defined as the fraction of a

1. specific level of total income that is not consumed

2. specific level of total income that is consumed

3. change in income that is spent

4. change in income that is not spent

Q.

If MPC is 40%, MPS will be

1. 70%

2. 50%

3. 40%

4. 60%

Q.

If the consumption function is C = bY, what will be the saving function denoted by S?

1. $S=(1-b)Y$

2. $S=-\overline{C}+bY$

3. $S=-\overline{C}+(1+b)Y$

4. $S=-bY$

Q.

Using Decimal Notation Express In Metre :

$\text{5m 13cm}$

Q.

The average propensity to save is equal to

1. $\frac{\Delta Y}{\Delta S}$

2. $\frac{Y}{S}$

3. $\frac{\Delta S}{\Delta Y}$

4. $\frac{S}{Y}$

Q.

The propensity to save means

1. Ratio of saving to income

2. The tendency to save more

3. The tendency to save less

4. None of these

Q.

What one step can be taken through market to reduce the consumption of a product harmful for health?

Q.

How would you distinguish between development and non-development expenditure?

Q.

If MPC = 0.4 and $\Delta Y=1,000,$ what will be $\Delta S$?

1. Rs 400

2. Rs 500

3. Rs 600

4. Rs 250

Q.

How would you specify the saving function, if the consumption function is given below?

$\text{C = bY}$

Q.

Why is the open economy autonomous expenditure multiplier smaller than the closed economy one?

Q.

Find C at equilibrium Y when Y = 6, 000 AND C = 100 + 0.75Y.

1. 3, 900

2. 4, 500

3. 4, 600

4. 5, 000

Q.

Given that, $\text{S}=-25+0.5\text{Y}$ and $\text{I}=5,000$, find equilibrium Y and equilibrium C.

Q. Explain with the help of a numerical example, the meaning of diminishing marginal rate of substitution.

Q. In India, contribution of agriculture to GDP (in percentage terms) has ____________ from period of independence to the current date.

1. increased
2. decreased
3. remained constant
4. nothing can be said

Q.

C is positively related to Y, but C is not zero when Y is zero.

1. True

2. False

Q.

Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (A) is Rs 50 crores, and MPS is 0.2 and level of income (Y) is Rs 4000 crores. State whether the economy is in equilibrium or not (cite reasons).

Q.

Find C at equilibrium Y when: $\text{Y}=6,000$ and $\text{C}=100+0.75\text{Y}$.

Q.

What percentage is each of the following?

$16$ of $64$.

Q. State whether the following statement are TRUE and FALSE.

1. Demand for luxuries is elastic.

2. Perfectly inelastic demand curve is parallel to the X axis.

3. Total outlay is price multiplied by quantity.

4. Unitary Elastic Demand rarely occurs in practice.

5. Concept of Elasticity of Demand is useful for finance minister.

Q. Value of marginal propensity to save can never be negative. True/false

Q. Given that Y = 6, 000 and C = 100 + 0.75Y. Then, at equilibrium, C is .

1. 4, 500
2. 4, 600
3. 5, 000
4. 3, 900

Q. Explain diagrammatically that total revenue is maximum when marginal revenue is zero.