Subject: EconomicsClass: 8 OPaper: 1Time: 1 hourT. Marks: 30Encircle the Correct Answer for the following statements1: A government decides to switch reliance from direct to indirect taxes. As a result of this decision, which tax is likely to reduce and which is likely to rise?DecreaseIncrease(a) Customs duties Cpaital gains tax(b) Excise duties corporate tax(c) Income tax VAT(d) Licenses inheritance tax2: A government wants to redistribute income from the rich to the poor. Which changes in taxation would help it to achieve this objective?(a) A cut in corporate tax and a rise in sales tax(b) A cut in VAT and a rise in income tax(c) A cut in capital gains tax and inheritance tax (d) A rise in customs duties and excise duties.3: in which circumstance will the greatest amount of the tax be borne by the consumer?(a) Elastic inelastic(b) Inelastic elastic(c) Inelastic elastic(d) Elastic inelastic4: Which of the following is a direct tax?(a) Excise duty on petrol(b) Inheritance tax(c) Sales tax(d) Tariff5: What is meant by a regressive tax?(a) A tax that falls in line with inflation(b) A tax that reduces government revenue over time(c) A tax that places a greater burden on the poor than the rich.(d) A tax that is replaced by one which generates more income.6: Which of the following is an advantage, a small firm may have over a large firm?(a) It can adapt more quickly to changes in demand(b) It can raise finance more easily.(c) It can hire specialist staff.(d) It can spread its risks.7: what is most likely to be supplied by small firms?(a) banking (b) film production(c) shoe repair(d) steel8: A toy manufacturer merges with a chemical company. What type of integration is this?(a) Conglomerate(b) Horizontal (c) vertical integration backward(d) Vertical integration forward9: What is meant by internal economies of scale?(a) A fall in short run average costs arising from the growth of a firm.(b) A fall in long run average costs arising from the growth of a firm.(c) A fall in short run average costs arising from the growth of an industry.(d) A fall in long run average costs arising from the growth of an industry.10: What is meant by financial economies of scale?(a) Lower average costs experienced by large banks and other financial institutions.(b) Lower average costs arising from a large firm operating its finance department more efficiently.(c) Lower average costs due to the ability of large firms to borrow more cheaply(d) Lower average costs occurring because of the use of larger capital equipment.11: What are the three questions faced by all economies?(a) What to produce, when to produce it and who receives it.(b) What to produce, how to produce it and who receives it.(c) Where to produce, how to produce and when to produce.(d) Where to produce, when to produce and how to produce.12: How are resources allocated in a market economy?(a) By directives(b) By the price mechanism(c) By directives or the price mechanism(d) By directives and the price mechanism13: what is the relationship between demand and price and the relationship between supply and price?Demand and pricesupply and price(a) Directly relateddirectly related (b) Directly related inversely related(c) Inversely related directly related(d) Inversely related inversely related14: What happens to peoples willingness and ability to buy a product when its price falls? Willingness Ability(a) Increasesincreases(b) Increasesdecreases(c) Decreasesdecreases(d) Decreasesincreases 15: What could explain this change?(a) A rise in the price of coffee(b) A rise in the price of tea(c) A successful advertising campaign for tea(d) A health report indicating that drinking coffee can cause headaches.16: An increase in demand is represented by:(a) A movement down the demand curve(b) A movement up the demand curve(c) A shift to the left of demand curve.(d) A shift to the right of the demand curve.17: how would an increase in supply be illustrated?(a) A movement up the supply curve(b) A movement down the supply curve(c) A shift to the left of the supply curve(d) A shift to the right of the supply curve18: What would cause an increase in the supply of milk?(a) An increase in the rice of cattle feed.(b) An increase in wages paid to farm workers.(c) The introduction of a subsidy to cattle farmers.(d) The outbreak of disease affecting cows.19: what is price elasticity of demand?(a) A measure of the extent to which price changes when the quantity demanded changes.(b) A measure of the extent to which the quantity demanded changes when price changes.(c) A measure of the extent to which total revenue changes when price changes.(d) A measure of the extent to which price changes when total revenue changes.20: Demand for a product is inelastic. What effect will a fall in price have?(a) Demand will not change(b) Demand will change by a greater percentage.(c) Total revenue will fall.(d) Total revenue will rise.21: in what circumstances would supply of a product be elastic?(a) It is costly to produce(b) It takes time to produce(c) It can be stored(d) It uses resources which are in short supply.22: What encourages firms to produce what consumers demand?(a) The chance to earn a high profit(b) The chance to experience high unit costs of production(c) The desire to attract new firms into the industry(d) The desire to keep revenue as low as possible23: Why does scarcity continue to be a problem in the future?(a) Prices will rise(b) They quantity of resources will decline.(c) Wants will continue to increase(d) World population will fall.24: Which factor of production is the most mobile?(a) Capital(b) Enterprise(c) Labour(d) Land25: A country produces 3,000 new capital goods in a week, 500 of these replace worn out goods. What is the nest investment made?(a) 500(b) 2,500(c) 3,0000(d) 3,50026: Which of the following is a free good?(a) Inoculation provided without charge by the state(b) Prizes of food items given away by a supermarket(c) Recycled paper(d) Wind coming in from the sea27: a man presently works as a builder. His previous jobs included working as a farm labourer and a street trader. His nest bet-paid job is that of a carpenter but he would rather choose to work as a gardener, if not a builder. What will be the opportunity cost of him working as builder? Working as:(a) Carpenter(b) A farm labourer(c) A gardener(d) A street trader28: what is a cause of market failure?(a) Competition between firms(b) Consumers lacking information about where the lowest prices can be found.(c) Differences in pay between skill and unskilled workers.(d) Resources being both geographically and occupationally mobile30: Which type of goods would be over-produced if left to market forces?(a) Basics necessities(b) Capital goods(c) Demerit goods(d) Public goods

Subject: EconomicsClass: 8 OPaper: 2Time: 1 hourT. Marks: 70

Note: Section A is compulsory and attempt any two questions from Section B.Section AIndia has a long tradition of government planning but the degree of government intervention in the economy has been reduced in the last two decades. Presently India is a mixed economy and moving towards free market economy, where Privatization started in 1991, with the creation and sale of a small number of shares in some SOEs (state-owned enterprises). This process speeded up in the first decade of the 2000s. In 2004, for instance, the Indian government sold off some of its shares in the Oil and National Gas Corporation and some shares in the airports of Delhi and Mumbai, hoping that this would stimulate more investment and greater efficiency. This privatization has been opposed by the communist parties of India which argue that firms perform better in the public sector. India wants to keep itself a powerful country for this purpose it signed many contracts of purchasing latest missiles technology to keep its boundaries safe and free of any external threats.Q1: (a):What is meant by privatization? [3](b):Explain one reason for better performance of a firm when:It is in the private sectorIt is in the public sector[4] (c):Give a detailed note on advantages and disadvantages to India of becoming a free market economy. [12](d):Explain with the help of a diagram and different combinations of missiles and IT industry products at production possibility curve it. [10](e):Give one disadvantage to Indian economy of investing greater on weapons than IT industry. [1]

PTO

Section B:

Question 2: (a): With the help of demand and supply schedule and diagram explain equilibrium price and quantity. [10]____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(b): What are the factors that can affect the supply of a product? [6]___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(c): explain with the help of a formula the concept of price elasticity of demand. [4]__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Question 3:(a): Explain the factors that influence the size of a firm. [4]__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(b): Briefly explain with the help of examples the concepts of i.Vertical integration forwardii.Conglomerate integrationVertical integration backward. [6]____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(c): Give a detailed note on the advantages of small firms. [10]___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Question 4:what are different types of internal economies of scale? [10]___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(b): briefly explain any four types of direct taxes.[4]__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(c): What are different qualities of a good tax? [6]___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________