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Tamilnadu Samacheer Kalvi 11th Economics Solutions Chapter 1 Introduction to Micro Economics

Samacheer Kalvi 11th Economics Introduction to Micro Economics Text Book Back Questions and Answers

PART – A

Multiple Choice Questions.

Question 1.
‘Economics is a study of mankind in the ordinary business of life’ – It is the statement of ………………………..
(a) Adam Smith
(b) Lionel Robbins
(c) Alfred Marshall
(d) Samuelson
Answer:
(c) Alfred Marshall

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Question 2.
The basic problem studied in Economics is ……………………….
(a) Unlimited wants
(b) Unlimited means
(c) Scarcity
(d) Strategy to meet all our wants
Answer:
(c) Scarcity

Question 3.
Microeconomics is concerned with ……………………….
(a) The economy as a whole
(b) Different sectors of an economy
(c) The study of individual economic units behaviour
(d) The interactions within the entire economy
Answer:
(c) The study of individual economic units behaviour

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 4.
Which of the following is a microeconomics statement?
(a) The real domestic output increased by 2.5 percent last year
(b) Unemployment was 9.8 percent of the labour force last year
(c) The price of wheat determines its demand
(d) The general price level increased by 4 percent last year
Answer:
(c) The price of wheat determines its demand

Question 5.
Find the odd one out.
(a) “An inquiry into the nature and the causes of the Wealth of Nations”
(b) “Principles of Economics”
(c) “Nature and Significance of Economic Science”
(d) “Ceteris paribus”
Answer:
(d) “Ceteris paribus”

Question 6.
The equilibrium price is the price at which ……………………….
(a) Everything is sold
(b) Buyers spend their money
(c) Quantity demanded equals quantity supplied
(d) Excess demand is zero
Answer:
(c) Quantity demanded equals quantity supplied

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 7.
Author of “An Inquiry into the Nature and Causes of Wealth of Nations”.
(a) Alfred Marshall
(b) Adam Smith
(c) Lionel Robbins
(d) Paul A Samuelson
Answer:
(b) Adam Smith

Question 8.
“Economics studies human behaviour as a relationship between ends and scarce means which have alternative uses” is the definition of economics of …………………………
(a) Lionel Robbins
(b) Adam Smith
(c) Alfred Marshall
(d) Paul A Samuelson
Answer:
(a) Lionel Robbins

Question 9.
Who is the Father of Economics?
(a) Max Muller
(b) Adam smith
(c) Karl Marx
(d) Paul A Samuelson
Answer:
(b) Adam smith

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 10.
“Economics is a science” The basis of this statement is …………………………
(a) Relation between cause and effect
(b) Use of deductive method and inductive method for the formations of laws
(c) Experiments
(d) All of the above
Answer:
(d) All of the above

Question 11.
Utility means ……………………..
(a) Equilibrium point at which demand and supply are equal
(b) Want – satisfying capacity of goods and services
(c) Total value of commodity
(d) Desire for goods and services
Answer:
(b) Want – satisfying capacity of goods and services

Question 12.
A market is ………………………
(a) Only a place to buy things
(b) Only a place to sell things
(c) Only a place where prices adjust
(d) A system where persons buy and sell goods directly or indirectly
Answer:
(d) A system where persons buy and sell goods directly or indirectly

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 13.
Which one of the following is not a point in the Welfare Definition of Economics?
(a) Study of and ordinary man
(b) Economics does not focus on wealth alone
(c) Economics is the study of material welfare
(d) Economics deals with unlimited wants and limited means
Answer:
(d) Economics deals with unlimited wants and limited means

Question 14.
Growth definition takes into account ……………………….
(a) The problem of choice in the dynamic framework of Economics
(b) The problem of unlimited means in relation to wants
(c) The production and distribution of wealth
(d) The material welfare of human beings
Answer:
(a) The problem of choice in the dynamic framework of Economics

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 15.
Which theory is generally included under micro economics?
(a) Price Theory
(b) Income Theory
(c) Employment Theory
(d) Trade Theory
Answer:
(a) Price Theory

Question 16.
……………………….. have exchange value and their ownership rights can be established and exchanged.
(a) Goods
(b) Services
(c) Markets
(d) Revenue
Answer:
(a) Goods

Question 17.
Identify the correct characteristics of utility ……………………..
(a) It is equivalent to ‘usefulness’
(b) It has moral significance
(c) It is the same as pleasure
(d) It depends upon the consumer’s mental attitude
Answer:
(d) It depends upon the consumer’s mental attitude

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Question 18.
Who has given scarcity definition of economics?
(a) Adam Smith
(b) Marshall
(c) Robbins
(d) Robertson
Answer:
(c) Robbins

Question 19.
The process of reasoning from particular to the general is ………………………..
(a) Deductive method
(b) Inductive method
(c) Positive economics
(d) Normative economics
Answer:
(b) Inductive method

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 20.
Total revenue is equal to total output sold multiplied by ………………………….
(a) Price
(b) Total cost
(c) Marginal revenue
(d) Marginal cost
Answer:
(a) Price

PART – B

Answer the following questions in one or two sentences.

Question 21.
What is meant by Economics?
Answer:
The term ‘Economics’ comes from oikonomikos which means ‘Management of households’. ‘Political Economy’ is renamed as ‘Economics’ by Alfred Marshall.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 22.
Define microeconomics?
Answer:

  1. Microeconomics is the study of the economic actions of individual units say households, firms or industries.
  2. It studies how business firms operate under different market conditions.
  3. The combined actions of buyers and sellers determine prices.
  4. Microeconomics covers:
    • Value theory [product pricing and factor pricing]
    • Theory of economic welfare.

Question 23.
What are goods?
Answer:
The materialistic things and services which satisfy human wants are called goods in economics.

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Question 24.
Distinguish goods from services?
Answer:

Goods

Services

1. Free and Economic goods. Ex: air and sunshine Intangible Ex: brand image 1 pen drive
2. Consumer goods. Ex: TV, Furniture, Automobile, etc. Heterogeneous Ex: Music, Consulting physicians etc.
3. Capital goods also called producer goods. Ex: Machines Inseparable from their makers Ex: Labour and Labourer
4. Perishable goods Ex: Fish, Fruits, Flower. Perishable. Ex: A ticket for a cricket match once the match is over.
5. Durable Goods Ex: table, chair                                    –

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 25.
Name any two types of utility?
Answer:

  1. Time Utility: A sick man derives time utility from blood, not at the time of its donation. but only at the operation – time, i.e., when it is used.
  2. Place Utility: A student derives place utility from a book not at the place of its publication (production centre) but only at the place of his education (consumption centre).

Question 26.
Define positive economics?
Answer:

  1. An increase in money supply implies a price rise in an economy.
  2. As the irrigation facilities and application of chemical fertilizers expand, the production of food- grains increases.
  3. Increases in the birth rate and a decrease in the death rate reflect the rate of growth of the population.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 27.
Give the meaning of the deductive method?
Answer:

  1. The deductive method is also named an analytical or abstract method.
  2. It consists of deriving conclusions from general truths.
  3. It takes a few general principles and applies them to draw conclusions.
  4. The classical and neoclassical schools of economists notably, Ricardo, JS Mill, Malthus Marshall, Pigou applied the deductive method in their economic investigations.

PART – C

Answer the following questions in one paragraph.

Question 28.
Explain the scarcity definition of Economics and assess it?
Answer:

  1. Lionel Robbins published a book “An Essay on the Nature and Significance of Economic Science” in 1932.
  2. According to him, “Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”

The major features of Robbins’ definition are

  1. Ends refer to human wants.
  2. Human beings have an unlimited number of wants.
  3. Resources or means that go to satisfy the unlimited human wants are limited or scarce in supply.
  4. The scarcity of a commodity is to be considered only in relation to its demand.
  5. Further, the scarce means are capable of having alternative uses.
  6. An individual grades his wants and satisfies first his most urgent want.
  7. Economics, according to Robbins, is a science of choice.

Criticism:

  1. Robbins does not make any distinction between goods conducive to human welfare and goods that are not.
  2. Economics deals not only with the microeconomic aspects of resource allocation and the determination of the price of a commodity.
  3. Robbins’ definition does not cover the theory of economic growth and development.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 29.
What are the crucial decisions involved in ‘what to produce’?
Answer:
Every society much decides on what goods it will produce and how much of these it will produce.
In this process, the crucial decisions include:

  1. Whether to produce more food, clothing, and housing or to have more luxury goods.
  2. Whether to have more agricultural goods or to have industrial goods and services.
  3. Whether to use more resources in education and health or to use more resources in military services.
  4. Whether to have more consumption goods or to have investment goods.
  5. Whether to spend more on basic education or higher education.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 30.
Explain different types of economic activities?
Answer:
The seven types of economic activities are:

1. Micro – Economics:
Micro Economics is the study of the economic actions of individuals say households, firms, or industries.

Microeconomics covers:

  • Value theory [product pricing and factor pricing]
  • Theory of economic welfare.

2. Macro – Economics:

  • Macroeconomics is the obverse of microeconomics.
  • The general theory of employment, Interest, and money published by Keynes is the basis of modem macroeconomics.

3. International Economics:

  • In the modem world, no country can grow in isolation.
  • Every country is having links with other countries through foreign capital, investment [foreign direct investment], and international trade.

4. Public Economics:

  • Public finance is concerned with the income or revenue-raising and expenditure incurring activities of the public authorities.
  • The scope of public finance covers public expenditure, public revenue, public debt, and financial administration.

5. Developmental Economics:

  • Development economics deals with features of developed nations, obstacles for development, economic and non-economic factors influencing development, various growth models, and strategies.

6. Health Economics:

  • Health economics is an area of applied economics.
  • It covers health indicators, preventive and curative measures, medical research and education, rural health mission, drug price control, neonatal care, maternity and child health, budgetary allocation for health.

7. Environmental Economics:

  • Depletion of natural resources stock and pollution result from rapid economic development.
  • Environmental economics is a study of interdisciplinary tools for the problems of ecology, economy, and environment.

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Question 31.
Elucidate different features of services?
Answer:
Along with goods, services are produced and consumed. They are generally, possess the following:

1. Intangible:

  • Intangible things are not physical objects but exist in connection to other things, for example, brand image, goodwill, etc.
  • The intangible things are converted and stored into tangible items such as recording a music piece into a pen – drive.

2. Heterogeneous:

  • Services vary across regions or cultural backgrounds.
  • A single type of service yields multiple experiences, e.g., music, consulting physicians, etc.

3. Inseparable from their makers:

  • Services are inextricably connected to their makes. For example, labour and labourers are inseparable.

4. Perishable:

  • Services cannot be stored as inventories like assets.
  • For example, it is useless to possess a ticket for a cricket-match once the match is over.
  • It cannot be stored and it has no value-in-exchange.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 32.
What are the important features of utility?
Answer:
The important features of utility:

  1. The utility is psychological. It depends on the consumer’s mental attitude. For example, a vegetarian derives no utility from mutton.
  2. The utility is not equivalent to usefulness. For example, a smoker derives utility from a cigarette; but, his health gets affected.
  3. The utility is not the same a pleasure. A sick person derives utility from taking medicine, but definitely, it is not providing pleasure.
  4. The utility is personal and relative. An individual obtains varied utility from one and the same good in different situations and places.
  5. The utility is the function of the intensity of human want. An individual consumer faces a tendency of diminishing utility.
  6. The utility cannot be measured objectively. It is a subjective concept and it cannot be measured numerically.
  7. The utility has no ethical or moral significance. For example, a cook derives utility from a knife using which he cuts some vegetables, and a killer wants to stab his enemy with that knife. In Economics, a commodity has utility if it satisfies a human want.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 33.
Distinguish between microeconomics and macroeconomics?
Answer:

Micro Economics

Macro Economics

1. It is that branch of economics which deals with the economic decision-making of individual economic agents such as the producer, the consumer, etc. 1. It is that branch of economics which deals with aggregates and averages of the entire economy. E.g., aggregate output, national income, aggregate savings, and investment, etc.
2. It takes into account small components of the whole economy. 2. It takes into consideration the economy of the country as a whole.
3. It deals with the process of price, determination in the case of individual products, and factors of production. 3. It deals with the general price-level in any economy.
4. It is known as price theory 4. It is also known as the income theory.
5. It is concerned with the optimization goals of individual consumers and producers 5. It is concerned with the optimization of the growth process of the entire economy.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 34.
Compare positive economics and normative economics?
Answer:

Positive Economics

Normative Economics

1. An increase in money supply implies a price-rise is an economy. 1. Inflation is better than deflation.
2. As the irrigation facilities and application of chemical fertilizers expand, the production of food grains increases. 2. More production of luxury goods is not good for a less-developed country.
3. An increase in the birth rate and a decrease in the death rate reflect the rate of growth of the population. 3. Inequalities in the distribution of wealth and incomes should be reduced.

PART – D

Answer the following questions in about a page.

Question 35.
Compare and contrast various definitions of Economics.
Answer:
1. Adam Smith – Wealth definition:

  1. Adam Smith [1723 – 1790], in his book “An Inquiry into Nature and Cause of Wealth of Nations” [1776] defines “Economics as the science of wealth”
  2. He explains how a nation’s wealth is created and increased.
  3. He considers that the individual in the society wants to promote his own gain and in this process, he is guided and led by an “invisible hand”
  4. Adam Smith favours the introduction of the “division of labor” to increase the quantum of output.
  5. Severe competition in factories and society helps in bettering the product.
  6. The supply force is very active and a commodity is made available to the consumers at the lowest price.

2. Alfred Marshall – Welfare definition:

  1. Alfred Marshall [1842 – 1924] in his book “Principles of Economics” [1890] defines Economics thus “Political Economy” or Economics is a study of mankind in the ordinary business of life.
  2. It examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well-being.
  3. Thus, it is on one side a study of wealth and on the other and more important side, a part of the study of man”.

The important features of Marshall’s definition are:

  1. Economics does not treat wealth as the be-all and end-all of economic activities.
  2. The man promotes primarily welfare and not wealth. ‘
  3. The science of economics contains the concerns of ordinary people who are moved by love and not merely guided or directed by the desire to get the maximum monetary benefit.
  4. Economics is a social science. It studies people in the society who influence one another.

3. Lionel Robbins – Scarcity definition:

  1. Lionel Robbins published a book “An Essay on the Nature and Significance of Economic Science” in 1932.
  2. According to him, “Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”.

The major features of Robbins’ definition:

  1. Ends refer to human wants. Human beings have an unlimited number of wants.
  2. On the other hand, resources or means that go to satisfy the unlimited human wants are limited or scarce in supply.
  3. The scarce means are capable of having alternative uses.
  4. An individual grades his wants and satisfies first his most urgent want.
  5. Economics, according to Robbins, is a science of choice.

4. Samuelson’s – growth definition:
Paul Samuelson defines Economics as “the study of how men and society choose, with or without the use of money, to employ scarce productive resources which could have alternative uses to produce various commodities over time, and distribute them for consumption, now and in the future among various people and groups of society”.

The major implications of this definition are as follows:

  • Samuelson makes his definition dynamic by including the element of time in it.
  • Samuelson’s definition is applicable also in a barter economy.
  • His definition covers various aspects like production, distribution, and consumption.
  • Samuelson treats Economics as a social science.
  • Samuelson appears to be the most satisfactory.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 36.
Explain various Steps of Deductive and Inductive methods?
Answer:
Steps of the Deductive Method:

  • Step 1: The analyst must have a clear and precise idea of the problem to be inquired into.
  • Step 2: The analyst clearly defines the technical terms used in the analysis. Further, the assumptions of the theory are to be precise.
  • Step 3: Deduce hypothesis from the assumptions taken.
  • Step 4: Hypotheses should be verified through direct observation of events in the real world and through statistical methods, (eg) There exists an inverse relationship between price and quantity demanded of a good.

Steps of Inductive Method:

  • Step 1: Data are collected about a certain economic phenomenon. These are systematically arranged and general conclusions are drawn from them.
  • Step 2: By observing the data, conclusions are easily drawn.
  • Step 3: Generalization of the data and then Hypothesis Formulation Step 4. Verification of the hypothesis (eg. Engel’s law)

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 37.
Elaborate on the nature and scope of Economics?
Answer:
Nature of Economics:
The nature of a subject refers to its contents and how and why they find a place in the subject. This nature is understood by studying the various definitions given by Economists.
The nature of Economics can be clearly understood from the following definitions :

  1. Adam Smith (classical Era) who considered Economics as a science of wealth gave wealth definition.
  2. Alfred Marshall (Neo-classical era) considered Economics as a social science which studies wealth on one side and the material welfare of human beings on the other side.
  3. Robbin’s Scarcity Definition (new age) He defined Economics as a science of choice.
  4. Samuelson gave a growth definition which represents the modern age.
  5. The scope of economics refers to the subject matter of economics. It throws light on whether it is an art or a science and science, whether positive or normative science.

Economics: It’s the subject matter:

Related to society:

  1. Economics focuses on the behaviour and interactions among economic agents, individuals and groups belonging to an economic system.
  2. It deals with the consumption and production of goods and services and the distribution of income among the factors of production.

Related to scarce resources:

  1. Economics studies the ways in which people use the available resources to satisfy their multiplicity of wants.

Human science or Social science:

  1. Economics is concerned with the activities of human beings.
  2. The action of one member affects those of the others in the society. Hence, economics is called human science or social science.

Related to wealth:

  1. Economics constitutes all human activities related to wealth.
  2. Human activities not related to wealth are not included in Economics.

Economics as an art:

  1. Art is the practical application of knowledge for achieving particular goals.
  2. Economics provides guidance to the solutions to all the economic problems.

Economics as a science:

  1. Science is a systematic study of knowledge. Science develops the co-relation between cause and effect based on facts.
  2. Economics examines the relationship between the cause and effect of the problems. Hence, it is rightly considered as both an art and a science.

Economics: Positive and Normative science:

  1. Positive- Economics is concerned with how? and why? and normative Economics with ‘What ought to be’.
  2. Economics is both a positive and normative science.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 38.
Explain basic problems of the economy with the help of the production possibility curve?
Answer:
1. The problem of choice between relatively scarce commodities due to limited productive resources with the society can be illustrated with the help of a geometric device, which is known as the production possibility curve.

The production possibility curve shows the menu of choice along which a society can choose to substitute one good for another, assuming a given state of technology and given total resources.

2. The explanation and analysis of the production possibility curve are based upon certain assumptions, some of them are the following:

  • The time period does not change. It remains the same throughout the curve.
  • Techniques of production are fixed.
  • There is full employment in the economy.
  • Only two goods can be produced from the given resources.
  • Resources of production are fully mobile.
  • The factors of production are given in quantity and quality.
  • The low of diminishing returns operates in production.

3. Every production possibility curve is based upon these assumptions. If some of these assumptions change or neglected, then it affects the nature of the production possibility curve.

4. To draw this curve we take the help of the production possibilities schedule, as shown below.

Samacheer Kalvi 11th Economics Guide Chapter 1 Introduction to Micro Economics img 1a

5. The schedule suggests that if all resources are thrown into the production of food, a maximum of 500 tons of food can be produced, given the existing technology.

If on the other hand, all resources are instead used for producing cars, 25 cars can be produced. In between these two extreme possibilities exist. If we are willing to give up some food, we can have some cars.

6. We can obtain a production possibility curve by drawing the production possibilities schedule graphically. The quantity of food is shown on the x-axis and the number of cars is shown on the y-axis, the different six production possibilities are being shown as point P1 P2 P3 P4 P5 & P6

Problems of the economy

1. The problem of choice:
The problem of choice arises because of the given limited resources and unlimited wants, which may relate to the allocation of resources between the goods for the higher income group and the lower-income group and the goods for the defense and the civilians. Since PPC is the locus of the combination of the goods the problem of choice will not arise when we choose any point on PPC.

2. Solution of central problems:
The central problems of an economy can be explained with the help of PPC. The solution to the problem of what to produce involves the decision regarding the choice of location on the production possibility carves.

A production combination represented by any point inside the PPC indicates that the economy is using inefficient methods of production and an inefficient combination of resources.

Samacheer Kalvi 11th Economics Introduction to Micro Economics Additional Important Questions and Answers

Part – A

Multiple Choice Questions.

Question 1.
Alfred Marshall renamed “Political Economy” as “Economics” in
(a) 18th century
(b) 19th century
(c) 20th century
(d) 21st century
Answer:
(b) 19th century

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Question 2.
Marshall definition of Economics is known as ………………………
(a) Wealth
(b) Welfare
(c) Scarcity
(d) Modem
Answer:
(b) Welfare

Question 3.
Alfred Marshall wrote “Principles of Economics” in
(a) 1776
(b) 1890
(c) 1776
(d) 1932
Answer:
(b) 1890

Question 4.
The term “micro” means ………………………..
(a) Small
(b) Big
(c) Normal
(d) Abnormal
Answer:
(a) Small

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 5.
Examples of perishable goods
(a) Television, Furnishers
(b) Fish, Fruits, Flowers
(c) Table, Chair
(d) Vehicles, Capital goods
Answer:
(b) Fish, Fruits, Flowers

Question 6.
……………………… means a place where commodities are bought and sold.
(a) Market
(b) Price
(c) Cost
(d) Revenue
Answer:
(a) Market

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 7.
The value of goods expressed in money terms is
(a) Price
(b) Revenue
(c) Market
(d) Cost
Answer:
(a) Price

Question 8.
…………………. goods directly satisfy human wants.
(a) Consumer
(b) Capital
(c) Economic
(d) Producer
Answer:
(a) Consumer

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 9.
__________ is the assumption in economics that makes the economic laws hypothetical
(a) Other things remaining the same
(b) Time remaining the same
(c) Money remaining the same
(d) Wants to remain the same
Answer:
(a) Other things remaining the same

Question 10.
Who defined “Economics as the science of wealth”?
(a) Karl Marx
(b) Paul A. Samuelson
(c) Max Muller
(d) Adam Smith
Answer:
(d) Adam Smith

Part – B

Answer the following questions in one or two sentences.

Question 1.
What is the scope of Economics?
Answer:
The scope of the subject of Economics refers to the subject matter of Economics. It throws light on whether it is an art or a science and if science, whether it is a positive science or normative science.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 2.
Write a note on Distribution.
Answer:
Distribution studies about the pricing of factors of production.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 3.
Define macroeconomics?
Answer:

  1. Macroeconomics is the obverse of microeconomics. It is concerned with the economy as a whole.
  2. It is the study of aggregates such as national output, inflation, unemployment, and taxes.
  3. The General Theory of Employment, Interest, and Money published by Keynes is the basis of modem macroeconomics.

Part – C

Answer the following questions in one paragraph.

Question 1.
Explain different types of utility?
Answer:
The different types of utility are:

  1. Form utility: An individual consumer obtains utility from a good or service only when it is available in a particular form. Raw materials in their original form may not possess utility for a consumer.
  2. Time utility: A sick man derives time utility from blood not at the time of its donation, but only at the operation-time (i.e.,) when it is used.
  3. Place utility: A student derives place utility from a book not at the place of its publication but only at the place of his education.
  4. Service utility: An individual consumer derives service utility a service made available at the time when he most needs it.
  5. Possession utility: When a student buys a book or dictionary from a bookseller, then only it gives utility.
  6. Knowledge utility: It is the utility derived by having knowledge of a particular thing. Advertisement serves as a source of information on an object.
  7. Measurability of utility: Wants of a person are satisfied by the act of consumption. The consumer derives utility, measured in terms of ‘Utils’. A “Util” is a unit of measurement of utility.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 2.
What are the major implications of Samuelson’s growth definition?
Answer:

  1. Like Robbins, Samuelson states that the means which have alternative uses are scarce in relation to unlimited ends.
  2. His definition is dynamic by including the element of time and it covers the theory of economic growth.
  3. This definition is applicable also in a non-monetary, barter economy.
  4. His definition covers various aspects like production, distribution, and consumption.
  5. Samuelson treats economics as a social science.

Question 3.
What is the importance of microeconomics?
Answer:

  1. To understand the operation of an economy.
  2. To provide tools for economic policies.
  3. To examine the condition of economic welfare.
  4. Efficient utilization of resources.
  5. Useful in international trade.
  6. Useful in decision making.
  7. Optimal resources allocation.
  8. The basis for prediction.
  9. Price determination.

Part – D

Answer the following questions in about a page.

Question 1.
What is the nature of economic laws?
Answer:

  1. A Law expresses a causal relation between two or more than two phenomena.
  2. Marshall states that the Economics laws are statements of tendencies and those social laws, which relate to those branches of conduct in which the strength of the motives chiefly concerned can be measured by money price.
  3. In natural sciences, a definite result is expected to follow from a particular cause.
  4. In Economics science, the laws function with cause and effect.
  5. The consequences predicted by the data, necessarily and invariably follow.
  6. Economics laws are not as precise and certain as the laws in the physical sciences.
  7. A physical scientist carrying out controlled experiments in his laboratory can test the scientific laws very easily by changing the conditions obtaining there.
  8. Change in Economics science cannot be brought about easily.
  9. Unpredictability is invariably associated with Economic laws.
  10. Economics laws are not assertive but they are indicative.
  11. The use of the assumption “other things remaining the same” in economics makes the economics laws hypothetical.
  12. The hypothetical elements in-laws are a little less pronounced than in the laws of physical sciences.
  13. As the value of the measuring-rod money is not constant, there are always hypothetical elements surrounding the laws of Economics.
  14. Some economics laws are simply truisms.
  15. For example, saving is a function of income.
  16. Another example of truism is human wants are unlimited.

Tamil Nadu 12th Computer Science Model Question Paper 1 English Medium

Question 2.
Explain the types of economics.
Answer:
1. Micro-Economics:
Microeconomics is the study of the economic actions of individual units say households, firms, or industries.

2. Macro-Economics:
Macroeconomics is concerned with the economy as a whole. It is the study of aggregates such as national output, inflation, unemployment, and taxes.

3. International economics:
No country can grow in isolation, every country is having links with other countries through foreign capital, investment, and international trade.

4. Public economics:
Public finance is concerned with the income or revenue-raising and expenditure incurring activities of the public authorities. It covers public expenditure, public revenue, public debt, and financial administration.

5. Developmental economics:
Development economics deals with features of developed nations, obstacles for development. Economic and non-economic factors influencing development, various growth models, and strategies.

6. Health economics:
Health economics is an area of applied economics. It covers health indicators, preventive and curative measures, medical research, and education. Rural health and budgetary allocation for health etc.

7. Environmental economics:
Environmental economics analyses the interrelationship between economy and environment. It is a study of interdisciplinary tools for the problems of ecology, economy, and environment.

ACTIVITY

Meet ten of your classmates and prepare a report on the advantages of studying Economics?
Advantages of Studying Economics:

Student: 1

  1. Economic policy is financial supporters.
  2. Many treatments of economics are inexact and can contradict each other.
  3. These is analytic or mathematical theories.
  4. The Economic subject in a logical and Pseudo-Scientific manner.
  5. The future of our daily lives in regards to the economic status and happenings of the world.
  6. Economics is basically called the “Queen Subject” of all subjects of social sciences.
  7. Economics is one of the most useful of all sciences.
  8. To learn how to distribute scarce resources efficiently.
  9. To understand how the market will react to certain actions.
  10. Economics is described as the study of production, distribution, and consumption of goods and services, along with the transfer of wealth.

Student: 2

  1. People like it.
  2. It studies people’s behaviors in different markets.
  3. They make economics a social study.
  4. Economics is a study of how money is distributed.
  5. Economic policies are good.
  6. Its connection to human behavior is clear.
  7. They save, spend, or invest funds.
  8. It studies how market decisions are made.
  9. In Economics you will study how to work in the financial and learn how to manage money.
  10. Economics is the study of Economic Activities.
  11. The resources that are needed to satisfy everyone’s wants.
  12. Economics studies how scarcity causes people to make different choices.
  13. They like the analysis.
  14. It is an empirical study.

Student: 3

  1. Economics is the study of the effects of social, emotional, and cognitive factors on the economic decisions of people and companies.
  2. Economics enables us to understand money.
  3. Economics makes a nation prosper.
  4. It makes a person educated in a real sense.
  5. Economics is defined as the science of money.
  6. The most important factor in modem man’s life.
  7. It is most important to study.
  8. Economics addresses many interesting problems in modem society.
  9. We encourage growth in developing countries.
  10. An opportunity to get an education.
  11. To prove to a prospective employer.
  12. The primacy of Economic life.
  13. Economics studies the way the world works as a human society.
  14. The priorities of its wants and needs.
  15. It is a huge subject covering natural resources.
  16. The contributions of humans.
  17. The contributions of investors.

Student: 4

  1. I am interested in economics.
  2. Economics addresses many interesting problems in modem society.
  3. The valuation of nonmarket goods.
  4. We encourage growth in developing countries.
  5. A business relevant analytical skillset.
  6. An opportunity to get an education to prove to a prospective employer.
  7. Economics teaches you how to know what is needed and wanted.