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1. Kerala has the highest literacy rate of 90.92%.

2. For Maharashtra the male literacy rate is 86.27%.

3. There is a difference of 30-66% as a whole in female literacy rate between Delhi and Rajasthan.

4. Kerala has the highest male literacy rate of 94.20% and Uttar Pradesh has the lowest female literacy rate of 42.98%.

1. The two main sectors in Indian education system are:

(a) Public sector 

(b) Private sector.

2. Public sector education system includes public schools, central government funded institutions, state government funded institutions and higher education institutions.

3. Multimedia school comes under non-formal setup of private sector in Indian education system.

4. There are two setups in private sector educational system i.e. formal setup and non formal setup.

Yes, I agree with this statement.

• Micro economics deals with small or individual units. 
• Micro economics divides or slices the economy into small units and studies each unit in detail. 
• It is concerned with microscopic study of these units. It is the study of particular firm, particular household, individual prices, wages, incomes, etc. 
• Hence, micro economics uses slicing method. 

(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).

Price elasticity of demand measures the degree of responsiveness of demand to a change in price of the commodity. e_D is measured by the formula.

E_D= - △Q/ △P . P/Q

The coefficient of price elasticity of demand is always negative showing inverse relationship between price and quantity demanded.

Given P = 10, P₁ = 9, Q = 9, Q₁ = 10

                 Total Expenditure

Since total expenditure is constant, elasticity of demand is one.

Yes, I agree with this statement. 

Based on certain ssumption : Micro economics is based on ‘ceteris paribus’ assumption i.e., other things remaining constant like full employment, laissez faire policy, perfect competition, pure capitalism, etc.

No, I do not agree with this statement.

• Micro economics deals with small or individual units.
• Micro economics is the study of particular firm, particular household, individual prices, wages, incomes, individual industries, particular commodities.
• Micro economics deals with small part of National economy. It does not deal with whole economy like National income, Aggregate demand, Aggregate supply, poverty, inflation, etc.
• Hence, the scope of micro economics is limited. 

1. The census for 2001 was conducted between 9th to 28th February 2001.

2. In the first phase of census a house list was canvassed for collecting information about housing data and amenities available.

3. In 1991 question on availability of toilet were canvassed.

(a) household schedule and facility was canvassed for rural area. 

(b) Individual slip

4. During IInd phase below two schedules were canvassed.

(a) household schedule and 

(b) Individual slip.

Yes, I agree with this statement.

• Micro economics is a study of a particular unit of an economy. On the other hand macro economics is the study of entire economy.
• Micro economics studies individual demand, individual supply, individual income, price determination of particular product, etc. On the other hand macro economics studies aggregate demand, aggregate supply, national income, etc.
• Micro economics follows partial equilibrium analysis and macro economics follows general equilibrium analysis.
• Micro economics uses slicing method for study of small unit and macro economics uses lumping method for study of large unit.
•  Therefore, macro economics is different from micro economics. 

Yes, I agree with this statement. 

(A) Theory of Income and Employment : It ? explains which factors determine the level of National Income and employment and what causes fluctuations in the level of income, output and employment.

To understand how the level of employment is determined, we have to study the consumption function. It includes theory of business cycles.

(B) Theory of General Price Level and Inflation: Macro economics analyses shows how the general price level is determined and the causes for fluctuations in it. This study is important for understanding the problems created by inflation and deflation.

(C) Theory of Economic Growth and Development : Macro economics studies the causes of under development and poverty in poor countries and suggests strategies for accelerating growth and development in the country.

(D) Macro theory of Distribution : Macro theory of distribution deals with the relative share of rent, wages, interest and profit in the total national income of various classes.

No, I do not agree with this statement. 

OR 

Macro Economics deals with the whole s economy.

Yes, I agree with this statement.

• Macro economics deals with entire economy.
• Macro economics follow general equilibrium analysis. On the other hand, micro economics follow partial equilibrium analysis.
• Macro economics studies the behaviour of number of aggregate economic variables.
• Macro economics follows general equilibrium. It assumes “everything depends on every thing else.”
• General equilibrium deals with the behaviour of demand, supply and prices in the whole economy.
• Therefore, macro economics is not a partial equilibrium analysis but it is a general equilibrium analysis.

Wrong pair : Micro economics – General equilibrium

Wrong pair : Census – Limited scope

(1)-(e), (2)-(a), (3)-(b), (4) – (c).

When quantity demanded falls due to a rise in price, keeping other factors constant, it is known as Contraction in Demand.

Yes, I agree with this statement. 

Theory of Income and Employment : It ? explains which factors determine the level of National Income and employment and what causes fluctuations in the level of income, output and employment.

To understand how the level of employment is determined, we have to study the consumption function. It includes theory of business cycles.

According to the law of demand, other things being equal, if the price of a commodity falls, the quantity demanded of it will rise, and if the price of a commodity rises, its quantity demanded will decline. Thus, there is an inverse relationship between price and quantity demanded, other things being same.

Assumptions of law of demand are the following:

1. Income level should remain stable.
2. Taste of consumer should not change.
3. Value of related goods should be constant.
4. Any new substitute should not come in the market.
5. Expectation of risen value should be negligible.
6. Advertisement expenditure has to be same.

No, I do not agree with this statement. 

OR 

Macro Economics is the study of I aggregate. 

OR

Macro economics is concerned with macro economic variables. 

Yes, I agree with this statement.

• Macro Economics studies the behaviour ofthe economy as a whole and not individual behaviour.
• It studies about larger economic units or aggregate economic variables like aggregate demand, aggregate supply, total investment, total savings, total employment, etc.
• It studies the general price level and macro theory of distribution.
• Whereas Micro Economics deals with individual behaviour of the people in the economy. It studies about individual demand, market demand, individual income, price of particular commodity etc.
• According to Prof. Kenneth E. Boulding “Macro Economics deals not with individual; quantities as such, but with aggregates of these quantities, not with individual income but with National Income, not with individual prices but with general price level, not with individual output but with National Output. 

Option : (4) c and d

(i) study of large unit 

(2) Ragnar Frisch 

(3) microscopic study of the economy 

(4) demand and supply 

(5) land, labour, capital and entrepreneur 

(6) small individual unit 

(7) other things remaining constant 

(8) economic policies 

(9) policy oriented science 

(10) and employment 

(11) not a single tree

Wrong pair : Lumping method – Splits the whole economy

(1) Adam Smith 

(2) Total savings 

(3) Investment 

(4) Efficiency in function social activities 

(5) Lumping 

(6) Personal income method 

(7) National 

(8) Marshall anthem 

(9) Theory of Economic Income Welfare 

(10) Per Capita 

(11) Tiny 

(12) Massive 

(13) Capital 

(14) Interest 

(15) Reliance

Demand for a good decrease when the price of the substitute goods falls. Demand curve will shift to the left.

When demand increases due to any factor other than own price of the good OR naming a factor e.g., rise in price of substitute or any other.

When there is change in a factor affecting demand other than own price of the good.

Change in demand can take place, whenever, there exists any change in factors other than the price of a good.

This is to say that change in demand of a good can take place due to changes in any of the following factors:

(i) Change in the income of the consumer.

(ii) Change in the price of the substitute goods.

(iii) Change in tastes and preferences in favour of the commodity.

(iv) Change in future price expectation.

(v) Change in the total number of consumer

X and Y are complementary goods.

The curve depicts the law of demand. It slopes downward to the right. It has a negative slope. The negative slope of the demand curve shows the inverse relationship between the price of commodity and its quantity demanded. It shows that demand for commodity increases with the decrease in its price and it decreases with the rise in its price. Downward movement on the demand curve shows fall in price and rise in demand.

(i) (A) is true but (R) is false.

(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).

1. Price theory 

2. Partial equilibrium 

3. Small

4. Adam Smith 

5. Maynard Keynes 

6. Micro economics 

7. Theory of Economic growth and development 

8. Labour 

9. Interest 

10. Theory of Product Pricing 

11. Small part of economy 

12. Slicing method

(1) Mikros 

(2) Makros 

(3) Macro economics 

(4) Micro economics 

(5) Theory of Product Pricing 

(6) Theory of Factor Pricing 

(7) Theory of Economic Welfare 

(8) Price Theory 

(9) Efficiency in Consumption 

(10) Overall Economic Efficiency 

(11) Partial equilibrium 

(12) Ceteris Paribus 

(13) Limited scope 

(14) Free Market economy 

(15) Foreign Trade 

(16) Economic Model building 

(17) General Equilibrium Analysis

(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).

Fall in price of substitute good etc.

If the other things remaining the same, then increase in demand due to decrease in price and decrease in demand due to increase in price is termed as Law of Demand.

When there is decrease in demand due to a factor other than- own price of the good or naming a factor like fall in price of substitute, etc.

There are some goods (like diamond) that are purchased, not for their intrinsic worth, but for their ‘snob-appeal’. They are cases of what Veblen called ‘ Conspicuous Consumption’ or Articles of ostentation. When price of such goods rise their use becomes more attractive and they are purchased in larger quantities. If fish becomes more costly, some people will buy more of it just to show that they are rich enough to afford it. On the other hand, as the price of Veblen goods falls, their capacity to perform the function of ostentation diminishes. Hence, they are purchased less.

The demand for goods also depends on the income of the people, the higher the income of the people, the greater the demand for them. Demand of commodity increases when the income of people increases, the entire demand curve grows upwards and vice-versa. Higher income means more purchasing power, when people’s income increases, then they can demand general goods.

(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).

Demand for desert coolers will increase.

A Latin term meaning “all other things constant” or “nothing else changes.” If the price of a good decreases, the quantity of it consumed increases, Ceteris paribus. This assumption is made to isolate the effects of a change in the factor under consideration. 

Factors which are covered under Ceteris Paribus are the following:

1. Tastes and preferences
2. Income of the consumer
3. Price of related goods
4. Expectations
5. Number of consumers
6. Government regulations.

Put a tax on it so that its price rises.

No. Decrease in demand refers to decrease in quantity demanded of a commodity at its existing price. It is a situation of backward shift in demand curve, not of contraction of demand.

When quantity demanded of a commodity changes due to change in own price of the commodity, other factors remain constant, it is a situation of extension and contraction of demand.

Yes. Because giffen goods by definition are those inferior goods in case of which two conditions are satisfied: (i) income effect is negative, and (ii) income effect is greater than substitution effect. In case of inferior goods, on the other hand, only one condition needs to be satisfied: that income effect is negative.

A normal good is that good in case of which there is a positive relationship between consumer’s income and quantity demanded. Implying that income effect is positive. An inferior good is that good in case of which there is a negative relationship between consumer’s income and quantity demanded.

A giffen good is that good in case of which income effect is negative as well as greater than substitution effect. Implying that the law of demand fails.

Substitute goods are those goods which can be substituted for each other. 

Complementary goods are those goods which complete the demand for each other.

Yes. Income effect is positive when increase in income causes increase in demand. It occurs in case of normal goods. It is negative when increase in income causes decrease in demand. It occurs in case of inferior goods.