National Income Accounting — Economics STD 12 Humanities & Commerce — Question

A consumer consumes only two goods X and Y, both priced at Rs. 2 per unit. If the consumer chooses a combination of the two goods with Marginal Rate of Substitution equal to 2, is the consumer in equilibrium? Why or why not? What will a rational consumer do in this situation? Explain.

How is the equilibrium price and equilibrium quantity of a normal commodity affected by an increase in the income of its buyers? Explain with the help of a diagram.

Complete the following table.

Price (₹)	1	2	3	4	5	6	7
Units Sold	100	90	80	70	60	50	40

Draw on a diagram a straight line savings curve for an economy. From it derive the consumption curve, explaining the method of derivation. Show a point on the consumption curve at which APC = 1?

Explain the concept of marginal rate of substitution (MRS) by giving an example. What happens to MRS when a consumer moves downwards along the indifference curve? Give reasons for your answer.

How are the following treated in the estimation of national income?

1. Transfer payments.
2. Services of owner occupied houses.
3. Commission received from sale of second hand goods.
4. Non-marketable goods.

In the above example, if exports change to X = 100, find the change in equilibrium income and the net export balance.

Explain that Domestic territory is bigger than the political frontiers of a country.

Outline the steps required to be taken in deriving saving curve from the given consumption curve. Use diagram.

Explain the chain of effects of excess supply of a good on its equilibrium price.