Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script

Kerala State Board New Syllabus Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script.

Kerala Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script

JavaScript(Original name was Mocha) was developed by Brendan Eich for the Netscape Navigator browser later all the browsers support this.

Getting Started With Javascript

Scripts are small programs embedded in the HTML pages, to write scripts <SCRIPT> tag is used.

Two types of scripts
1. Client scripts – These are scripts executed . by the browser(client) hence reduces network traffic and workload on the server.
2. Server scripts – These are scripts executed by the server and the results as a webpage returned to the client browser.

The languages that are used to write scripts are known as scripting languages. Eg: VB Script, Javascript etc.

Javascript and VB Script are the two client-side scripting languages.

Java script developed by Brendan Eich for the Netscape browser) is a platform-independent scripting language. Means It does not require a particular browser. That is it runs on any browser hence it is mostly accepted scripting language. But VB Script(developed by Microsoft) is a platform-dependent scripting language. Means it requires a particular browser(MS Internet Explorer) to work which is why it is not a widely accepted scripting language.

Attribute makes the tags meaningful

Language attribute specifies the name of the scripting language used.

Example:
<SCRIPT Language=”JavaScript”>
</SCRIPT>

The identifiers are case sensitive (means Name and NAME both are treated as different)

CamelCase: An identifier does not use special characters such as space hence a single word is formed using multiple words. Such a naming method is called CamelCase(without space between words and all the words first character is in upper case letter). These are two types
1) UpperCamelCase : when the first character of each word is capitalised.
Eg. Date Of Birth, JoinTime, etc….
2) LowerCamelCase: when the first character of each word except the first word is capitalised.
Eg. dateOfBirth, joinTime, etc,…

To write anything on the screen the following function is used document.write(string);
eg. document.writefWelcome to BVM HSS, Kalparamba”);

Note: Like C++ each and every statement in javascript must be end with semicolon(;).

To create a web page using javascript

<HTML>
<HEAD><TITLE>JAVASCRIPT- WELCOME</
TITLE></HEAD>
<BODY>
<SCRIPT Language=”JavaScript”>
document.write(“welcome to my first javascript page”);
</SCRIPT>
</BODY>
</HTML>

Its output is as follows

Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script 1

Creating Functions in Javascript

Function: Group of instructions(codes) with a name, declared once can be executed any number of times. There are two types
1) built in and
2) user defined

To declare a function, the keyword function is used.

A function contains a function header and function body

Even though a function is defined within the body section, it will not be executed, if it is not called.
Syntax:

function <function name>()
{
Body of the function;
}
Eg: function print()
{
document.write(“Welcome to JS”);
}

Here function is the keyword.
print is the name of the user defined function
To execute(call) the above function namely print do as follows:
print();
Eg:
<HTML>
<HEAD><TITLE>JAVASCRIPT- functions</
TITLE></HEAD>
<SCRIPT Language=”JavaScript”>
function print()
{
document.write(“welcome to my first javascript page using print function”);
}
</SCRIPT>
<BODY>
<SCRIPT Language=”JavaScript”>
print();
</SCRIPT>
</BODY>
</HTML>

Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script 2

Data Types in Javascript

Unlike C++ it uses only three basic data types
1) Number: Any number(whole or fractional) with or without sign.
Eg: +1977, -38.0003, -100, 3.14157,etc
2) String: It is a combination of characters enclosed within double quotes.
Eg: “BVM”, “[email protected]”, etc
3) Boolean: We can store either true or false.lt is case sensitive. That means can’t use TRUE OR FALSE

Variables in Javascript

For storing values you have to declare a variable, for that the keyword var is used. There is no need to specify the data type.
Syntax:
var<variable name1> [, <variable name2>, <variable name3>, etc…]
Here square bracket indicates optional.
Eg: var x, y, z;
x = 11;
y = “BVM”;
z = false;
Here x is of number type, y is of string and z is of Boolean type.
typeof(): this function is used to return the data type
undefined: It is a special data type to represent variables that are not defined using var.

Operators in Javascript
Operators are the symbols used to perform an operation

Arithmetic operators
It is a binary operator. It is used to perform addition(+), subtraction(-), division(/), multiplication(*), modulus (%-gives the remainder) , increment(++) and decrement(–) operations.
Eg. If x = 10 and y = 3 then

Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script 3

If x = 10 then
document.write(++x); -> It prints 10 + 1 = 11
If x = 10 then
document.write(x++); -> It prints 10 itself.
If x = 10 then
document.write(–x); It prints 10 – 1 = 9
If x = 10 then
document.write(x–); -> It prints 10 itself.

Assignment operators
If a = 10 and b = 3 then a = b.
This statement sets the value of a and b are the same, i.e. it sets a to 3.
It is also called shorthands
If X = 10 and Y = 3 then

Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script 4

Relational(Comparison) operators
It is used to perform a comparison or relational operation between two values and returns either true or false.
Eg:
If X = 10 and Y = 3 then

Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script 5

Logical operators
Here AND(&&), OR(||) are binary operators and NOT(!) is a unary operator. It is used to combine relational operations and it gives either true or false
If X = true and Y = false then

Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script 6

Both operands must be true to get a true value in the case of AND(&&) operation
If X = true and Y = false then

Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script 7

Either one of the operands must be true to get a true value in the case of OR(||) operation
If X = true and Y = false then

Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script 8

String addition operator(+)
This is also called a concatenation operator. It joins(concatenates) two strings and forms a string.
Eg:
var x, y, z;
x = “BVM HSS”;
y = “Kalparamba”;
z = x + y;

Here the variable z becomes “BVM HSS Kalparamba”.

Note: If both the operands are numbers then the addition operator(+) produces a number as a result otherwise it produces a string as a result.

Consider the following

Plus Two Computer Application Notes Chapter 6 Client-Side Scripting Using Java Script 9

Eg:
1) 8(number) + 3(number) = 11 (Result is a number)
2) 8 (number) + “3”( string) = “83” (Result is a string)
3) “8” (string) + 3 (number) = “83”(Result is a string)
4) “8” (string) + “3” (string) = “83” (Result is a string)

Control Structures in JavaScript
In general, the execution of the program is sequential, we can change the normal execution by using the control structures.

Simple if Syntax:

if(test expression)
{
statements;
}
First the test expression is evaluated,
if it is true then the statement block will be executed otherwise not.

if-else Syntax:

if(test expression)
{
statement block1;
}
else
{
statement block2;
}

First the test expression is evaluated, if it is true then the statement block1 will be executed otherwise statement block2 will be evaluated.

Switch
It is a multiple bratich statement. Its syntax is given below.

switch(expression)
{
case value1: statements;break;
case value2: statements;break;
case value3: statements;break;
case value4: statements;break;
case value5: statements;break;
..................................
default: statements;
}

First expression evaluated and selects the statements with matched case value.

for loop
The syntax of for loop isgiven below

For(initialisation; testing; updation)
{
Body of the for loop;
}

while loop
It is an entry controlled loop The syntax is given below

Loop variable initialised
while(expression)
{
Body of the loop;
Update loop variable;
}

Here the loop variable must be initialised outside the while loop. Then the expression is evaluated if it is true then only the body of the loop will be executed and the loop variable must be updated inside the body. The body of the loop will be executed until the expression becomes false.

Built-in Functions (methods)
1) alert(): This is used to display a message (dialogue box) on the screen.
eg: alert(“Welcome to JS”);
2) isNaN(): To check whether the given value is a number or not. It returns a Boolean value.
If the value is not a number(NaN) then this function returns a true value otherwise it returns a false value.
Eg.

  1. isNaN(“BVM”); returns true
  2. isNaN(8172); returns false
  3. isNaN(“680121″); returns false
  4. alert(isNaN(8172); displays a message box as false

3. toUpperCase(): This is used to convert the text to uppercase.
Eg: var x=”bvm”;
alert(x.toUpperCase());

4. toLowerCase(): This is used to convert the text to lowercase.
Eg: var x=”BVM”;
alert(x.toLowerCase());

5. charAt(): It returns the character at a particular position.
Syntax: variable.charAt(index);
The index of first character is 0 and the second is 1 and so on.
Eg.var x=”HIGHER SECONDARY”;
alert(x.charAt(4));
Eg 2.
var x=”HIGHER SECONDARY”;
alert(“The characters @ first position is “+x.charAt(O));

6. length property: It returns the number of characters in a string.
Syntax: variable.length;
Eg.
var x=”HIGHER SECONDARY”;
alert(“The number of characters is “+ x.length);
Output is as follows(note that space is a character)

Accessing Values in a Textbox Using JavaScript.

Name attribute of FORM, INPUT, etc is very important for accessing the values in a textbox.

Consider the following program to read a number and display it

<HTML>
<HEAD><TITLE>JAVASCRIPT- read a value from the console</TITLE>
<SCRIPT Language=”JavaScript”>
function print()
{
var num;
num=document.frmprint.txtprint. value;
document.write(“The number you entered is ” + num);
}
</SCRIPT>
</HEAD>
<BODY>
<FORM Name=”frmprint”>
<CENTER>
Enter a number
< IN PUT Type=”text” name=”txtprint”>
<INPUT Type=”button” value=”Show” onClick= “print()”>
</CENTER>
</FORM>
</BOD Y>
</HTML>

In the above code,
print() is the user-defined function.
onClick is an event(lt is a user action). The function print() is executed when the user clicks the show button. Here code is executed as a response to an event.
frmprintisthe name of the form.
txtprint is the name of the text.

Ways to Add Scripts to a Web Page.

Inside <BODY> section
Scripts can be placed inside the <BODY> section.

Inside <HEAD> section
Scripts can be placed inside the <HEAD> section.
This method is a widely accepted method

External (another) JavaScript file
We can write scripts in a file and save it as a separate file with the extension .js. The advantage is that this file can be used across multiple HTML files and can be enhance the speed of page loading.

Plus Two Computer Application Notes Chapter 5 Web Designing Using HTML

Kerala State Board New Syllabus Plus Two Computer Application Notes Chapter 5 Web Designing Using HTML.

Kerala Plus Two Computer Application Notes Chapter 5 Web Designing Using HTML

3 types of Lists in HTML.

1. Unordered List (<UL>) – Items are displayed with square, circle or disc in front.

2. Ordered List (<OL>) – Items are displayed with the following type values.

  • Type = 1 for 1,2, 3, ……..
  • Type = i for i, ii, iii, ………
  • Type = I for I, II, III, ……….
  • Type = a for a, b, c, ………..
  • Type = A for A, B, C, …………

3. Definition List (<DL>) – It is formed by definitions.
<L/> – It is used to specify List items.
<DT> – It is used to specify Definition Term.
<DD> – Used to specify the description
<A> is used to provide hyperlinks. Two types of linking. Its attribute is HREF.

1. External link – Used to connect 2 different web pages.
2. Internal link – Used to connect different locations of same page.

Concept of URL
URL means Uniform Resource Locator.
Two types of URL
a) Relative URL – Here we explicitly give the web site address
Eg: <A href=http://www.hscap.kerala.gov.in>

b) Absolute URL – Here we implicitly give the website address. The path is not specified here.
Eg: Consider the web pages index.html and school.html saved in the folder C:\BVM.
The file indexs.html contains the following.
<A href=”school.html”>.

Here we did not specify the full path of the file school.html. But this implicitly points to the file stored in C:\BVM

Creating Graphical hyperlinks
It can be achieved by using the <img> tag inside the <a> tag.
Eg: <A href=”school.html”><img src=”schoo|.jpg”></A>

Creating E- mail linking
It can be achieved by using the key word mailto as a value to href attribute
Eg: <A href=mailto:”[email protected]”> SPARK</A>

Insert music and videos
<embed> tag is used to add music or video to the page

Attributes

  • src – specifies the file to play
  • width – Specifies the width of the player
  • height – Specifies the height of the player
  • hidden – Used to specifies the player is visible or not
  • <noembed> – Used to specifies an alternate when the browser does not support the <embed> tag.

Attribute

  • src – Used to specify the image file
  • alt – Used to specify the alternate text

Eg:
<html>
<head>
</head>
<body>
Here is a tag embed to play music
<embed src=”c:\alvis.wma” width=”500″ height=”500″ hidden=”true”> </embed>
</body>
</html>

<bgsound> tag
This tag is used to play back ground song or music
Eg:
<html>
<head>
</head>
<body>
<bgsound src=”c:\alvis.wma” loop=”infinite”>
</body>
</html>

  • <Table> is used to create a table.
  • <TR> is used to create a row.
  • <TH> is used to create heading cells.
  • <TD> is used to create data cells.

<Table> Attributes

  1. Border – It specifies the thickness of the borderlines.
  2. Bordercolor – Color for borderlines.
  3. Align – Specifies the table alignment in the window.
  4. Bgcolor – Specifies background colour.
  5. Cellspacing – Specifies space between table cells.
  6. Cellpadding – Specifies space between cell border and content.
  7. Cols – Specifies the number of columns in the table.
  8. Width – Specifies the table width.
  9. Frame – Specifies the border lines around the table.
  10. Rules – Specifies the rules (lines) and it overrides the border attribute. Values are given below:
    • none – display no rules
    • cols – display rules between columns only(vertical lines)
    • rows – display rules between rows only(horizontal lines)
    • groups – display rules between row group and column groups only
    • all – rules between all rows and columns

<TR> attributes

  1. align – specifies the horizontal alignment. Its val¬ues are left, right, centre or justify.
  2. Valign – Specifies the vertical alignment. Its values are top, middle, bottom or baseline.
  3. Bgcolor – Used to set background-color

<TH> and <TD> attributes

  1. Align – specifies a horizontal alignment. Its values are left, right, centre or justify.
  2. Valign – Specifies vertical alignment. Its values are top, middle, bottom or baseline.
  3. Bgcolor – Specifies border color for the cell.
  4. Colspan – Specifiesthenumberofcolumnsspan for the cell.
  5. Rowspan – Specifies the number of rows span for the cell.

Frameset – It is used to divide the window into more than one pane. It has no body section.

<Frameset> attributes

  1. cols – It is used to divide the window vertically.
  2. rows – It is used to divide the window horizontally.
  3. border – specifies the thickness of the frame border.
  4. bordercolor – specifies the color of the frame border.

Frame – It specifies the pages within a frameset.

<Frame> attributes

  1. SRC – specifies the web page.
  2. Scrolling – Scroll bar is needed or not its values are yes, no or auto.
  3. Noresize – It stops the resizing of the frame.
  4. Margin width and Marginheight – Sets margins
  5. Name – To give a name for the frame.
  6. Target – specifies the target.

<Noframe> – It is used to give content when some browsers that do not support frameset.
Nesting of framesets
Step 6: Finally execute the frame.html file

<Form> – It is used to take data from the users and send to the server.

<Input> – It is used to create input controls. Its type attribute determines the control type.

Main values of the type attribute are given below.

  1. Text – To create a text box.
  2. Password – To create a password text box.
  3. Checkbox – Tq^teate a check box.
  4. Radio – To create a radio button.
  5. Reset – To create a Reset button.
  6. Submit-To creates a submit button.
  7. Button – To create a button

To create a group of radio buttons, then the name attribute must be the same.

<Textarea> is used to create a multiline text box. <Label> It is used to give labels.

<Select> It is used to create a list box or combo box. The items must be given by using <option> tag.

Attribute

Name – Specifies the name of the object to identify

Size – If it is 1, the object is a combo box otherwise it is a list box.

Multiple – Allows selecting multiple items

<Form> attributes

1) Action – Here we give the name of the program (including the path) stored in the Webserver.
2) Method – There are 2 types of methods get and post.

Plus Two Computer Application Notes Chapter 5 Web Designing Using HTML 1

3) Target – Specifies the target window for displaying the result. Values are given below.

  • _blank – Opens in a new window
  • _self – Opens in the same frame
  • _parent – Opens in the parent frameset
  • _top – Opens in the main browser window
  • name – Opens in the window with the specified name.
  • <Fieldset> tag

This tag is helpful to divide a form into different subsections and form groups. <legend> tag used to give a caption forthe <fieldset> section.

Plus Two Computer Application Notes Chapter 4 Web Technology

Kerala State Board New Syllabus Plus Two Computer Application Notes Chapter 4 Web Technology.

Kerala Plus Two Computer Application Notes Chapter 4 Web Technology

Website – It is a collection of web pages contained text and multimedia(image, audio, video, graphics, animation etc) files.

A webpage is created by HTML tags

The first web page of a website is known as the home page.

www – means world wide web.

Portals – Rediff, Hotmail, Yahoo, etc are called portals from which the user can do multiple activities.

Communication on the Web
Following are the steps that happened in between the user’s click and the page being displayed

  1. The browser determines the URL selected.
  2. The browser asks the DNS for URLS corresponding IP address (Numeric address)
  3. The DNS returns the address to the browser.
  4. The browser makes a TCP connection using the IP address.
  5. then it sends a GET request for the required file to the server.
  6. The server collects the file and sends it back to the browser.
  7. The TCP connection is released.
  8. The text and the images in the web pages are displayed in the browser.

Client to Web Server Communication
This communication is carried out between the client to the webserver (shopping site). The technology used to protect data that are transferred from client to web server is HTTPS (HyperText Transfer Protocol Secure). This encrypts user name, password etc., and sent to the server. HTTPS works using Secure Sockets Layer (SSL) ensures privacy as well as prevents it from unauthorized access (changes) from other websites. Following are the steps

  1. The browser requests a web page to the server.
  2. The server returns its SSL certificate.
  3. The browser checks the genuinity of the certificate by the authorised certification authority
    (Eg: Veri sign)
  4. The certificate authority certifies whether it is valid or not.
  5. If it is valid the browser encrypts the data and transmits it. The certificate can be viewed by click on the lock symbol.

Web Server to Web Server Communication
This communication is usually carried out between web server (seller) to another web server (normally bank). For the safe transactions Digital certificate issued by third party web sites are used.
Payment gateway is a server (Computer) that acts as a bridge (interface) between merchant’s server and bank’s server to transfer money.

Web Server Technologies

Web server: A computer with high storage capacity, high speed and processing capabilities is called a web server.

Software ports: The computer is not a single unit. It consists of many components. The components are connected to the computer through various ports. Two types of ports Hardware and Software.

Hardware ports: Monitors are connected through VGA ports and the keyboard or mouse are connected through PS/2 ports.

Software ports: It is used to connect client computers to servers to access different types of services. For example HTTP, FTP, SMTP etc. Unique numbers are assigned to software ports to identify them. It is a 16-bit number followed by an IP address.

Plus Two Computer Application Notes Chapter 4 Web Technology 1

DNS Servers
A DNS server is a powerful computer with networking software. It consists of domain names and their corresponding IP addresses. A string address is used to represent a website, it is familiar to humans. The string address is mapped back to the numeric address using a Domain Name System (DNS). It may consist of 3 or 4 parts. The first part is www., the second part is the website name, the third top-level domain, and the fourth geographical top-level domain.
eg.- http://www.nic.kerala.gov.in / results.html.

http – http means hypertext transfer protocol. It is a protocol used to transfer hypertext.
www – World Wide Web. With an email address, we can open our mailbox from anywhere in the world.
nic.kerala – It is a unique name. It is the official website name of the National Informatics Centre.
<script> in – It is the geographical top-level domain. It represents the country, in is used for India.
results.html – It represents the file name.

Web Designing
Any text editor can be used for web designing. Besides that many software tools are available in the market to make the web pages more attractive and interactive, some of the popular softwares are Adobe dream weaver, Microsoft Expression web, Blue fish, Bootstrap etc.

Static and Dynamic Web Pages
Some pages are displaying same content(same text, images,etc) every time. Its content are not changing. This type of web pages are called static page. Conventional wep pages display static pages and has some limitations.
Advanced tools are used to create web pages dynamic, which means pages are more attractive and interactive. For this JavaScript, VBScript, ASP, JSP, PHP, etc are used.
Following are the differences

Plus Two Computer Application Notes Chapter 4 Web Technology 2

Scripts
Scripts are small programs embedded in the HTML pages.
<script> tag is used to write scripts The attributes used are
Type – To specify the scripting language
Src – Specify the source file

Two types of scripts
1. Client scripts – These are scripts executed by the browser.
Eg: VB Script, Javascript etc.
2. Server scripts – These are scripts executed by the server.
Eg: ASP, JSP, PHP, Perl, etc.

The languages that are used to write scripts are known as scripting languages.

Scripting Languages
a. JavaScript: Java script(developed by Brendan Eich for the Netscape browser) is a platform independent scripting language. Means It does not require a particular browser. That is it runs on any browser hence it is mostly accepted scripting language.
Ajax: It is a technology to take data from the server and filled in the text boxes without refreshing (without reloading the entire page) the web page. Ajax is Asynchronous JavaScript and Extensible Mark up Language (XML). XML is an Extensible Mark up Language, it allows to create our own new tags. This technology uses JavaScript to perform this function. When we turned off JavaScript features in the browser, the Ajax application will not work.

b. VB Script: VB Script(developed by Microsoft) is a platform dependent scripting language. Means it requires a particular browser(MS Internet Explorer) to work that is’why it is not widely accepted scripting language.

c. PHP (PHP Hypertext Preprocessor)

  • It is an open source, general purpose scripting language.
  • It is a server side scripting language
  • Introduced by Rasmus Lendorf
  • A PHP file with extension .php
  • It supports data base programming the default DBMS is MySQL
  • It is platform independent
  • PHP interpreter in Linux is LAMP(Linux, Apache, MySQL, PHP)

d. Active Server Pages (ASP)

  • ASP introduced by Microsoft
  • ASP stands for Active Server Page.
  • ASP’s are web pages that are embedded with dynamic contents, such as text, HTML tags and scripts.
  • An ASP file uses .asp extension.
  • In ASP, the script executes in the server and the effect will be sent back to the client computer.
  • Here a real time communication exists between the client and server.
  • ASP applications are very small.
  • The only server used is Microsoft Internet Information Server(IIS), hence it is platform dependant

e. Java Server Pages (JSP)

  • JSP introduced by Sun Micro System
  • JSP stands for Java Server Page.
  • An JSP file uses .jsp extension
  • It is platform-independent
  • It uses Apache Tomcat webserver
  • JSP binds with Servlets (Servlets are Java codes run in Server to serve the client requests).

Cascading Style Sheet (CSS)
It is a style sheet language used for specifying common format like colour of the text, font, size, etc. other than the HML codes. That is CSS file used to separate HTML content from its style.
It can be written in 3 ways as follows:

  1. Inline CSSIn the body section of the HTML file
  2. Embedded CSS In the head section of the HTML file
  3. Linked CSS A separate file(extemal file, eg. bvm.css) with extension .css and can be linked in the web page

Code reusability(just like a function in C++) is the main advantage of CSS and can be used in all the pages in a website

  • HTML – Hyper Text Markup Language. Used to create webpage.
  • A website is a collection of web pages.
  • It was developed by Tim Berners – Lee in 1980 at CERN.
  • Lynx, a text only browser for unix.
  • Mosaic it is a graphical browser.
  • Netscape’ Navigator, Microsoft Internet Explorer, Opera, Ice Weasel,Mozilla FireFox etc. are dif¬ferent browsers.
  • Java, C#are programming languages used for web applications.
  • HTML files are saved with .htm or .html.
  • A web browser is a piece of software used to view web pages.

Structure of an HTML Document

<HTML>
<HEAD>
<TITLE>
give title to the web page here
</TITLE>
</HEAD>
<BODY>
This is the body section.
</BODY>
</HTML>

Tags are keywords used to define the HTML document. Two types of tags Empty and container. The container tag has both an opening and closing tags. But empty tag has an opening tag only, no closing tag.
Eg: empty tag: <hr>, <br> etc.
container tag: <html>, </html>, etc.

Attributes are parameters used for providing additional information within a tag.

An HTML document has 2 sections. Head section and body section.

Attributes of <HTML> tag
1. Dir – This attribute specifies the direction of text displayed on the webpage, values are ltr(left to right), rtl(right to left)
2. Lang – This attribute specifies the language values are En(English), Hi(Hindi), Ar(Arabic), etc
Eg: <HTML dir=”ltr” lang=”Hi”>

The title tag is given in the head section.

Web page contents are given in the body section.

Attributes of the Body tag.
Bgcolor, Background, Text, Link, ALink, VLink, LeftMargin andTopmargin

Heading Tags(6 tags)
<H1 >,<H2>,<H3>,<H4>,<H5> and <H6>.

<H1> provides big heading and <H6> provides smallest

<HR> is used to draw a horizontal line. Its attributes are size, width, no shade and color.

<BR> is used to break a line.

Six Heading tags are used in HTML <H1 > to <H6>.

<B> to make the content Bold.

<I> to make the content in Italics.

<U> to underline the content.

<S> and <STRIKE> – These two are used for striking out the text

<BIG> To make the text size bigger than the normal text

<SMALL> To make the size smaller than the normal text.

<STRONG> The effect is same as <B> tag. That is to emphasize a block of text

<EM> – The effect is same as <i> tag

<SUB> – create a subscript

<SUP> create a superscript

<BLOCKQUOTE> – It is used to give indentation(giving leading space to a line)

<Q> It is used to give text within double quotes

<PRE> (Preformatted text) – This tag is used to display the content as we entered in the text editor.

<ADDRESS> This tag is used to provide information of the author or owner.

<MARQUEE> – This tag is used to scroll a text or image vertically or horizontally.

Attributes of <MARQUEE>

Height – Sets the height of the Marquee text

Width – Sets the width of the Marquee text

Direction – Specifies the scrolling direction of the text such as up, down, left or right

Behavior- Specifies the type such as Scroll, Slide(Scroll and stop)and altemate(to and fro).
<marquee behavior=”scroirscrollamount=”100″> hello</marquee>
<manquee behavior=”slide” scrollamount=”100″> hello</manquee>
<marquee behavior=”alternate” scrollamount= “100”>hello</manquee>

Scrolldelay – Specifies the time delay in seconds between each jump.

scrollamount- Specifies the speed of the text

loop – This specifies the number of times the marquee scroll. Default infinite.

bgcolor – Specifies the back ground colour.

Hspace – Specifies horizontal space around the marquee

Vspace – Specifies vertical space around the marquee

<Div> – Used to define a section or a block of text with the same format.

Attributes
align – Sets the horizontal alignment. Values are left, right, center and justify
Id – Used to give a unique name
Style – Specify a common style to the content for example
<Font> used to specify the font characteristics. Its attributes are size, face, and color.

Special Characters

Plus Two Computer Application Notes Chapter 4 Web Technology 3

<IMG> tag is used to insert an image. Its important attributes are align, height, width and alt.

Comments are given by using <!– and → symbols.

Plus Two Computer Application Notes Chapter 3 Functions

Kerala State Board New Syllabus Plus Two Computer Application Notes Chapter 3 Functions.

Kerala Plus Two Computer Application Notes Chapter 3 Functions

String handling using arrays: A string is a combination of characters hence char data type is used to store the string. A string should be enclosed in double-quotes. In C++ a variable is to be declared before it is used.Eg. “BVM HSS KALPARAMBU”.

Memory allocation for strings: To store “BVM” an array of char type is used. We have to specify the size. Remember each and every string is end with a null (\0) character. So we can store only size-1 characters in a variable. Please note that \0 is treated as a single character. \0 is also called as the delimiter, char school_name[4]; By this, we can store a maximum of three characters.

Plus Two Computer Application Notes Chapter 3 Functions 1

Consider the following declarations
char my_name[10]=”Andrea”;
char my_name2[]=”Andrea”;
char str[ ]=”Hello World”

In the first declaration 10 Bytes will be allocated but it will use only 6+1 (one for ‘\0’) = 7 Bytes the remaining 3 Bytes will be unused. But in the second declaration the size of the array is not mentioned so only 7 Bytes will be allocated and used hence no wastage of memory. Similarly in the third declaration the size of the array is also not mentioned so only 12( one Byte for space and one Byte for‘\0’) Bytes will be allocated and used hence no wastage of memory.

Input / output operations on strings

Consider the following code

# include<iostream>
using namespace std;
int main()
{
charname[20];
cout<<“Enter your name:”; cin>>name;
cout<<“Hello “<<name;
}

If you run the program you will get the prompt as follows:
Enter your name: Alvis Emerin
The output will be displayed as follows and the “Emerin” will be truncated.
Hello Alvis

This is because of cin statement that will take upto space. Here space is the delimiter. To resolve this gets() function can be used. To use gets() and puts() function the header file stdio.h must be included. gets() function is used to get a string from the keyboard including spaces.
puts() function is used to print a string on the screen. Consider the following code snippet that will take the input including the space.

# include<iostream>
#include<cstdio>
using namespace std;
int main()
{
charname[20];
cout<<“Enter your name:”;
gets(name);
cout<<“Hello”<<name;
}

More console functions
Input functions

Plus Two Computer Application Notes Chapter 3 Functions 2

Output functions

Plus Two Computer Application Notes Chapter 3 Functions 3

Stream functions for I/O operations: Some functions that are available in the header file iostream.h to perform I/O operations on character and strings(stream of characters). It transfers streams of bytes between memory and objects. Keyboard and monitor are considered as the objects in C++.

Input functions: The input functions like get( ) (to read a character from the keyboard) and getline() (to read a line of characters from the keyboard) is used with cin and dot(.) operator.

Plus Two Computer Application Notes Chapter 3 Functions 4

Eg.

# include<iostream>
using namespace std;
int main()
{
char str[80], ch= 'z';
cout<<“enter a string that end with z:”;
cin.getline(str, 80, ch);
cout<<str;
}

If you run the program you will get the prompt as follows:
Enter a string that end with z: Hi I am Jobi. I am a teacherz. My school is BVM HSS
The output will be displayed as follows and the string after ‘z’ will be truncated.
Hi I am Jobi. I am a teacher

Output function: The output functions like put() (to print a character on the screen) and write() (to print a line of characters on the screen) is used with cout and dot(.) operator.

Plus Two Computer Application Notes Chapter 3 Functions 5

Complex programs are divided into smaller subprograms. These subprograms are called functions.
Eg. main(), clrscr(), sqrt(), strlen(),…

Concept of modular programming: The process of converting big and complex programs into smaller programs is known as modularisation. These small programs are called modules or subprograms or functions. C++ supports modularity in programming called functions.

Merits of modular programming

  • It reduces the size of the program
  • Less chance of error occurrence
  • Reduces programming complexity
  • Improves reusability

Demerits of modular programming
While dividing the program into smaller ones extra care should be taken otherwise the ultimate result will not be right.

Functions in C++
Some functions that are already available in C++ are called pre defined or built in functions.
In C++, we can create our own functions for a specific job or task, such functions are called user-defined functions.
A C++ program must contain a mainO function. A C++ program may contain many lines of statements(including so many functions) but the execution of the program starts and ends with main() function.

Predefined functions
To invoke a function that requires some data for performing the task, such data is called parameter or argument. Some functions return some value back to the called function.

String functions
To manipulate string in C++ a header file called string.h must be included.
a) strlen() – to find the number of characters in a string(i.e. string length).
Syntax: strlen(string);
Eg.
cout<<strlen(“Computer”); It prints 8.

b) strcpy() – It is used to copy the second string into the first string.
Syntax: strcpy(string1, string2);
Eg.
strcpy(str, “BVM HSS”);
cout<<str; It prints BVM HSS.

c) strcat() – It is used to concatenate the second string into first one.
Syntax: strcat(string1, string2)
Eg.
strcpy(str1, “Hello”);
strcpy(str2, “World”);
strcat(str1, str2);
cout<<str1; It displays the concatenated string “Hello World”

d) strcmp() – it is used to compare two strings and returns an integer.
Syntax: strcmp(string1, string2)

  • if it is 0 both strings are equal.
  • if it is greater than 0(i.e. +ve) stringl is greater than string2
  • if it is less than 0(i.e. -ve) string2 is greater than string1

Eg.

#include<iostream>
#include<cstring>
using namespace std;
int main()
{
char str1[10], str2[10];
strcpy(str1, “Kiran”);
strcpy(str2, “Jobi”);
cout<<strcmp(str1, str2);
}

It returns a +ve integer.

e) strcmpi() – It is same as strcmp() but it is not case sensitive. That means uppercase and lowercase are treated as same.
Eg. “ANDREA” and “Andrea” and “andrea” these are same.

#include<iostream>
#include<cstring>
using namespace std;
int main()
{
char str1[10], str2[10];
strcpy(str1, "Kiran”);
strcpy(str2, "KIRAN”);
cout<<strcmpi(str1, str2);
}

It returns 0. That is both are the same.

Mathematical functions.
To use mathematical functions a header file called math.h must be included
a) abs() – To find the absolute value of an integer.
Eg. cout<<abs(-25); prints 25.
cout<<abs(+25); prints 25.

b) sqrt() – To find the square root of a number.
Eg. cout<<sqrt(49); prints 7.

c) pow() – To find the power of a number.
Syntax. pow(number1, number2)
Eg. cout<<pow(2, 10); It is equivalent to 210. It prints 1024.

Character functions
To manipulate the character in C++ a header file called ctype.h must be included.
a) isupper() – To check whether a character is in uppercase or not. If the character is in uppercase it returns a value 1 otherwise it returns 0.
Syntax: isupper(char ch);

b) islower() – To check whether a character is in lowercase or not. If the character is in lowercase it returns a value 1 otherwise it returns 0.
Syntax: islower(char ch);

c) isalpha() – To check whether a character is an alphabet or not. If the character is an alphabet it returns a value 1 otherwise it returns 0.
Syntax: isalpha(char ch);

d) isdigit() – To check whether a character is a digit or not. If the character is a digit it returns a value 1 otherwise it returns 0.
Syntax: isdigit(char ch);

e) isalnum() – To check whether a character is an alphanumeric or not. If the character is an alphanumeric it returns a value 1 otherwise it returns 0.
Syntax: isalnum(char ch);

f) toupper() – It is used to convert the given character into uppercase.
Syntax: toupper(char ch);

g) tolower() – It is used to convert the given character into lowercase.
Syntax: tolower(char ch);

User defined functions

Syntax:

Return type Function_name(parameter list)
{
Body of the function
}
  1. Return type: It is the data type of the value returned by the function to the called function;
  2. Function name: A name given by the user.

Different types of User-defined functions.

  1. A function with arguments and return type.
  2. A function with arguments and no return type.
  3. A function with no arguments and with the return type.
  4. A function with no arguments and no return type.

Prototype of functions

Consider the following codes

Method 1

# include<iostream>
using namespace std;
int sum(int n1, int n2)
{
return(n1+n2);
}
int main()
{
int n1, n2;
cout<<“Enter 2 numbers:”; cin>>n1>>n2;
cout<<“The sum is “<<sum(n1, n2);
}

Method 2

#include<iostream>
using namespace std;
int main()
{
int n1, n2;
cout<<“Enter 2 numbers:”; cin>>n1>>n2;
cout<<“The sum is “<<sum(n1, n2);
}
int sum(int n1, int n2)
{
retum(n1+n2);
}

In method 1 the function is defined before the main function. So there is no error.
In method 2 the function is defined after the main function and there is an error called “function sum should have a prototype”. This is because the function is defined after the main function. To resolve this a prototype should be declared inside the main function as follows.

Method 2

# include<iostream>
using namespace std;
int main()
{
int n1, n2;
int sum(int, int);
cout<<“Errter 2 numbers:"; cin>>n1>>n2;
cout<<“The sum is “<<sum(n1, n2);
}
int sum(int n1, int n2)
{
return(n1+n2);
}

Functions with default arguments
We can give default values as arguments while declaring a function. While calling a function the user doesn’t give a value as arguments the default value will be taken. That is we can call a function with or without giving values to the default arguments.

Methods of calling functions: Two types call by value and call by reference.
1. Call by value: In the call by value method, the copy of the original value is passed to the function, if the function makes any change will not affect the original value.
2. Call by reference: In the call by reference method, the address of the original value is passed to the function, if the function makes any change will affect the original value.

Scope and life of variables and functions
a) Local scope – A variable declared inside a block can be used only in the block. It cannot be used in any other block.
Eg.

#include<iostream>
using namespace std;
int sum(int n1, int n2)
{
int s;
s=n1+n2;
return(s);
}
int main()
{
int n1, n2;
cout<<“Enter 2 numbers:"; cin>>n1>>n2;
cout<<“The sum is “<<sum(n1, n2);
}

Here the variable s is declared inside the function sum and has a local scope;

b) Global scope – A variable declared outside of all blocks can be used anywhere in the program.

# include<iostream>
using namespace std;
int s;
int sum(int n1, int n2)
{
s=n1+n2;
return(s);
}
int main()
{
int n1, n2;
cout<<“Enter 2 numbers:"; cin>>n1>>n2;
cout<<“The sum is “<<sum(n1, n2);
}

Here the variable s is declared outside of all functions and we can use variable s anywhere in the program.

Plus Two Computer Application Notes Chapter 2 Arrays

Kerala State Board New Syllabus Plus Two Computer Application Notes Chapter 2 Arrays.

Kerala Plus Two Computer Application Notes Chapter 2 Arrays

An array is a collection of elements with same data type Or with the same name we can store many elements, the first or second or third etc can be distinguished by using the index(subscript). The first element’s index is 0, the second element’s index is 1, and so on.

Declaring arrays
Suppose we want to find the sum of 100 numbers then we have to declare 100 variables to store the values. It is laborious work. Hence the need for an array arises.

Syntax: data_type array_name[size];

To store 100 numbers the array declaration is as follows
int n[100]; By this, we store 100 numbers. The index of the first element is 0 and the index of last element is 99.

Memory allocation for arrays
The amount of memory requirement is directly related to its type and size.
int n[100]; It requires 2 Bytes (for each integer)*100 = 200 Bytes.
float d[100]; It requires 4 Bytes(for each float)*100 = 400 Bytes.

Array initialization
Array can be initialized in the time of declaration.
Eg. int age[4] = {16, 17, 15, 18};

Accessing elements of arrays
Normally loops are used to store and access elements in an array.
Eg.

int mark[50], i;
for(i=0; i<50; i++)
{
cout<<“Enter value formark”<<i+1; cin>>mark[i];
}
cout<<“The marks are given below:’’;
for(i=0; i<50; i++)
cout<<mark[i];

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming

Kerala State Board New Syllabus Plus Two Computer Application Notes Chapter 1 Review of C++ Programming.

Kerala Plus Two Computer Application Notes Chapter 1 Review of C++ Programming

It is developed by Bjame Stroustrup. It is an extension of C Language.

Character set: To study a language first we have to familiarize the character set. For example to study English language first we have to study the alphabets. Similarly here the character set includes letters (A to Z & a to z), digits (0 to 9), special characters(+, -, ?, *, /, …….) white spaces(non printable) etc….

Token: It is the smallest individual units similarto a word in English or Malayalam language. C++ has 5 tokens
1. Keywords: These are reserved words for the compiler. We can’t use for any other purposes.
Eg: float is used to declare variable to store numbers with decimal point. We can’t use this for any other purpose

2. Identifier: These are user defined words.
Eg: variable name, function name, class name, object name etc…

3. Literals (Constants): Its value does not change during execution
i. Integer literals : Whole numbers without fractional parts are known as integer literals, its value does not change during execution. There are 3 types decimal, octal and hexadecimal.
Eg. For decimal 100, 150, etc
For octal 0100, 0240, etc
For hexadecimal 0x100, 0x1A, etc

ii. Float literals: A number with fractional parts and its value does not change during execution is called floating point literals.
Eg. 3.14157, 79.78, etc..

iii. Character literal: A valid C++ character enclosed in single quotes, its value does not change during execution.
Eg. ‘m’, ‘f’, etc…

iv. String literal: One or more characters enclosed in double quotes is called string constant. A string is automatically appended by a null character (‘\0’)
Eg. “Mary’s”, “India”, etc

4. Punctuators: In English or Malayalam language punctuation marks are used to increase the readability but here it is used to separate the tokens. Eg: {,}, (,),

5. Operators: These are symbols used to perform an operation (Arithmetic, relational, logical, etc…)

Integrated Development Environment(IDE): It is used for developing programs

  • It helps to write as well as editing the program.
  • It helps to compile the program and linking it to other (header files and another user) programs
  • It helps to run the program

Turbo C++ IDE
Following is a C++ IDE

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 1

a) Opening the edit window
Method I: File → Click the menu item
New Method II: Press Alt and F simultaneously then press N
b) Saving the program:
Click File → Save or Press Function key F2 or Alt + F and then press S
Then give a file name and press ok.
c) Running/executing the program
Press Alt + R then press R OR Click Run → press R, OR Press Ctrl + F9
d) Viewing the output: Press Alt + F5
e) Closing Turbo C++ IDE
Click File → then press Quit menu Or Press Alt + X

Geany IDE

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 2

Step 1: Take Geany Editor and type the program(source code)
Step 2: Save the file with the extension.cpp
Step 3: Compile the program by Click the Compile Option
Step 4: After successful compilation, Click the Build option
Step 5: Then click on the Execute option

Important Notes while using Geany Editor

1. For the header files .h extension need not given
2. Header files are given below

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 3

3. Add a new statement using namespace std; after the preprocessor
4. Instead of void main() use int main();

Let us see the following to distinguish the editor’s Turbo C++ and Geany

1. Write a C++ program to read a number and print.

Using Turbo C++ editor

#include
#include
int main()
{
clrscr();
int a;
cout<<“Enter a number”; cin>>a;
cout<<“The number you entered is ”<<a;
getch();
}

To compile and press Ctrl+F9.

Using Geany editor

#include
using namespace std;
int main()
{
int a;
cout<<“Enter a number”; cin>>a;
cout<<“The number you entered is ”<<a;
}

Type the above and save it as a file name with .cpp.
Compile, Build and then Execute

Concepts of data types: The nature of data is different, data type specifies the nature of data we have to store.

C++ data types

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 4

Fundamental data types: It is also called a built-in data type. They are int, char, float, double and void
i) int data type: It is used to store whole numbers without fractional (decimal point) part. It can be either negative or positive. It consumes 2 bytes(16 bits) of memory.i.e. 216 = 65536 numbers. That is 32768 negative numbers and 32768 positive numbers(0 is considered as +ve ) So a total of 65536 (32768+32768) numbers. We can store a number in between -32768 to + 32767.

ii) char data type: Any symbol from the key ‘ board, eg. ‘A’, ‘?’, ‘9’,…. It consumes one byte (8 bits) of memory. It is internally treated as integers, i.e. 28 = 256 characters. Each character is having an ASCII code, ‘a’ is having ASCI I code 97, and zero is having ASCII code 48.

iii) float data type: It is used to store real numbers i.e. the numbers with a decimal points. It uses 4 bytes(32 bits) of memory.
Eg. 67.89, 89.9 E-15.

iv) double data type: It is used to store very large real numbers. It uses 8 bytes(64 bits) of memory.

(v) void data type: void means nothing. It is used to represent a function that returns nothing.

User-defined Data types: C++ allows programmers to define their own data type. They are Structure(struct), enumeration(enum), union, class, etc.

Derived data types: The data types derived from fundamental data types are called Derived data types. They are Arrays, pointers, functions, etc

Variables:
The named memory locations are called variables. A variable has three important things

  1. variable name: A variable should have a name
  2. Memory address: Each and every byte of memory has an address. It is also called the location (L) value.
  3. Content: The value stored in a variable is called content. It is also called Read(R) value.

Operators: An operator is a symbol that performs an operation. The data on which operations are carried out are called operands. Following are the operators
1) Input (>>) and output (<<) operators are used to performing input and output operations. Eg. cin >> n;
cout << n;

2) Arithmetic operators: It is a binary operator. It is used to perform addition(+), subtraction(-), division (/), multiplication(*) and modulus(%-gives the remainder) operations.
Eg. If x = 10 and y = 3 then

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 5

x/y = 3, because both operands are integer. To get the floating-point result one of the operands must be float.

3) Relational operator: It is also a binary operator. It is used to perform comparison or relational operation between two values and it gives either true (1) or false(0). The operators are <, <=, >, >=, == (equality) and != (not equal to)

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 6

4) Logical operators: Here AND(&&), OR(||) are binary operators, and NOT(!) is a unary operator.
It is used to combine relational operations and it gives either true (1) or false (0).
If x = 1 and y = 0 then

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 7

Both operands must be true to get a true value in the case of AND (&&) operation.
If x = 1 and y = 0 then

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 8

Either one of the operands must be true to get a true value in the case of OR(||) operation
If x = 1 and y = 0 then

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 9

5) Conditional operator: It is a ternary operator hence it needs three operands. The operator is ?:.
Syntax: expression ? value if true : value if false.
First evaluates the expression if it is true the second part will be executed otherwise the third part will be executed.
Eg. If x = 10 and y = 3 then
x > y ? cout<<x; cout<<y
Here the output is 10

6) sizeof(): This operator is used to find the size used by each data type.
Eg. sizeof(int) gives 2.

7) Increment and decrement operator: These are unary operators.
a) Increment operator (++): It is used to increment the value of a variable by one i.e., x++ is equivalent to x = x + 1;
b) Decrement operator (–): It is used to decrement the value of a variable by one i.e., x– is equivalent to x = x – 1.

8) Assignment operator (=): It is used to assign the value of the right side to the left side variable.
eg. x = 5; Here the value 5 is assigned to the variable x.

Expressions: It is composed of operators and operands

Arithmetic expression: It is composed of arithmetic operators and operands. In this expression the operands are integers then it is called the Integer expression. If the operands are real numbers then it is called Floating point expression. If the operands are constants then it is called constant expression.

Relational expression: It is composed of relational operators and operands.

Logical expression: It is composed of logical operators and operands

Statements: Statements are the smallest executable unit of a programming language. Each and every statement must end with a semicolon(;).

Declaration statement: Each and every variable must be declared before using it.
Eg: int age;

Assignment statements: The assignment operator is used to assign the value of RHS to LHS.
Eg: x = 100;

Input statements:
input(>>) operator is used to perform input operation. Eg. cin>>n;

Output statements
output(<<) operator is used to perform output operation.
Eg. cout<<n;

Cascading of I/O operations
The multiple uses of input or output operators in a single statement is called Cascading of i/o operators.
Eg: To take three numbers by using one statement is as follows
cin>>x>>y>>z;
To print three numbers by using one statement is as follows
cout<<x<<y<<z;

Structure of a C++ program:
A typical C++ program would contain four sections as shown below.
Include files(Preprocessor directives)
Function declarations
Function definitions
Main function programs
Eg:

# include
using namespace std;
int sum(int x, int y)
{return (x+y);}
intmain()
{
cout<<sum(2, 3);
}

Preprocessor directives: A C++ program starts with the preprocessor directive i.e., # include, #define, #undef, etc, are such a preprocessor directive. By using #include we can link the header files that are needed to use the functions. By using #define we can define some constants.
Eg. #define x 100. Here the value of x becomes 100 and cannot be changed in the program.
No semicolon is needed.

Header files:
header files: A header file is a pre-stored file that helps to use some operators and functions. To write C++ programs the header files are a must. Following are the header files used in Geany editor.
iostream
cstdio
cctype
cmath
cstring
cstdlib
The syntax for including a header file is as follows
#include<name of the header file>
Eg. #include<iostream>

The main function: The main function is the first function which is invoked at the time of execution and the program ends within main(). The other functions are invoked from main().

Programming tips:
The identifier name must be clear, precise, brief, and meaningful
Use clear and simple expressions.
Use comments wherever needed.
To give tips in between the program comments are used. A comment is not considered as the part of the program and cannot be executed. There are 2 types of comments single line and multiline. Single line comment starts with //(2 slashes) but multi-line comment starts with /* and ends with */
indentation: Giving leading spaces to the statements is called indentation. It is a good programming practice.

Variable initialisation: Giving value to a variable at the time of declaration.
Eg: intage=16; Here the OS allocates 4 bytes memory for the variable age and it stores a value 16.

const-The access modifier: By using the keyword const we can create symbolic constants its value does not change during execution.
Eg: const int bp=100;

Type modifiers: With the help of type modifiers we can change the sign and range of data with same size. The important modifiers are signed, unsigned, long and short

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 10

Shorthands in C++

Arithmetic assignment operators: It is faster. This is used with all the arithmetic operators as follows.

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 11

a) Increment operator(++): It is used for incrementing the content by one.
++x(pre increment) and x++ (post increment) both are equivalent to x = x + 1.

b) decrement operator (–): It is used for decrementing the content by one.
–x (pre decrement) and x– (post decrement) both are equivalent to x = x – 1.

Prefix form: In this, the operator is placed before the operand and the operation is performed first then use the value.

Postfix form: In this, the operator is placed after the operand and the value of the variable is used first then the operation is performed
Eg: Post increment a++
Here first use the value of ‘a’ and then change the value of ‘a’.
Eg: if a=10 then b=a++.
After this statement b=10 and a=11

Pre increment ++a
Here first change the value of a and then use the value of a.
Eg: if a=10 then b=++a.
After this statement b=11 and a=11.

Precedence of operators: Consider a situation where an expression contains all the operators then the operation will be carried in the following order(priority)

Plus Two Computer Application Notes Chapter 1 Review of C++ Programming 12

Type conversion: Type conversions are of two types.
1) Implicit type conversion: This is performed by the C++ compiler internally. C++ converts all the lower sized data type to the highest sized operand. It is known as type promotion. Data types are arranged lower size to higher size is as follows, unsigned int(2 bytes), int(4 bytes), long (4 bytes), unsigned long (4 bytes), float(4 bytes), double(8 bytes), long double(10 bytes)

2) Explicit type conversion: It is known as typecasting. This is done by the programmer. The syntax is given below.
(data type to be converted) expression
Eg. int x=10;
(float) x;
This expression converts the data type of the variable from integer to float.
These are classified into two decision making and iteration statements

Decision-making statements:

if statement:

Syntax: if (condition)
{
Statement block;
}

First, the condition is evaluated if it is true the statement block will be executed otherwise nothing will be happened.

if… else statement:

Syntax:

if (condition)
{
Statement block1;
}
Else
{
Statement block2;
}

Nested if
An if statement contains another if statement completely then it is called nested if.

if (condition 1)
{
if (condition 2)
{
Statement block;
}
}

The statement block will be executed only if both the conditions evaluated are true.

The else if ladder: The syntax will be given below:

if (expression 1)
{
statement block1;
}
else if (expression 2)
{
statement block 2;
}
else if (expression 3)
{
statement block 3;
}
..............
else
{
statement block n;
}

Here firstly, expression 1 will be evaluated if it is true only the statement block1 will be executed otherwise expression 2 will be evaluated if it is true only the statement block2 will be executed and so on. If all the expression evaluated is false then only statement block n will be executed.

switch statement:
It is a multiple branch statement. Its syntax is given below.

switch(expression)
{
case value: statements;break;
case value: statements;break;
case value: statements;break;
case value: statements;break;
case value: statements;break;
...............................
default: statements;
}

The first expression evaluated and selects the statements with the matched case value. If all values are not matched the default statement will be executed.

Conditional operator: It is a ternary operator hence it needs three operands. The operator is ?:.
Syntax: expression ? value if true : value if false.
First evaluates the expression if it is true the second part will be executed otherwise the third part will be executed.

Iteration statements: If we have to execute a block of statements more than once then iteration statements are used.

while statement: It is an entry controlled loop. An entry controlled loop first checks the condition and executes (or enters into) the body of the loop only if it is true. The syntax is given below:

Loop variable initialised
while(expression)
{
Body of the loop;
Update loop variable;
}

Here the loop variable must be initialised before the while loop. Then the expression is evaluated if it is true then only the body of the loop will be executed and the loop variable must be updated inside the body. The body of the loop will be executed until the expression becomes false.

for statement
The syntax of for loop is

for(initialization; checking; update loop variable)
{
Body of loop;
}

The first part, initialization is executed once, then checking is carried out if it is true the body of the for loop is executed. Then the loop variable is updated and again checking is carried out this process continues until the checking becomes false. It is an entry controlled loop.

do-while statement: It is an exit controlled loop. Exit control loop first executes the body of the loop once even if the condition is false then checks the condition.

do
{
Statements
}while(expression);

Here the body executes at least once even if the condition is false. After executing the body it checks the expression if it false it quits the body otherwise the process will continue.

Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part II Chapter 6 Open Economy Macroeconomics.

Kerala Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics

Question 1.
Indian Economy is having a deficit of Balance of Payment Account. Suggest some measures to improve its balance of payment position. (MARCH-2008)
Answer:
Measures to improve balance of payment deficit are given below:
1) Devaluation of rupee
2) Control of inflation
3) Promotional measures
4) Tariff and quota restrictions
5) Reduction of imports
6) Provision of incentives

Question 2.
Correct the following statements if necessary. (MARCH-2009)
1) Balance of payment at current account rate to both visible and invisible trade.
2) International trade is trade within the boundaries of a country.
3) The theory of comparative cost advantage is stated by David Ricardo
Answer:
1) True/ Correct
2) False. International trade means trade between two or more countries or internal trade is the trade within the boundaries of a country.
3) True/Correct

Question 3.
Devaluation of domestic currency will enable an economy to overcome deficit in balance of payments. Do you agree with the statement? Justify your answer. (JUNE-2009)
Answer:
Yes. I agree with this statement. Because, when there is deficit in balance of payment, the domestic currency is devalued. This will increase our exports and reduce imports. As a result of increased export and less imports, the deficit in balance of payment can be solved.

Question 4.
If C = 0.8 and M = 0.3
a) Calculate open economy and closed economy multiplier. (MARCH-2010)
b) If domestic autonomous demand increases by 100, what will be multiplier effect on output in both economy?
c) Elucidate the result.
Answer:
i) Open economy multiplier
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 1
ii) Closed economy multiplier
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 2
b) Multiplier effect of output on closed economy
5 x 100 = 500
Multiplier effect of output on open economy,
2 x 100 = 200

Question 5.
The following table shows the total cost schedule of a competitive firm. It is given that the price of the . good is ₹15. (MARCH-2010)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 3
Answer:
a)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 4
b) The profit maximising level of outputs is ₹6, where the difference between TR and TC is highest.

Question 6.
Mr. Sudheer converted rupees into dollar, he got 20 dollars in exchange of ₹1,000. (JUNE-2010)
a) Calculate profit at each level of output.
b) Find the profit maximising level of output.
Answer:
a) Exchange rate
b) Real exchange rate is the relative price of foreign goods in terms of domestic goods. It is equal to the nominal exchange rate times the foreign price level divided by the domestic price level. When the real exchange rate is equal to one, the two countries are said to be in purchasing power parity.

Question 7.
An Imaginary Balance of Payment situation is given in the table. (JUNE-2010)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 5
a) Find out the trade balance, explain the concept.
b) Calculate the Current Account Balance, comment about the figure.
Answer:
a) Export-Import =12801 -19103
= – 6302
b) 998

Question 8.
Economics are classified into open and closed economics. Distinguish between open and closed economy with an example. (MARCH-2011)
Answer:
An open economy is one which has trade relationship with rest of the world.
Eg: A country with exports (India export rubber). On the other hand a closed economy is one which has not trade relation with rest of the world.
Eg: A country which has no exports or imports.

Question 9.
If a toy costs ₹10 in America and exchange rate is at 45 per U.S. dollar, what is the price of this toy in Indian currency? (MARCH-2011)
Answer:
₹450

Question 10.
If inflation is higher in country ‘A’ than in country ‘B’ and the exchange rate between the two countries is fixed, what is likely to happen to the trade balance between the two countries? Justify your answer. (MARCH-2012)
Answer:
When there is inflation, the domestic currency of country A’will depreciate. Depreciation of domestic currency will lead to increase in export and decrease in import. But this will depend on the elasticity of export and import. If the sum of export and import elasticities is greater than T, there will be positive effect on trade balance. However, in short run the elasticities are supposed to be less than T and therefore there may be negative effect on trade balance. The ultimate effect depends on the composition of trade items.

Question 11.
Compare the following graphs and explain the positions of economy that the diagrams represent. Suggest measures to correct these situations. (MARCH-2012)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 6
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 7
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 8
Excess demand

  • Increase taxes
  • Decrease Government expenditure
  • Reduce deficit financing
  • Increase public borrowing

Deficient demand

  • Decrease taxes
  • Increase government expenditure
  • Increase deficit financing
  • Reduce public borrowing

Question 12.
Among the following, identify the concepts (JUNE-2014)
i) Trade deficit
ii) Budget deficit
a) G + T
b) T + X
c) G-T
d) G + M
e) X-M
f) X+M
Answer:
i) e) X-M
ii) c) G-T

Question 13.
Fill appropriately. (JUNE-2014)
a) Domestic demand for foreign goods leads to ______
b) The tiny production unit is referred as ________
c) The expenses that raise productive capacity is called ________
Answer:
a) import
b) firm
c) investment expenditure

Question 14.
Distinguish nominal exchange rate and real exchange rate. (JUNE-2014)
Answer:
The price of one currency in terms of the other is . known as the exchange rate. Nominal exchange rates are bilateral in the sense that they are exchange rates for one currency against another and they are nominal because they quote the exchange rate in money terms, i.e. so many rupees per dollar or per pound. However, the real exchange rate is the ratio of foreign to domestic prices, measured in the same currency. It is defined as Real exchange rate = ePf / P where P and Pf are the price levels here and abroad, respectively, and e is the rupee price of foreign exchange (the nominal exchange rate).
The real exchange rate is often taken as a measure of a country’s international competitiveness. Therefore, real exchange rate is considered to be more relevant.

Question 15.
Write down the national income identify for an open economy with due explanation of the terms used. (JUNE-2014)
Answer:
National income identity for an open economy
In a closed economy, there are three sources of demand for domestic goods – Consumption (C), government spending (G), and domestic investment (I).
We can write Y =C+ l + G
In an open economy, exports (X) constitute an additional source of demand for domestic goods and services that comes from abroad and therefore must be added to aggregate demand. Imports (M) supplement supplies in domestic markets and constitute that part of domestic demand that falls on foreign goods and services. Therefore, the national income identity for an open economy is
Y+M = C + I + G + X
Rearranging, we get
Y = C + I + G + X-M or
Y = C + I + G + NX
where, NX is net exports (exports – imports). A positive NX (with exports greater than imports) implies a trade surplus and a negative NX (with imports exceeding exports) implies a trade deficit.

Question 16.
Differentiate between: (JUNE-2014)
i) Currency Devaluation and
ii) Currency Depreciation
Answer:
Devaluation means increase in exchange rate. Devaluation is said to occur when the exchange rate is increased by social action under a pegged exchange rate system. Devaluation is used as a tool to bridge the gap of trade deficit.
On the other hand, change in the price of foreign exchange under flexible exchange rate, when it becomes cheaper as compared to domestic currency is known as depreciation.

Question 17.
Two National Income identities are shown below: (MARCH-2015)
i) Y = C + I + G
ii) Y = C + I + G + X – M
a) Pick out the National Income identity for an open economy.
b) If marginal propensity to consume (C) = 0.5 and marginal propensity to import (M) = 0.3, prove that the open economy multiplier is smaller than that of the closed economy
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 9
the multiplier in closed economy is 2 and open economy is 1.25.

Question 18.
The economic principle of exchange rate determination are different in different systems. Write in one or two sentences how the exchange rate is determined under:  (MARCH-2015)
a) Flexible Exchange rate system
b) Fixed Exchange rate system
c) Managed floating Exchange rate system.
Answer:
a) A country’s exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency relative to other currencies. Thus, floating exchange rates change freely and are determined by trading in the for ex market. This is in contrast to a “fixed exchange rate” regime.

b) Fixed Exchange Rate’ A country’s exchange rate regime under which the government or central bank ties the official exchange rate to another country’s currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country’s currency value within a very narrow band. Also known as pegged exchange rate.
In a fixed exchange-rate system, a country’s central bank typically uses an open market mechanism and is committed at all times to buy and/or sell its currency at a fixed price in order to maintain its pegged ratio and, hence, the stable value of its currency in relation to the reference to which it is pegged. The central bank provides the assets and/or the foreign currency or currencies which are needed in order to finance any payments imbalances.

c) Managed float regime is the current international financial environment in which exchange rates fluctuate from day to day, but central banks attempt to influence their countries exchange by buying and selling currencies. It is also known as a dirty float.
Managed float exchange rates are determined in the foreign exchange market. Authorities can and do intervene, but are not bound by any intervention rule.
Often accompanied by a separate nominal anchor, such as inflation target. The arrangement provides a way to mix market-determined rates with stabilizing intervention in a non-rule-based system. Its potential drawbacks are that it doesn’t place hard constraints on monetary and fiscal policy. It suffers from uncertainty from reduced credibility, relying on the credibility of monetary authorities. It typically offers limited transparency.

Question 19.
Differentiate between fixed and floating exchange rates.  (MAY-2015)
Answer:
In a system of flexible exchange rates (also known as floating exchange rates), the exchange rate is determined by the forces of market demand and supply.
Countries have had flexible exchange rate system ever since the breakdown of the Bretton Woods system in the early 1970s. Prior to that, most countries had fixed or what is called pegged exchange rate system, in which the exchange rate is pegged at a particular level. Sometimes, a distinction is made between the fixed and pegged exchange rates.
Under a fixed exchange rate system, such as the gold standard, adjustment to BOP surpluses or deficits cannot be brought about through changes in the exchange rate.

Question 20.
Give one-word for the following:  (MAY-2015)
The price of one unit of foreign currency in terms of domestic currency.
Answer:
Exchange rate

Question 21.
Explain Balance of Payments (BOP). What do you mean by balance of payment surplus and balance of payment deficit?  (MAY-2015)
Answer:
Balance of trade is the record of a country’s visible export and visible imports. It includes only visible trade and excludes invisible trade of services. However, balance of payment is a more comprehensive term which denoted a country’s total monetary transactions with the rest of the world. It includes both visible and invisible trade of goods and services.
The balance of payments (BOP) records the transactions in goods, services and assets between residents of a country with the rest of the world. There are two main accounts in the BOP – the current account and the capital account.
When the total receipt is larger than the payment the balance of payment is said to be surplus. On the other hand when payments are larger than receipts, balance of payments is said to be deficit.

Question 22.
Differentiate:  (MARCH-2016)
a) Currency devaluation
b) Currency depreciation
Answer:
a) Currency devaluation: It is the deliberate reduction of the value of domestic currency in terms of a foreign currency.
b) Currency depreciation: It is the reduction in the value of domestic currency due to the operation of supply for money and demand for money.

Question 23.
Write a note on fixed exchange rate and floating exchange rate.  (MAY-2016)
Answer:
In a system of flexible exchange rates (also known as floating exchange rates), the exchange rate is determined by the forces of market demand and supply.
Countries have had flexible exchange rate system ever since the breakdown of the Bretton Woods system in the early 1970’s. Prior to that, most countries had fixed or what is called pegged exchange rate system, in which the exchange rate is pegged at a particular level. Sometimes, a distinction is made between the fixed and pegged exchange rates.
Under a fixed exchange rate system, such as the gold standard, adjustment to BOP surpluses or deficits cannot be brought about through changes in the exchange rate.

Question 24.
The relative price of foreign goods in terms of domestic goods is _____ (MAY-2016)
a) The nominal exchange rate
b) The real exchange rate
c) Floating exchange rate
d) All of the above
Answer:
The real exchange rate

Question 25.
Explain the working of a pegged exchange rate system with suitable diagram. (MARCH-2017)
Answer:
Fixed exchange rate is also known as pegged exchange rate system. Under this system, the exchange rate will be determined by central bank. The intervention made in the foreign exchange market by the central bank to keep exchange rate fixed is known as pegging. This can be explained with the help of diagram. Which is given below.
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics 10
Here e* is the market determined exchange rate. Suppose that government fixes exchange rate as e1 At e, exchange rate the demand for foreign exchange is greater than the supply of foreign exchange. If there is no.control over exchange rate. It will increase to e*. In order to maintain the exchange rate at e1 the central bank will sell AB amount of foreign exchange in the market. So the exchange will be maintained at e*.
Suppose that the central bank fixes the exchange rate e2. If there is no central bank intervention in the market the exchange rate will fall to e*. In order to maintain the exchange rate at e2 the central bank will purchase CD amount of foreign exchange from the market. Thus fixed exchange rate is maintained.

Question 26.
Differentiate between Devaluation and Depreciation. (MARCH-2017)
Answer:
Devalution: Lowering of the value of domestic currency through official procedure by the central bank under fixed exchange rate system is known as currency devaluation.
Depreciation: The loss in the value of domestic currency when exchanged with foreign currency under flexible exchange rate system is known as currency depreciation.

Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 5 The Government: Budget and The Economy

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part II Chapter 5 The Government: Budget and The Economy.

Kerala Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 5 The Government: Budget and The Economy

Question 1.
Keynes suggested a deficit budget for a developing economy but classical economists supported a surplus budget. (MARCH-2008)
a) Differentiate the two concepts of budget.
b) What is your opinion? Justify your answer.
Answer:
a) Deficit budget and Surplus budget.
When the proposed expenditure is greater than the expected revenue, the budget is said to be deficient. On the other hand, when the proposed expenditure is less than the expected revenue, the budget is said to be a surplus one.
b) I do agree with the opinion of Keynes. Because in a developing economy govt, will have to make so many developmental activities for the welfare of the society. In such a situation, a deficit budget is possible and it will become unavoidable.

Question 2.
discretionary and non-discretionary.  (MARCH-2009)
a) Progressive Income Tax
b) Unemployment allowances
c) Public Expenditure programme.
d) Public borrowing
Answer:

DiscretionaryNon-discretionary
Public expenditure programmeProgressive income tax
Public borrowingUnemployment allowance

Question 3.
In the present world, the budget is an important instrument of government policy. One of the objectives of the budget is given below. Supplement the other objectives. (MARCH-2008)
Redistribution of Income and Wealth
Answer:

  • Reallocation of resources
  • Stabilisation of economy
  • Management of public enterprises
  • Execution of plans
  • Control of public fund

Question 4.
Classify the followings into tax revenue and non-tax revenue: (MARCH-2008)
Personal Income Tax, Excise duty, Import duty, License Fee, Surplus from Public Enterprise, Escheat.
Answer:

Tax RevenueNon – Tax Revenue
Personal Income TaxLicense Fee
Excise DutyEscheat
Import DutySurplus from public enterprises

Question 5.
In a developed economy Keynesian budgetary policy is more effective compared to classical budgetary policy. Can you agree with this statement? Justify your answer. (JUNE-2009)
Answer:
Yes. I agree with this statement. Because in the developed economy the role of government and the private sector is more desirable. There will be situations of the business cycle in such economies. General overproduction and underproduction are common features. On such occasions, the classical policy will not properly work. Keynesian ideas will help the proper functioning of the developed economies.

Question 6.
Complete the following chart: (MARCH-2010)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 5 The Government Budget and The Economy 1
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 5 The Government Budget and The Economy 2

Question 7.
A glance at the Union Budget of 2009 reveals that there is a fiscal deficit of 6.8% of GDP as compared to 6% last year. What are the various measures used for deficit reduction? (JUNE-2010)
Answer:
If the government increases taxes or decreases expenditure then the fiscal deficit gets reduced. Indian government is trying to reduce the fiscal deficit by increasing tax revenue by selling the share of PSUs and by reducing the government expenditure. The deficit reduction influences the different sectors of an economy in different ways.
The government is trying to fill the gap of reduced fiscal deficit by making government activities more efficient through better planning of programmes and better administration.
The cutting back government programmes in vital areas like agriculture, education, health, poverty alleviation has adverse effect on the economy.
The same fiscal measures can lead to a large or small deficit government by the state of the economy. During recession period GDP falls which reduces tax revenue which increase the fiscal deficit.

Question 8.
The Government allocates more amount for subsidies in the budget. (MARCH-2011)
a) Give your opinion about its impact on fiscal deficit.
b) Total Expenditure = ₹3,000 crores
Revenue receipts = ₹1,500 crores
Non-debt creating Capital receipts = ₹600 crores
Calculate Gross
c) Define Primary Deficit.
Answer:
a) Increases fiscal deficit.
b) Gross fiscal deficit, = 3000 – (1500 + 600)
= 3000-2100 = 900
c) Primary deficit is fiscal deficit minus the interest payments
ie, Primary deficit = fiscal deficit – Interest payments

Question 9.
“Fiscal deficits are inflationary.” Do you agree with this statement? Comment. (MARCH-2012)
Answer:
Fiscal deficits are generally treated as inflationary. Increase in govt, expenditure and cuts in taxes both leads to government deficit. Increased govt, expenditure and reduced taxes tend to increase the aggregate demand. Generally firms are not able to produce higher quantities that are demanded at the going prices. This leads to inflationary pressure. However, there is a solution to this inflationary pressure. The economy can utilize the unutilized resources and raise production. Therefore, the deficit cannot be inflationary when an economy has unutilized resources.

Question 10.
The following are some of the fiscal policy measures. Complete the table appropriately.(MARCH-2012)

Fiscal policy measuresAt the time of Excess demandAt the time of Deficit demand
Taxation
Public borrowing
Public expenditure

Answer:

Fiscal policy measuresAt the time of Excess demandAt the time of Deficit demand
TaxationIncreaseDecrease
Public borrowingIncreaseDecrease
Public expenditureDecreaseIncrease

Question 11.
Below are given the relative size of the budget. Mention the type of budget. (MARCH-2013)
Relative size of Budget
i) Revenue > Expenditure
ii) Revenue = Expenditure
iii) Revenue < Expenditure
Type of Budget?
Answer:
i) surplus budget
ii) balanced budget
iii) deficit budget

Question 12.
Schematically represent the components of a government budget. (JUNE-2014)
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 5 The Government Budget and The Economy 3

Question 13.
Which of the following is a transfer payment? (MARCH-2015)
a) Rent
b) Wages
c) Interest
d) Old age pension
Answer:
old age pension

Question 14.
Distinguish between revenue deficit and fiscal deficit. (MAY-2015)
Answer:
When a government spends more than it collects by way of revenue, it incurs a budget deficit. There are various measures that capture government deficit and they have their own implications for the economy. The important concepts of deficits are discussed below.

Revenue Deficit: The revenue deficit refers to the excess of government’s revenue expenditure over revenue receipts.
Fiscal Deficit: Fiscal deficit is the difference between the government’s total expenditure and its total receipts excluding borrowing.
Primary Deficit: We must note that the borrowing requirement of the government includes interest obligations on accumulated debt. To obtain an estimate of borrowing on account of current expenditures exceeding revenues, we need to calculate what has been called the primary deficit. It is simply the fiscal deficit minus the interest payments.
Gross primary deficit = Gross fiscal deficit – net interest liabilities.

Question 15.
Should current account deficit be a cause for alarm? (MARCH-2016)
Answer:
Yes, current account deficit is a cause for alarm because it will create inflationary pressures in the economy. Inflation will badly affect all classes of society. Hence current account deficit should be reduced by taking effective fiscal measures.

Question 16.
Complete the following equations: (MAY-2016)
a) Revenue Deficit = Revenue Expenditure – ( ___________ )
b) Gross Fiscal Deficit = Total Expenditure – (_________ )
c) Gross Primary Deficit = Gross Fiscal Deficit – ( _________)
d) 1 – MPC = (_________)
Answer:
a) Revenue receipts
b) Revenue receipts + non-debt creating capital receipts
c) Net investment liabilities
d) MPS

Question 17.
Are Fiscal deficit inflationary? Substantiate your answer.(MAY-2016)
Answer:
Yes. An increase in government expenditure beyond certain limits leads to a fiscal deficit increased spending thus pumps too much money into the economy. It increases the purchasing power of the public. The ultimate result of this overspending or fiscal deficit is an increase in the price level. Thus, fiscal deficits are inflationary in nature.

Question 18.
Fill in the blanks:
i) _______ = Revenue Expenditure – Revenue Receipts (MARCH-2017)
ii) Primary Deficit = _______ – Net Interest Liabilities
Answer:
i) Revenue Deficit
ii) Gross fiscal deficit

Question 19.
Distinguish between Revenue Expenditure and Capital Expenditure. (MARCH-2017)
Answer:
Revenue expenditure: Revenue expenditure is expenditure incurred for the normal functioning of the government. Which does not create liabilities or reduce the assets of the govt.
It can be further classified into plan revenue expenditure and non-plan revenue expenditure.
Capital expenditure: This expenditure creates physical or financial assets or decreases the liability of the government. Capital expenditure can be further classified into plan capital expenditure and non-plan capital expenditure.

Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part II Chapter 4 Income Determination.

Kerala Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination

Question 1.
Classify the following statements into two branches of economics: (MARCH-2008)
a) Firm’s decision about how much to invest.
b) Govt, has adopted devaluation to overcome deficit in balance of payments.
c) RBI has increased Cash Reserve Ratio to control inflation.
d) Price elasticity of luxury good is elastic
Answer:
a) Micro economics
b) Macroeconomics
c) Macroeconomics
d) Microeconomics

Question 2.
Assume the marginal propensity to consume of a State in India is 0.8 (MARCH-2010)
1) Find out tax multiplier and expenditure multiplier.
2) From the above example prove that adding these two policy multipliers brings a balanced budget multiplier.
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 1

Question 3.
Suppose the income of individual A increases from ₹1,000 to ₹1,100. So his consumption rises from ₹750 to ₹825. Find out MPS and MPC. (MARCH-2010)
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 2

Question 4.
a) Complete the following table: (JUNE-2010)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 3
b) Using the equation prove that MPC + MPS = 1
Answer:
a)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 4
b) MPC + MPS = 1
That is 0.75+ 0.25 = 1

Question 5.
The Central Government sanctioned ₹40 crores to Kerala and Assam for making additional investments. The MPC of Kerala is 0.8 and Assam is 0.5. (JUNE-2010)
a) Find the multiplier and multiplier effect on the income of these two States.
b) Explain the concept of output multiplier.
Answer:
a)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 5
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 20
= 80 crores
b) Multiplier denotes the relationship between investment and income. Increase in investment leads to increase in income.

Question 6.
A = C + T = ₹ 50 crores, MPC = 0.8, Y = ₹ 4000 crores (MARCH-2011)
a) State whether the economy has reached in equilibrium or not (Hint: Y = \(\overline{\mathrm{A}}\) + CY)
b) Illustrate your conclusion in a diagram.
Answer:
Y = \(\overline{\mathrm{A}}\) + c. y
Since \(\overline{\mathrm{A}}\) = \(\overline{\mathrm{C}}\) \(\overline{\mathrm{I}}\). we have
Y = \(\overline{\mathrm{C}}\) \(\overline{\mathrm{I}}\) x c. y Putting values, we get
Y = 50 + 0.8 x 4000
=50 + 3200 – 3250
Since 3250 ≠ 4000, equilibrium is not reached in the economy.

Question 7.
Multiplier plays a significant role in Keynesian Macro Economics. (MARCH-2011)
a) Examine the relationship between multiplier and MPC
b) If MPC = 0.8, calculate multiplier.
Answer:
a) The value of multiplier is determined by marginal propensity to consume. Higher the MPC, greater the size of multiplier lower the MPC, smaller the size of multiplier. When income of consumer rises they spend more the value of increase in income ie. multiplier depends on’MPC, greater the value of multiplier depends on greater size of MPC. Thus there is direct relation between multiplier and MPC.
The relation can be expressed in terms of an equation as under
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 7
Putting the value of in equation we get,
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 8
Thus it is clear from the above equation that the value of MPC and multiplier are positively related
b) MPC = 0.8
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 9

Question 8.
Distinguish the terms ‘Ex ante investment’ and ‘Ex post’ investment. (MARCH-2012)
Answer:
Ex ante means ‘anticipated’ while Ex post means realised. In economics ex ante investment refers to anticipated investment in an economy while ex post investment refers to the realised investment.
Ex ante: The planned value of a variable as opposed to its actual value.
Ex post: The actual or realized value of a variable as opposed to its planned value .
Ex ante consumption: The value of planned consumption
Ex ante investment: The value of planned investment.

Question 9.
Explain the concept of aggregate demand with the help of a diagram.(MARCH-2013)
Answer:
The total amount of goods and services demanded in the economy at a given overall price level and in a given time period. It is represented by the aggregate-demand curve, which describes the relationship between price levels and the quantity of output that firms are willing to provide. Normally there is a negative relationship between aggregate demand and the price level. Also known as Total spending”.
Aggregate demand is the demand for the gross domestic product (GDP) of a country, and is represented by this formula:
Aggregate Demand (AD) = C + I + G + (X-M) Where, C = Consumers’ expenditures on goods and services.
I = Investment spending by companies on capital goods.
G = Government expenditures on publicly provided goods and services.
X = Exports of goods and services.
M = Imports of goods and services.
Downward sloping aggregate demand curve
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 10
The most noticeable feature of the aggregate demand curve is that it is downward sloping, as seen in . There are a number of reasons for this relationship. Recall that a downward sloping aggregate demand curve means that as the price level drops, the quantity of output demanded increases. Similarly, as the price level drops, the national income increases. There are three basic reasons for the downward sloping aggregate demand curve. These are Pigou’s wealth effect, Keynes’s interest-rate effect, and Mundell- Fleming’s exchange-rate effect. These three reasons for the downward sloping aggregate demand curve are distinct, yet they work together.
The first reason for the downward slope of the aggregate demand curve is Pigou’s wealth effect. The second reason for the downward slope of the aggregate demand curve is Keynes’s interest-rate effect. The third reason for the downward slope of the aggregate demand curve is Mundell-Fleming’s exchange-rate effect.

Question 10.
Distinguish the concepts (JUNE-2014)
a) Ex Ante and
b) Ex Post
Answer:
Ex-ante and Ex-post
Consumption, savings and investment can be classified into Ex-ante and Ex-post variables. The terms Ex-ante and Ex-post have been derived from the Latin word. Ex-ante means planned or desired. Ex-post means actual or realized. In national income accounting, the variables such as consumption, investment and savings are considered as ex-post variables. The rate at which consumption, savings and investment are presented in the ex-post sense.

Question 11.
Explain the concept marginal propensity to consume. How it relates to marginal propensity to save? (JUNE-2014)
Answer:
Marginal Propensity To Consume – MPC’
The proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services, as opposed to saving it. Marginal propensity
to consume is a component of Keynesian macroeconomic theory and is calculated as the change in consumption divided by the change in income. MPC is depicted by a consumption line- a sloped line created by plotting change in consumption on the vertical y axis and change in income on the horizontal x axis.
The marginal propensity to consume (MPC) is equal to AC / AY, where Ac is change in consumption, and AY is change in income.
Marginal Propensity to consume refers to the ratio of change in consumption to change in income. MPC = AC / AY
Marginal Propensity to save refers to the ratio of change in saving to change in income.
MPS = AS /AY
The sum of MPC and MPS is always one and equal to unity.
That is MPC + MPS = 1

Question 12.
The point on the supply curve at which a firm earns normal profit is called _________ (MARCH-2015)
a) Normal profit
b) Super normal profit
c) Break-even point
d) Shut-down point
Answer:
d) Shut-down point

Question 13.
In an economy, investment increases by 500 crores. If MPC is 0.5, what is the increase in total income? (MARCH-2015)
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 11
Increase in total income
= Kx increase in investment
= 2 x 500 crores
= 1000 crores

Question 14.
If all the people of the economy increases the proportion of income they save, the aggregate savings in the economy will not increase. This phenomenon is known as ______. (MARCH-2015)
a) Paradox of prosperity
b) Paradox of thrift
c) Leontief paradox
d) Giffen paradox
Answer:
Paradox of thrift

Question 15.
Study the following table and answer the questions. (MARCH-2015)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 12
a) Derive the aggregate demand schedule.
b) Show graphically the components of aggregate demand.
Answer:
a) Aggregate desired schedule
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 13

Question 16.
a) Explain Effective Demand. (MAY-2015)
b) What are the determinants of the value of aggregate demand?
c) Diagrammatically explain the change in Aggregate demand due to a change in government expenditure.
Answer:
Effective Demand
a) The logical starting point of Keynes General Theory is the principle of effective demand. Effective demand is the aggregate demand for the existing output at prevailing prices. The main reason for unemployment in an economy is the deficiency in aggregate demand. To avoid unemployment, we have to increase effective demand. Income and Employment determination The level of income and employment will be determined at the point where aggregate demand equals aggregate supply.
b) Aggregate demand and its determinants Aggregate demand is the total demand in an economy at various levels of employment. In other words it is aggregate expenditure on all goods and services in the economy. It consists of the four components.
They are:

  • Consumption demand
  • Investment demand
  • Government demand

c) Equilibrium level of income is determined by Aggregate demand (AD) and Aggregate Supply (AS). This situation is shown in figure 1.
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 14
Figure 2 shows the effect of change in government expenditure. As government expenditure increases AD curve shifts up to AD1.This brings new equilibrium point at E1. So the level of income increases to Y1.

Question 17.
Distinguish between the terms Ex-ante Investment and Ex-post Investment. (MAY-2016)
Answer:
Ex-ante investment means planned investment. On the other hand, ex-post investment means actual or realised investment.

Question 18.
Consider the following diagram. Answer the following questions: (MARCH-2017)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 15
i) What does the 45° line represent?
ii) What is the difference between A1 and A1?
iii) List two possible reasons for an increase in Autonomous Expenditure.
iv) When the economy moved from E1 to E2, the Aggregate output is increased more as compared to Aggregate expenditure. Why?
v) Explain the movement of the economy from E1 to E2.
Answer:
i) Equilibrium income determination curve (AD curve)
ii) When investment increases the aggregate demand will increase. So equilibrium income will also increase.
iii) To increase public expenditure of govt.
To increase transfer of payment of govt.
iv) When govt, expenditure increases there occurs a change in autonomous component of the aggregate demand curve. The slope will remain constant then equilibrium income will increase. This is due to the operation of the multiplier.
Suppose the govt, expenditure increases, then aggregate demand curve shift from AD1 to AD2. So equilibrium income increase form E1 to E2. The change in income (∆y) is greater than change in govt, expenditure (∆G). This is due to the effect of multiplier.

Question 19.
Among the following choose the one which represents the multiplier.  (MARCH-2017)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 16
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 17

Question 20.
Elucidate the working of Autonomous Expenditure Multiplier Mechanism with a suitable example. Show the impact of a decline in MPC on multiplier.  (MARCH-2017)
Answer:
Consumption at zero level of income is called autonomous consumption. When there is increase in autonomous expenditure, the aggregate demand curve shifts upward. Similarly, when there is fall in autonomous expenditure the curve shifts downward.
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 18
Here mpc is the decisive factor influencing the value of multiplier. For example, if the value of mpc is 0.75, the multiplier is
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 4 Income Determination 19

Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part II Chapter 3 Money and Banking.

Kerala Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking

Question 1.
Complete the chart. (MARCH-2008)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 1
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 2

Question 2.
Imagine an economy without money and point out the difficulties faced in the exchange of commodities. Can you suggest an economic term for that situation? (MARCH-2008)
Answer:
a) Difficulties of commodity exchange system are:

  • need of the double coincidence of wants.
  • need of divisibility
  • lack of common measure of value
  • lack of proper store of value.

b) This system is called barter system.

Question 3.
In the following table some important monetary policy measures are given. Complete the table appropriately. (MARCH-2008)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 3
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 4

Question 4.
the questions given below. (MARCH-2008)
1) Central Government wants advice on a financial crisis.
2) Central Government wants an authority as the custodian of foreign exchange reserves.
3) The country needs an institution to regulate the money supply and credit system.
4) Commercial Banks wants an institution for assistance and advice.
a) Which institution can handle all these issues?
b) Analyse each issue and explain how that institution handle and make decision on them.
Answer:
a) RBI or Central Bank
b) 1) Financial adviser
2) Custodian of nation’s foreign exchange reserves
3) Control of credit
4) Lender of last resort

Question 5.
A recent study on film industry in Kerala reveals that even today majority of the producers depend not on banks but on big money lenders for raising the required capital. (JUNE-2009)
a) Comment on it in the background of Indian monetary system.
b) Suggest a remedy for betterment.
Answer:
a) It is a fact that in Kerala many people depend on private money lenders rather than banks. This is because banking activities are time-consuming and will cause unnecessary delay. Moneylenders are easily accessible and therefore people depend on them for financial requirements,
b) Banking system should be made easily approachable.

  • Bank facilities should be provided to all.
  • Delay in business should be avoided.
  • Unnecessary formalities and practices should be avoided.
  • Large security requirements of banks should be relaxed.

Question 6.
The RBI has been publishing four alternative measures of money supply in India since 1977. On the basis of this.(MARCH-2010)
a) Complete the following table:
b) Identify aggregate monetary resource.
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 5
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 6

Question 7.
Data regarding the production and cost structure of a firm is given below: (MARCH-2010)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 7
a) If TFC is 60, complete the table.
b) On the same set of axis plot TFC, TVC and TC.
c) Write relevant equations to find out AFC, AVC,
Answer:
a)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 8
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 9

Question 8.
Monetary policy is the policy adopted by the RBI to stabilize the economy. One of the instruments of monetary policy is cash reserve ratio. Supplement other three and explain.(MARCH-2010)
Answer:
1) Bank Rate
2) Statutory Liquidity Ratio
3) Open Market Organisations

Question 9.
‘Money supply is a stock variable.’ (JUNE-2010)
a) Define the concept of money supply.
b) Name the four alternative measure of money supply.
c) Classify them into narrow money and broad money.
Answer:
Money supply consists of currency notes and coins issued by the monetary authority of the country.
b) The total stock of money in circulation among the public at a particular point of time is called money supply. RBI publishes figures for four alternative measures of money supply, viz. M1, M2, M3 and M4. They are defined as follows.
c) M1 and M2 are narrow money. M3 and M4 are broad money
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 10
Question 10.
RBI is the independent authority for conducting monetary policy in the economy. Explain the instruments which RBI uses for conducting monetary policy. (JUNE-2010)
Answer:
Bank rate
Open market operations
Margin requirements

Question 11.
Anand has an account in State Bank of India. He often withdraws some amount of money either through cheque or through ATM card. (MARCH-2011)
Answer:
Demand deposit/Saving deposit/Current deposit

Question 12.
In order to control inflation, Reserve Bank of India (RBI) raised Cash Reserve Ratio (CRR) by 0.75% during January 2010. As part of monetary policy, the RBI adopts some more measures to counter inflation. Discuss any other 2 measures. (MARCH-2011)
Answer:
The instruments which RBI uses for conducting mon-etary policy are as follows.
1) Open Market Operations:
It refers to the sale and purchase of government securities by the central bank. RBI purchases government securities to the general public in a bid to increase the stock of high powered money in the economy.
2) Bank Rate Policy:
As mentioned earlier, RBI can affect the reserve deposit ratio of commercial banks by adjusting the value of the bank rate-which is the rate of interest commercial banks have to pay RBI – if they borrow money from it in case of shortage of reserves. A low (or high) bank rate encourages banks to keep smaller (or greater) proportion of their deposits as reserves, since borrowing from RBI is now less (or more) costly than before.

Question 13.
Observe the graph given. Identify the segment of liquidity trap from the figure and choose the answer from bracket. (MARCH-2011)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 11

Answer:
c to d

Question 14.
Distinguish between the ‘legal tender money’ and ‘flat money’.(MARCH-2012)
Answer:
Money issued by the monetary authority or the government which cannot be refused by any one is called legal tender money.
Eg : Currency notes.
On the other hand fiat money refers to money with no intrinsic value.
Eg : Coins

Question 15.
In India RBI has developed alternative measures of money supply and figures are published accordingly. (MARCH-2013)
a) Prepare a chart showing the alternative measures of money supply in India.
b) Categorise them into ‘narrow money’ and ‘broad money’.
c) Also identify the ‘most’ and ‘least’ liquid forms of money.
Answer:
The total stock of money in circulation among the public at a particular point of time is called money supply. RBI publishes figures for four alternative measures of money supply, viz. M1, M2, M3 and M4. They are defined as follows.
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 12
b) M1 and M2 are narrow money M3 and M4 are broad money
c) M1 and M2 are known as narrow money. M3 and M4 are known as tad money. These gradations are in decreasing order of liquidity. M1 is most liquid and easiest for transactions whereas M4 is least liquid of all. M3 is the most commonly used measure of money supply. It is also known as aggregate monetary resources.

Question 16.
“People desire to hold money balance broadly from two motives.” Explain. (MAY-2015)
Answer:
The Transaction Motive: The principal motive for holding money is to carry out transactions. In general, the transaction demand for money in an economy, MdT, can be written in the following form
Mt = k.T
where T is the total value of (nominal) transactions in the economy over unit period and k is a positive fraction. The number of times a unit of money changes hands during the unit period is called the velocity of circulation of money. In general, equation can be modified in the following way
Mt = kPY
where Y is the real GDP and P is the general price level or the GDP deflator. The above equation tells us that transaction demand for money is positively related to the real income of an economy and also to its average price level.
The Speculative Motive : An individual may hold her wealth in the form of landed property, bullion, bonds, money, etc. Everyone in the economy will hold their wealth in money balance and if additional money is injected within the economy it will be used up to satiate people’s craving for money balances without increasing the demand for bonds and without further lowering the rate of interest below the floor level. Such situation is called a liquidity trap. The speculative money demand function is infinitely elastic here.

Question 17.
Distinguish between a stock and flow variables. Illustrate with examples. (MARCH-2017)
Answer:
Stock : It is a variable which can be measured at a particular point of time. Stock is a static concept e.g. wealth, money supply, inventory.
Flow: It is a variable which can be measured over a given period of time. It is a dynamic concept, e.g: income, gross value added (GVA), changes in inventory

Question 18.
Write a note on the interest responsiveness of the following motives for the demand for money. (MARCH-2017)
Answer:
i) Translation motive
ii) Precautionary motives
iii) Speculative motives
The amount of money that people keep as cash will be determined by comparing the advantages of liquidity and interest rates. The demand for money – as arises due to
1. Precautionary motive: People will hold liquid cash in order to meet emergencies. This is known as precautionary motive.
2. Transation motive: The desire of people hold cash in order to make transactions is defined as demand for money. The volume of GDP increases transations demand for money will also increase. It has a positive relationship with GDP.
3. Speculative motive: In order to make profits from the purchase and sale of bonds and securities individuals will hold cash. This is known as speculative motive.
The relationship between interest rate and bond price is negative. When the market rate of interest is high the bond price will be less.
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 3 Money and Banking 13
When the market rate of interest reaches minimum the speculative demand curve will be parallel to ‘x’ axis. This situation is known as liquidity troop.

Question 19.
Match the following: (MARCH-2017)
M1 : Most commonly used measure of money supply
M2: Least liquid form of money supply
M3: M1 + Post Office Savings Deposits M
M4: CU+DD
Answer:
M1: CU + DD
M2: M1 + Post Office Savings Deposits
M3: Most commonly used measure of money supply
M4: Least liquid form of money supply.

Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part II Chapter 2 National Income Accounting.

Kerala Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting

Question 1.
The national product can be measured by using the expenditure method, income method, and value-added method. Prepare the equations to find out GNPMP with these separate methods. (MARCH-2008)
Answer:
National Income is the sum total of the value of goods and services produced in a country during a year. It can be measured using 3 methods namely product method, expenditure method, and income method.
Product Method
The process to obtain GNPMP by the production method is: Value added in the primary sector + valued added in the secondary sector + value-added in the tertiary sector + Net factor income from abroad.
Income method
The process to obtain GNPMP by the income method is: Compensation of employees + Profit + rent + interest + Mixed-Income + Depreciation + Net indirect taxes + Net factor income from abroad
Expenditure method
The process to obtain GNPMP by the expenditure method is: Private consumption expenditure + Investment expenditure + Govt, purchase of goods and services + net exports + Net factor income from abroad.

Question 2.
Prepare self explanatory charts to explain the various concepts related to National Income concepts. (MARCH-2008)
a) GDP
b) PCI
c) NNP
d) PDI
Answer:
a) GDP – > GNP -> Net factor income from abroad
National Income
b) PCI – > \(\frac{\text { National Income }}{\text { Population }}\)
c) NNP – > GNP- depreciation
d) PDI -> Personal Income-direct taxes

Question 3.
Identify the Boxes and flows and complete the following. (MARCH-2009)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 1
Answer:
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 2

Question 4.
The following table shows the different components of domestic factor income for the economy of Malasia. Complete the table by calculating the necessary figures. (MARCH-2009)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 3
Answer:
Domestic Factor Income = Compensation of employees + Operating surplus + Mixed income of the self-employed.
1)250
2)450
3)-750
4) 1400

Question 5.
Give one word for the following statement: (MAY-2009)
a) National income + population
b) A pictural illustration of the interdependence between major sectors and their economic activities.
c) Personal income – direct tax.
d) GNP – Depreciation
Answer:
a) Per capita income
b) Circular flow
c) Disposable income
d) NNP

Question 6.
Suppose that in a two-sector economy the value of finished goods is equal to 200 crores and the income generated as factor reward is also equal to 200 crores. The household spends only 160 crores. Then (MAY-2009)
a) What will happen to circular flow?
b) Which system can be introduced to correct circular flow?
c) Name the leakages and injunctions.
d) Draw the flowchart by incorporating the new system
Answer:
a) Circular flow of income and expenditure will be disturbed when households spend less than their earnings.
b) Financial system can be introduced to correct the circular flow.
c) Saving is a leakage Borrowing is an injection
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 4

Question 7.
between income method and the expenditure method of national income measurement. (MARCH-2010)
Hint: The report should have
a) Title
b) Introduction
c) The main points
d) Conclusion win own observation
Answer:
Measurement of National income
Respected teachers and dear friends,
The topic of my seminar paper is ‘measurement of national income or the methods of measuring national income’. The concept of national income occupies an important place in economic theory. National income is the aggregate money value of all goods and services produced in a country during an accounting year. In this seminar paper I would like to present various methods of measuring national income. Introduction
National income can be measured in different ways. Generally, there are three methods for measuring national income. They are

  • Value added method
  •  Income method
  • Expenditure method Value added method

The term that is used to denote the net contribution made by a firm is called its value-added. We have seen that the raw materials that a firm buys from another firm which are completely used up in the process of production are called ‘intermediate goods’. Therefore the value-added of a firm is, value of production of the firm – value of intermediate goods used by the firm. The value-added of a firm is distributed among its four factors of production, namely, labour, capital, entrepreneurship and land. Therefore wages, interest, profits and rents paid out by the firm must add up to the value-added of the firm. Value-added is a flow variable.

Expenditure Method

An alternative way to calculate the GDP is by looking at the demand side of the products. This method is referred to as the expenditure method. The aggregate value of the output in the economy by expenditure method will be calculated. In this method, we add the final expenditures that each firm makes. Final expenditure is that part of expenditure which is undertaken not for intermediate purposes.

Income Method

As we mentioned in the beginning, the sum of final expenditures in the economy must be equal to the incomes received by all the factors of production taken together (final expenditure is the spending on final goods, it does not include spending on intermediate goods). This follows from the simple idea that the revenues earned by all the firms put together must be distributed among the factors of production as salaries, wages, profits, interest earnings and rents.
That is GDP = W+ P + ln + R
Conclusion:
Thus it can be concluded that there are three methods for measuring national income. These methods are the value-added method, income method, and expenditure method. Usually, in estimating national income, different methods are employed for different sectors and sub-sectors.

Question 8.
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 5
a) Complete the chart showing circular flow of economic activity. (MARCH-2010)
b) Identify money flow and real flow from the figure.
Answer:
a)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 6
b) Consumption expenditure and factor payments are money flows, flow of goods and services and factor services are real flows.

Question 9.
The GNP is considered as an index of welfare of a country, but there are some limitations of using GNP. Explain the three limitations. (MAY-2010)
Answer:
It is usually argued that GDP is not always a true index of welfare of a country. There are several limitations in using GDP as an index of welfare as discussed below.
1) Distribution of GDP- how uniform is it: If the GDP of the country is rising, the welfare may not rise as a consequence. This is because the rise in GDP maybe concentrated in the hands of very few individuals or firms. For the rest, the income may in fact have fallen. In such a case the welfare of the entire country cannot be said to have increased. If we relate welfare improvement in the country to the percentage of people who are better off, then surely GDP is not a good index.

2) Non-monetary exchanges: Many activities in an economy are not evaluated in monetary terms. For example, the domestic services women perform at home are not paid for. The exchanges which take place in the informal sector without the help of money are called barter exchanges. In barter exchanges goods (or services) are directly exchanged against each other. But since money is not being used here, these exchanges are not registered as part of economic activity. In developing countries, where many remote regions are underdeveloped, these kinds of exchanges do take place, but they are generally not counted in the GDPs of these countries.
This is a case of underestimation of GDP. Hence GDP calculated in the standard manner may not give us a clear indication of the productive activity and well-being of a country.
Externalities: Externalities refer to the benefits or harms a firm or individual causes to another for which they are not paid or penalized. Externalities do not have any market in which they can be bought and sold. In the case of externalities, whether positive or negative, it may not reflect the true picture of the economy. That is in the case of externality, GDP will underestimate the actual welfare of the economy.

Question 10.
using three methods: (MAY-2010)
a) Identify the three methods.
b) Prepare the equations to find out GDP with these separate methods.
Answer:
a) Product method, Income method, Expenditure method
b) Product method Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 7
Income method: GDP = C + S + T

Question 11.
Prepare a seminar report on the topic ‘Product Method and Income Method of National Income Measurement’. (MARCH-2011)
The report should contain
a) Title
b) Introduction
c) Main points
d) Conclusion with own observation
e) Order of presentation
Answer:
Measurement of National income Respected teachers and dear friends, The topic of my seminar paper is ‘measurement of national income or the methods of measuring national income’. The concept of national income occupies an important place in economic theory. National income is the aggregate money value of all goods and services produced in a country during an accounting year. In this seminar paper I would like to present various methods of measuring national income.
Introduction
National income can be measured in different ways. Generally there are three methods for measuring national income. They are

  • Value added method
  • Income method
  • Expenditure method Value added method

The term that is used to denote the net contribution made by a firm is called its value added. We have seen that the raw materials that a firm buys from another firm which are completely used up in the process of production are called ‘intermediate goods’. Therefore the value added of a firm is, value of production of the firm – value of intermediate goods used by the fine. The value added of a firm is distributed among its four factors of production, namely, labour, capital, entrepreneurship and land. Therefore wages, interest, profits and rents paid out by the firm must add up to the value added of the firm. Value added is a flow variable.

Expenditure Method

An alternative way to calculate the GDP is by looking at the demand side of the products. This method is referred to as the expenditure method. The aggregate value of the output in the economy by expenditure method will be calculated. In this method we add the final expenditures that each firm makes. Final expenditure is that part of expenditure which is undertaken not for intermediate purposes.

Income Method

As we mentioned in the beginning, the sum of final expenditures in the economy must be equal to the incomes received by all the factors of production taken together (final expenditure is the spending on final goods, it does not include spending on intermediate goods). This follows from the simple idea that the revenues earned by all the firms put together must be distributed among the factors of production as salaries, wages, profits, interest earnings and rents.
That is GDP = W+ P + In + R
Conclusion
Thus it can be concluded that there are three methods for measuring national income. These methods are value-added method, income method and expenditure method. Usually, in estimating national income, different methods are employed for different sectors and sub-sectors.

Question 12,
Pick out the correct equation. (MARCH-2011)
a) GDP = GNP + Net factor income from abroad
b) NNP = GNP – Depreciation
c) NDP = GDP – Net Indirect Tax
d) NNP = GNP-Net Indirect Tax
Answer:
NNP = GNP – Depreciation

Question 13.
The term used to refer the benefits (or harm) a firm or an individual causes to another firm or an individual for which they are not paid is (MARCH-2012)
a) Welfare
b) Externalities
c) Transfer Payments
d) Internal Economies
Answer:
b) Externalities

Question 14.
Identify the real and nominal flows in the circular flow of income. (MARCH-2012)
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 8
Answer:
Real flows
Factor services
Final goods and services Nominal flows
Factor incomes
Expenditure on goods and services

Question 15.
GDP Deflator refers to (MARCH-2012)
a) The ratio of real to nominal GDP.
b) The ratio of nominal to real GDP.
c) The ratio of nominal N to real GDP.
d) The ratio of nominal GDP to nominal GNP.
Answer:
b) The ratio of nominal to real GDP.

Question 16.
From the data given below, calculate (MARCH-2012)
a) GDP at market price.
b) Net National Income at Factor Cost.
c) Personal income.
Data :
1) NDP at market price – ₹74,905
2) Net indirect taxes – ₹8,344
3) Income from Domestic product accruing to Govt. – ₹1,972
4) Net factor income from abroad – ₹(-) 232
5) Current transfers to households – ₹2,305
6) Depreciation – ₹4,486
Answer:
a) GDP at market price
GDPMP = NDPMP + Depreciation
= ₹74905 + 4486 = ₹79,391 .
b) Net National Income at factor cost
NNPFC = NDPMP – Net indirect tax + Net factor income from abroad = 74905-8344+ (-) 232 = 7 66,329
c) Personal income
= NNPFC+Current transfers to households = 66329 + 2305= ₹68,634

Question 17.
List of some variables are given below. Classify them in a table into stocks and flows. (MARCH-2013)
i) Wealth
ii) Income
iii) consumption
iv) Investment
v) Expenditure
vi) Capital stock
Answer:
Stock variables

  • wealth
  • capital stock

flow variables

  • income
  • consumption
  • investment
  • expenditure

Question 18.
From the following information, calculate GNP and NDP (₹ in crores) (MARCH-2013)
i) GDPMP 65,665
ii) Consumption of fixed capital 2,250
iii) Net factor income from abroad 750
Answer:
GNP = GDP + Net factor income from abroad GNP =65,665 + 750 = 66415 Crores
NDP = GDP – depreciation (Consumption of fixed capital)
NDP =65665-2250 = 63415 Crores

Question 19.
The value of the nominal GDP of India was ₹ 2,800 crores during the year 2011. The value of GDP of the country during the same year evaluated at the price of some base year was ₹3,200 crores. Find the value of GDP deflator of the year in percentage terms. (MARCH-2013)
Answer:
The ratio of nominal GDP to real GDP is known as GDP deflator
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 9

Question 20.
Though Gross Domestic Product (GDP) is often used as an indicator of economic welfare, it is not a comprehensive indicator of welfare. Elaborate. (MAY-2014)
Answer:
GDP deflator = Current year GDP / Base year GDP x 100 = 1800/1200 x 100 = 1.5 x 100
= 1.5 (in percentage terms 150)

Question 21.
Pick the odd one and justify your answer. (MAY-2014)
a) Product method
b) Deductive method
c) Income method
d) Expenditure method
Answer:
deductive method. All others are methods for measuring national income.

Question 22.
Identify central/basic economic problems. (MAY-2014)
i) What is to be produced?
ii) What is to be regulated?
iii) How goods are to be produced?
iv) How sectors are to be divided?
v) How produced output is to be divided?
vi) How much is to be produced?
Answer:
Basic economic problems are
i) what to produce
iii) how goods are to be produced
vi) how much is to produced

Question 23.
Define value added method. A farmer produces 5 quintals of wheat, out of which he sells 3 quintals to a flour mill and 1.5 quintals to consumers at the rate of ₹1000 per quintal. He retains the balance of 0.5 quintals of self-consumption. For wheat cultivation he spends ? 2000 on account of purchasing seeds and fertilizers. Calculate value added by the farmer (MARCH-2015)
Answer:
The real value added in the production process is called Gross value added.
Gross value added = Value of output – Intermediate consumption
Gross value added = 5000 – 2000 = 3000

Question 24.
Suppose in a two sector economy goods worth ₹150 crores are produced and income generated is also equal to ₹150 crores. Draw circular flow of economic activities in this economy and explain. (MAY-2015)
Answer:
The inter related process of production, income generation and expenditure is called circular flow of income. In the given two sector economy, the flow of economic activities can be in the following way.
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 10
In this sector households receive ₹150 crore for their factor services given to firms. Firms in reply, provides goods and services to household sector to firms as consumption expenditure.

Question 25.
Write down the three identities of calculating the GDP of a country by the three methods. Also explain why each of these should give us the same value of GDP.(MAY-2015)
Answer:
Gross National Product (GNP) equals Gross National Income equals Gross national expenditure i.e.
GNP = GNI = GNE
These are equal because national income is a circular flow of income. Aggregate expenditure is equal to aggregate output which in turn, is equal to aggregate income. However each method has some different items, yet they show exactly identical results. Their identity can be shown in the following manner: Reconciling Three Methods of Measuring Gross
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 11

Question 26.
Fill in the blanks :
a) A balanced budget multiplier is unity implies that ₹100 increase in ‘G’ increases National Income by (MAY-2015)
b) Gross primary deficit = ________
Answer:
a) ₹100
b) Gross primary deficit = Gross fiscal deficit – net interest liabilities.

Question 27.
Fill in the blanks : (MARCH-2016)
a) GDP + ______ = GNP
b) GNP – Depreciation = ______
c) ________ – Net Indirect Taxes = NNPFC
(GDP – Gross Domestic Products
GNP – Gross National Products
NNPFC – Net National product at factor cost)
Answer:
a) Net factor income from abroad
b) NNP
c) NNPMP

Question 28.
You are to be cautions while taking only GDP (Gross Domestic Product) as index of welfare. Why so? (MARCH-2016)
Answer:
GDP deflator = Current year GDP / Base year GDP x 100
= 1800/1200 x 100
= 1.5 x 100
= 1.5 (in percentage terms 150)

Question 29.
If the quantity demanded of ‘good’ X’ increases with a rise in the price of ‘good Y’, these goods are ________ (MAY-2016)
a) complementary goods
b) Inferior goods
c) Normal goods
d) Substitute goods
Answer:
d) Substitute goods

Question 30.
Differentiate between the stock variables and flow variables with examples. (MAY-2016)
Answer:
Stocks and flows
There are differences between the concepts of stocks and flows. Stock is a variable measured at appoint of time, whereas, flow is a variable measured over a period of time. Wealth, capital etc are variables which can be measured at a point of time. Therefore, they are stock variables. At the same time, income, output, profits etc are concepts that make sense only when a time period is specified. These are called flows because they occur in a period of time. Therefore we need to delineate a time period to get a quantitative measure of these.
Net Investment -> Flow
Capital -> Stock

Question 31.
Write down the three identities of calculating the GDP of a country by the three methods. Also briefly explain why each of these should give us the same value of GDP. (MAY-2016)
Answer:
Gross National Product (GNP) equals Gross National Income equals Gross National Expenditure,
i.e. GNP = GNI = GNE
These are equal because national income is a circular flow of income. Aggregate expenditure is equal to aggregate output which in turn, is equal to aggregate income. However each method has some different items, yet they show exactly identical results. Their identity can be shown in the following manner: Reconciling Three Methods of Measuring Gross.
Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 2 National Income Accounting 12

Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 1 Introduction to Macroeconomics

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part II Chapter 1 Introduction.

Kerala Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 1 Introduction to Macroeconomics

Question 1.
Classify the following statements into two branches of Economics. (MARCH-2008)
a) Reliance Communications reduced the STD charges by 20% from November onwards.
b) The Government proposed to reduce unemployment by introducing IT-related industries.
c) RBI hiked the cash reserve ratio.
d) Maruti Udyog decided to increase the production of the brand Estilo.
Answer:
a) Micro Economics
b) Macro Economics
c) Macro Economics
d) Micro Economics

Question 2.
them in a table based on two branches of Economics. Give suitable titles to the column. General price level, Aggregate consumption,Rent for a house in a city, Demand for fish in a local market. (MARCH-2009)
Answer:

Micro

Macro

  • Rent of a house in a city
  • General price level
  • Demand for fish in a local market
  • Aggregate consumption

Question 3.
Read the following statements carefully. (MARCH-2009)
Statement i:
M/s. Sathyam Computers Ltd. decided to introduce a wage cut of 10% for the labourers in the company in November, 2008.
Statement ii:
Reserve Bank of India introduced a new credit policy for the economy in the month of October, 2008.
In which Branc of Economics do you include the statement and why?
Answer:
Micro: Individual approach
Macro: Aggregate / General approach

Question 4.
In a seminar on “Definition of Economics” a group leader presented the definition as follows: “Economics is on the one side a study of wealth and on the other side study of man”. (MAY-2009)
State the correct definition. State the name of the economist.
Answer:
Wealth definition.
According to wealth definition, “Economics is the study of the nature of wealth, its generation, and its spending”. This definition was developed by Adam Smith.

Question 5.
Classify the following statements into two branches of economics: (MAY-2009)
a) Firm’s decision about how much to invest.
b) Govt, has adopted devaluation to overcome deficit in balance of payments.
c) RBI has increased Cash Reserve Ratio to control inflation.
d) Price elasticity of luxury good is elastic.
Answer:
a) Micro economics
b) Macroeconomics
c) Macroeconomics
d) Microeconomics

Question 6.
Classify the following economic variables under suitable heads. International trade, price theory, economic growth, partial equilibrium, aggregate demand, allocation of resources. (MARCH-2010)

..
..
..
..

Answer:

Micro EconomicsMacro Economics
  • Price theory
  • International trade
  • Partial equilibrium
  • Economic growth
  • Allocation of resources
  • Aggregate demand

Question 7.
According to the macro economic point of view there are four major sectors in an economy. Name these sectors. (MAY-2010)
Answer:
1)Households
2) Firms
3) Government
4) External sector

Question 8.
Classify the following in a given table under the given titles. (MARCH-2011)

Micro EconomicsMacro Economics

(National Saving Rate, Wage Rate of a KSRTC worker, Average Cost, Inflation)
Answer:

Micro EconomicsMacro Economics
  • Wage rate of KSRTC worker
  • National saving rate
  • Average cost
  • Inflation

Question 9.
Some variables are given below. Classify them in a Table based on the two branches of Economics. (MARCH-2012)
i) Utility
ii) Price level
iii) Inflation
iv) Demand for pen Aggregate consumption
vi) Taxes
vii) GDP
viii) Rent
Answer:

Micro EconomicsMacro Economics
  • Utility
  • Inflation
  • Price level
  • Aggregate consumption
  • Demand for pen
  • Taxes
  • Rent
  • GDP

Question 10.
Keyne’s book ‘‘General Theory of Employment, Interest and money” was published in (MARCH-2013 )
Answer:
i) 1926
ii) 1936
iii) 1946
iv) 1956
Answer:
ii) 1936

Question 11.
Classify the following under the heads micro and macro economics. (MARCH-2014)
a) Govt, regulations on auto emissions
b) Price elasticity of refrigerators
c) A family’s decision about how much income to save
d) The impact of higher National Savings on Economic Growth.
Answer:
a – Macroeconomics
b – Microeconomics
c – Microeconomics
d – Macroeconomics

Question 12.
Who is known as the father of modern Macro Economics? (MARCH-2015)
a) Adam Smith
b) Alfred Marshall
c) J.M.Keynes
d) J.B.Say
Answer:
c) J.M.Keynes

Question 13.
Classify the following under two heads Micro and Macro economics. (MAY-2015)
Utility, Inflation, Price of rice, taxes, GDP, Rent received by a shop owner, Extension in demand, Aggregate demand.
Answer:

Micro EconomicsMacro Economics
  • Utility
  • Inflation
  • Price of rice
  • Taxes
  • Rent received by a shop owner
  • GDP
  • Extention in demand
  • Aggregate demand

Question 14.
Distinguish the following economics systems. (MARCH-2016)
a) Centrally Planned economy
b) Market economy
Answer:
a) Centrally planned economy is an economic system where all the economic decisions are taken by the government through planning.
b) In a market economy, economic problems are solved by market forces of demand and supply. Competition are profit are the driving forces.

Question 15.
What would come in the place of question mark: (MARCH-2016)
A) (a) Wealth of Nations : 1776
(b) The general theory : ____?____
B) (a) ___?____ : Economy as a whole
(b) Micro Economics : Individual units
Answer:
A) (b) 1936
B) (a) Macroeconomics

Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part I Chapter 6 Non-Competitive Markets.

Kerala Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets

Question 1.
a) Draw the demand curves of perfect competition and monopoly market situations. (MARCH-2008)
b) Give reasons for the different shapes of demand curves in these markets?
Answer:
a) Demand curve of firm in perfect competition will be a horizontal straight line and that of monopoly will be a downward sloping. It is drawn below.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 1
b) In perfect competition demand curve is horizontal because the price for every unit sale will be uniform. In monopoly, price varies for every unit of output. Therefore demand curve slopes downward.

Question 2.
From your experience identify two examples each for the following market forms: (MARCH-2008)
a) Monopoly
b) Monopolistic competition
Answer:
Monopoly
KSEB
Indian Railway
Monopolistic competition
Soap industry
Toothpaste industry

Question 3.
State whether the following statements are correct or false. Give justification for your answer. (MARCH-2009)
1) Price discrimination is an important feature of perfect competition.
2) Selling cost is the cost for producing the commodity.
3) Product differentiation is one of the main features of Monopoly.
4) Price leadership is an important feature of Oligopoly.
Answer:
1) False
2) False
3) False
4) True

Question 4.
Write the correct market form in which the following firms operate. (MARCH-2009)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 2
Answer:
KSEB – Monopoly
Reliance – Communication Ltd. Oligopoly

Question 5.
Pick up the odd one and justify your answer. (MARCH-2009)
a) Monopolistic competition
b) Oligopoly
c) Monopsony
d) Perfect competition
Answer:
Monopsony

Question 6.
From the data given in table find TR and AR. Write any two relation between TR and MR. (MARCH-2009)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 3
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 4
When TR is maximum, MR becomes zero.
When TR reduces, MR becomes negative.

Question 7.
Fill up the following table appropriately: (MARCH-2009)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 5
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 6

Question 8.
The average revenue curves of two market situations are given below: (MAY-2009)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 7
Draw MR curves corresponding to AR curves.
State the market situation corresponding to AR curves.
Give reasons for difference in AR and MR between two market forms.
Answer:
a)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 8
b) First curve is related to perfect competition. Second curve is related to monopoly.
c) In perfect competition AR and MR are equal because every unit of the product is called sold at uniform price. Whereas, in monopoly firm can sell more only at lower prices. Therefore, different units are sold at different prices. This leads to difference in AR and MR curves.

Question 9.
Output and average revenue of firm are given below.
Fill up the missing columns and write the relevant equation of TR and MR : (MAY-2009)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 9
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 10

Question 10.
State whether the following statements are true or false. Rewrite if they are wrong: (MAY-2009)
a) The products in perfect competitive market are homogenous.
b) Seller in monopoly is a price taker.
c) Price leadership is an important feature of monopolistic competition.
d) Selling cost is a feature of monopoly.
e) Price discrimination under monopoly is always profitable.
1) Market in which there is only one buyer is called duopoly.
Answer:
True
b) False – price maker
c) False – a feature of Oligopoly
d) False – a feature of monopolistic competition
e) True
f) False – called monopsony

Question 11.
The average revenue curve of two market situation are given below: (MARCH-2010)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 11
a) State the market situation corresponding to AR curves.
b) Give reasons for the different shapes.
c) Draw MR curves corresponding to AR curves.
Answer:
a) Perfect competition, monopoly
b) Under perfect competition, firm is price taker, therefore, AR = MR
Under monopoly, firm is price maker, therefore, AR > MR
c)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 12

Question 12.
The main objective of the monopoly firm is profit maximisation. State the profit maximisation condition of a monopolist firm. (MARCH-2010)
Answer:
A monopolist maximises profit at that level of output for which the MC = MR and MC is rising. In other words, monopolist maximises profit at that level of output for which the vertical difference between TR and TC is maximum and TR is above the TC. In this level, the firm produces half of the market demand.

Question 13.
The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is ₹15 (MARCH-2010)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 13
a) Calculate profit at each level of output.
b) Find the profit maximising level of output.
Answer:
a)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 14
b) The profit maximising level of outputs is 6, where the difference between TR and TC is highest.

Question 14.
Which of the following is a characteristic of oligopoly? (MARCH-2013)
i) A market situation with only a few buyers
ii) A market situation with only a few sellers
iii) A market situation with only one seller
iv) Government control overprice.
Answer:
ii) A market situation with only a few sellers

Question 15.
Which type of market have full control over price? (MARCH-2013)
i) Perfect competition
ii) Monopolistic competition
iii) Monopoly
iv) Oligopoly
Answer:
iii) Monopoly

Question 16.
Can you explain why the demand curve facing a firm under monopolistic competition is negatively sloped? (MAY-2014)
Answer:
Monopolistic competition
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 15
The demand curve under monopolistic competition is neither perfectly elastic nor elastic but more elastic then monopoly. This is basically beacuse, close substitutes are available in monopolistic competition but not in monopoly.
Monopolistically competitive firms maximize their profit when they produce at a level where its marginal costs equals its marginal revenues. Because the individual firm’s demand curve is downward sloping, reflecting market power, the price these firms will charge will exceed their marginal costs. Due to how products are priced in this market, consumer surplus decreases below the pare to optimal levels you would find in a perfectly competitive market, at least in the short run. As a result, the market will suffer dead weight loss. The suppliers in this market will also have excess production capacity.

Question 17.
Monopolistic competition consists of: (MAY-2015)
a) A few firms selling identical products.
b) A few firms selling differentiated products.
c) Large number of firms selling identical products.
d) Large number of firms selling differentiated products.
Answer:
d) Large number of firms selling differentiated products

Question 18.
Which of the following describes monopoly? (MAY-2015)
a) Large number of buyers
b) Large number of sellers
c) Only a single buyer
d) Only a single seller with complete control over industry.
Answer:
Only a single seller with complete control over industry.

Question 19.
Linder Oligopoly the output decision of any one firm necessarily affect the price and quantity sold by other firms. Hence the rivals may react to protect the profit. List the three different ways in which oligopoly firms may behave. (MAY-2015)
Answer:
If the market of a particular commodity consists of more than one seller but the number of sellers is few, the market structure is termed oligopoly. The special case of oligopoly where there are exactly two sellers is termed duopoly. We shall explain the different ways in which the oligopoly firms may behave.

  • Firstly duopoly firms may collude together and decide not to compete with each other and maximize total profits of the two firms together. In such a case the two firms would behave like a single monopoly firm that has two different factories producing the commodity.
  • Secondly, take the case of a duopoly where each of the two firms decide how much quantity to produce by maximizing its own profit assuming that the other firm would not change the quantity that it is supplying. We can examine the impact using a simple example where both the firms have zero cost.
  • Thirdly, some economists argue that oligopoly market structure makes the market price of the commodity rigid, i.e., the market price does not move freely in response to changes in demand.

Question 20.
From the schedule given below, calculate the Total Revenue (TR) and derive the demand schedule. (MARCH-2016)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 16
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 17

Question 21.
The demand curve faced by a firm under monopolistic competition is negatively sloped. Explain. (MARCH-2016)
Answer:
The demand curve faced by a firm under monopolistic competition is negatively sloped because a firm under monopolistic competition could sell more of the commodity only by reducing the price.

Question 22.
What do you mean by monopoly market? Explain the features of monopoly. Also explain the short run equilibrium of a monopoly producer. (MAY-2016)
Answer:
Monopoly may be defined as a market situation in which there is only a single seller. He controls the entire market. The term monopoly has derived from two Greek words such as ‘mono’ means single and poly means ‘seller’. The meaning of the combined term is single seller. In a boarder sense, a monopolist is single seller of a commodity which does not have close substitutes. E.g. KSEB Features of Monopoly Market Some of the salient features of monopoly are as follows:
1) There is only a single firm producing the product
2) There is no close substitute for the product
3) Entry is denied for other producers
4) Since there is only one seller, the firm and the industry are same
5) The firm under monopoly is the price maker

Question 23.
Oligopoly is a market situation in which there is only (MAY-2016)
a) a few buyers
b) one seller
c) a few sellers
d) large number of sellers
Answer:
c) A few sellers

Question 24.
Why the Average Revenue Curve and Marginal Revenue Curve of a firm under monopolistic competition is negatively sloped? (MARCH-2017)
Answer:
The demand curve under monopolistic competition is much flatter, i.e, the demand curve of monopolistic competition is more price elastic, which can be explained with diagram.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 18

Question 25.
Examine the diagram given below. Identify the mistake and redraw the diagram. What is the relation between Total Revenue and Marginal Revenue as the firm expands its output? (MARCH-2017)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 19
Answer:
Relation between TR and MR
As more and more units of output is sold the TR increases at a decreasing rate MR decreases. When TR reaches maximum MR is zero.
When TR decreases MR is negative.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 6 Non-Competitive Markets 20

Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part I Chapter 5 Market Equilibrium.

Kerala Plus Two Microeconomics Chapter Wise previous Questions Chapter 5 Market Equilibrium

Question 1.
Compared to rural areas, the wage rate is higher in urban areas. Discuss the reasons for this. (MARCH-2008)
Answer:
Wages are higher in urban areas compared to rural areas due to the following reasons.

  • Availability of skilled workers in urban areas.
  • Professionals in urban areas.
  • Occupational and geographical mobility.
  • Differences in risks in certain urban jobs.

Question 2.
When you conducted a survey among teachers working in parallel colleges in Trichur district it is found that there exists a difference in earnings among teachers teaching different subjects. Find the reason for the same with suitable examples. (MAY-2009)
Answer:
Wage differences are due to the following reasons.

  • Difference in skill and productivity
  • People are not the same in matter of tastes, talents and efficiency.
  • Occupational and geographical mobility.
  • Some professions require high cost and long period of training.
  • Difference in risks involved in certain jobs.
  • Due to these reasons, some are paid more and others are paid less.

Question 3.
Suppose the demand and supply curve of good x shift simultaneously. The simultaneous shift can happen in four possible cases. The impact on equilibrium price and quantity in all four cases is different. On the basis of this, complete the following table : (MARCH-2010)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 1
Answer:
a) Leftward
b) Rightward
c) Decrease
d) Increase

Question 4.
Under fixed price analysis of a product market, if quantity supplied is either in excess or falls short of quantity demanded price will change because of excess supply or demand. In this occasion (MARCH-2010)
a) How the equilibrium is determined?
b) Name the principle.
Answer:
a) Assume that the elasticity of supply is infinite that is the supply schedule is horizontal. In this situation the equilibrium output will be solemnly determined by aggregate amount of demand at this price in the economy.
b) Keynesian analysis or effective demand Principle.

Question 5.
The demand function of a monopoly firm is given as q = 20 – 2P, substitute the values of P from 10 to 1. (MAY-2010)
a) Calculate the demand schedule of the commodity.
b) From the table calculate the TR, AR and MR values in a tabular form.
c) Draw the AR and MR curve in same set of axis.
d) When the price elasticity is more than one?
Answer:
a)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 2
b)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 3
c)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 4
d) Price elasticity is more than one when MR is positive.

Question 6.
Find the correct term for the following : (MAY-2010)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 5
Answer:
a) Equilibrium price
b) Price ceiling

Question 7.
The Government imposed lower limit on the price that may charged for a particular good is called price floor. Give two examples for imposition of price floor. The Government imposed lower limit on the price that may charged for a particular good is called price floor. Give two examples for imposition of price floor (MAY-2010)
Answer:
i) Price floor fixed for paddy
ii) Price floor fixed for food grains

Question 8.
This is a demand curve for a branded umbrella. (MARCH-2011)
a) If the demand for umbrella increases during rainy season, what term we use in economics to denote this change? Draw the curve.
b) What you call this change when the price of umbrella increased, the demand decreased.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 6
Answer:
a) Rightward shift or increase in demand
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 7
b) Upward movement along the same demand curve or there is contraction of demand.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 8

Question 9.
The demand and supply equations of a commodity in a perfectly competitive market are given as qd = 700 – P qs = 500 + 3P (MARCH-2011)
Calculate:
a) Equilibrium price
b) Equilibrium quantity
c) Based on the given supply and demand equations draw equilibrium situation on a diagram.
Answer:
a) Equilibrium price
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 9
b) Equilibrium quantity
qd = 700 – P
= 700 – 50
= 650
c)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 10

Question 10.
Imposition of the price ceiling below the equilibrium price leads to (MARCH-2012)
a) Excess demand
b) Excess supply
c) Deficit demand
d) Deficit supply
Answer:
a) Excess demand

Question 11.
Match the following: (MARCH-2012)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 11
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 12

Question 12.
Welfare considerations enable the govt, to impose price floor for some goods and services. Mention any one example of imposition of price floor. (MARCH-2013)
Answer:
In India, floor prices are fixed for a variety of commodities like paddy, rubber, wheat, coconut etc.

Question 13.
The following diagram shows equilibrium market price determined by the equality between demand and supply. (MARCH-2013)
Show the effect of change in demand and supply on equilibrium price and output under the following situations (use diagrams)
i) Increase in demand or when the demand curve shift rightwards.
ii) Increase in supply or when supply curve shift rightwards.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 13
Answer:
i) When demand curve shifts to right (increase in demand), there will be increase in equilibrium price and increase in equilibrium quantity. This change is shown in the diagram.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 14
ii) When supply curve shifts to right (increase in supply), the equilibrium price decreases and the equilibrium quantity increases. This is given in the following diagram.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 15

Question 14.
Diagrammatically illustrate the impact of (MAY-2014)
a) Price ceiling and
b) Price floor on market equilibrium
Answer:
a) Price Ceilings
A price ceiling occurs when the government puts a legal limit on how high the price of a product can be. In order for a price ceiling to be effective, it must be set below the natural market equilibrium.
When a price ceiling is set, a shortage occurs. For the price that the ceiling is set at, there is more demand than there is at the equilibrium price. There is also less supply than there is at the equilibrium price, thus there is more quantity demanded than quantity supplied. An inefficiency occurs since at the price ceiling quantity supplied the marginal benefit exceeds the marginal cost. This inefficiency is equal to the dead weight welfare loss.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 16
This graph shows a price ceiling. P* shows the legal price the government has set, but MB shows the price the marginal consumer is willing to pay at Q*, which is the quantity that the industry is willing to supply. Since MB > P* (MC), a dead weight welfare loss results. P’ and Q’ show the equilibrium price. At P* the quantity demanded is greater than the quantity supplied. This is what causes the shortage,
b) Price Floors
A price floor is the lowest legal price a commodity can be sold at. Price floors are used by the government to prevent prices from being too low. The most common price floor is the minimum wage the minimum price that can be payed for labor. Price floors are also used often in agriculture to try to protect farmers.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 17

Question 15.
From the list of goods given below, find out the one which cannot be provided through market mechanism? (MARCH-2015)
a) Private goods
b) Public goods
c) Merit goods
d) Club goods
Answer:
b) Public goods

Question 16.
The following diagram shows the equilibrium price of wheat determined by the supply curve ‘SS’ and market demand curve ‘DD’. With the help of the diagram answer the questions given below. (MARCH-2015)
a) If the Government imposes price ceiling on wheat, what happens to the demand for wheat?
b) Define price ceiling.
c) Write down two adverse impacts of price ceiling on the consumers.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 18
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 19

Question 17.
Explain through a diagram the effect of a rightward shift (increase) of both the demand and supply curves on the equilibrium price and quantity? (MAY-2015)
Answer:
When demand curve shifts to right (increase in demand), there will be increase in equilibrium price and increase in equilibrium quantity. This change is shown in the diagram.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 20
When supply curve shifts to right (increase in supply), the equilibrium price decreases and the equilibrium quantity increases. This is given in the following diagram.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 21

Question 18.
List the 3 different ways in which an oligopoly firm may behave. (MARCH-2016)
Answer:
If the market of a particular commodity consists of more than one seller but the number of sellers is few, the market structure is termed oligopoly. The special case of oligopoly where there are exactly two sellers is termed duopoly. We shall explain the different ways in which the oligopoly firms may behave.
Firstly duopoly firms may collude together and decide not to compete with each other and maximize total profits of the two firms together. In such a case the two firms would behave like a single monopoly firm that has two different factories producing the commodity.
Secondly, take the case of a duopoly where each of the two firms decide how much quantity to produce by maximizing its own profit assuming that the other firm would not change the quantity that it is supplying. We can examine the impact using a simple example where both the firms have zero cost.
Thirdly, some economists argue that oligopoly market structure makes the market price of the commodity rigid, i.e., the market price does not move freely in response to changes in demand.

Question 19.
Explain the consequence if price prevailing in the market is fixed: (MARCH-2016)
i) Above the equilibrium price (Price floor)
ii) Below the equilibrium price (Price ceiling)
Answer:
i) Excess supply
ii) Excess demand

Question 20.
Demand and supply equations of commodity X is given by (MARCH-2016)
qd = 100- P
qs = 70 + 2P
find the equilibrium price and quantity.
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 22

Question 21.
Imposition of price floor leads to (MAY-2016)
a) an excess demand
b) an excess supply
c) normal demand
d) any of the above
Answer:
b) an excess supply

Question 22.
State whether the following statements are true or false: (MAY-2016)
a) With supply curve remaining unchanged, when demand curve shifts rightward, the equilibrium quantity decreases and equilibrium price decreases.
b) In a perfectly competitive market, equilibrium occurs where market demand equals market supply.
Answer:
a) False
b) True

Question 23.
Suppose onion price increases above ₹100 per kg and the government imposes price ceiling. (MAY-2016)
a) What is price ceiling?
b) What are the consequence of imposing price ceiling?
Answer:
a) Price ceiling mean maximum price. It is the maximum price fixed by the government. The aim of price ceiling is to protect consumers. Government fixes price ceiling for essential products and medicines to protect the interests of the consumers.
Consequence of imposing price ceiling:
1. Black marketing
2. Malpractices by fair price shops
3. Sale of inferior quality goods.

Question 24.
Suppose the demand and supply functions of wheat are given by QD = 800 – 4P and QS= 600 + 4P respectively.
i) Find the equilibrium price and quantity demanded. (MARCH-2017)
ii) Due to a shortage of fertilizers, the cost of production of wheat is increased. So that the new supply function is
QS = 400 + 4P. What will happen to the equilibrium price and quantity demanded?
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 23
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 24
The equilibrium price will increase and equilibrium quantity will fall.

Question 25.
How does equilibrium price and quantity demand affect when (MARCH-2017)
i) Both demand and supply curves shift in the same direction.
ii) Demand and supply curves shift in the opposite directions.
Answer:
i) Both demand and supply curve shift in the same direction.
When the demand curve and supply curve shift to right: For a given price, more quantity is demanded as well as more quantity is supplied. The demand curve and supply curve shifted to right to show a greater quantity for a given price. If supply increases relatively greater than the equilibrium price is smaller, but if demand increases relatively greater than the intersection is higher and the price obtained will be higher. Only than it is certain that there will be more quantity at new equilibrium price.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 25
When the demand curve and supply curve shifts to left: The price may increase or decrease depending whether supply decreases relatively more or demand decrease relatively more, respectively, and the only certainty is that there is less quantity at new equilibrium point

ii) Demand curve shifts left and supply curve shifts right: Demand decreases and supply increases. The price was fallen, but if supply curve shifts a lot more right than the demand curve shifts left, then the new equilibrium point will mean more quantity is supplied at a much lower price.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 5 Market Equilibrium 26
Demand curve shifts right and supply curve shift left: Demand increases and supply decreases. The price will increase but depending on how far the supply curve shifts left, the equilibrium quantity would be more or less or same. This shift will see a higher equilibrium point with less quantity demand.

Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part I Chapter 4 The Theory of The Firm Under Perfect Competition.

Kerala Plus Two Microeconomics Chapter Wise previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition

Question 1.
Correct the following statements, if necessary: (MARCH-2010)
Statement I : Liquidity trap is the situation in which speculative demand for money is infinitely elastic.
Statement II : The imposition of a unit tax shift the supply curve of a firm to the left.
Statement III : The profit level that is just cover the explicit cost and opportunity cost is supernormal profit.
Answer:
Statement I : No correction
Statement II : No correction
Statement III : The profit level that is just cover
the explicit cost and opportunity cost is normal profit

Question 2.
There are three identical firms in the market. The following table shows the supply schedule of a firm : (MARCH-2010)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 1
1) Define market supply
2) Compute market supply schedule
3) Draw market supply curve
Answer:
1) The output level that firms in the market produce in aggregate, corresponding to different values of market prices.
2)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 2
3) Draw a market supply curve that slopes upwards corresponding to the above values.

Question 3.
Any factor that affects a firm’s marginal cost curve is of course a determinant of its supply curve”, there are three factors – determining the supply curve of a firm. Identify them. (MAY-2010)
Answer:
Factors determining the supply curve of a firm are :
Technical progress
Input prices
Unit tax

Question 4.
Mr. Kameth is a textile mill owner. He is facing challenges in production and marketing screnario. The situations he faced are given in column A and corresponding outcomes in marginal cost and supply of output are given in column B and C. Match A with B and C. (MARCH-2011)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 3
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 4

Question 5.
Under perfect competition a firm’s profit in the short run is maximized when 3 conditions are satisfied. (MARCH-2011)
a) Discuss the 3 conditions.
b) From the following schedule, suggest profit
maximizing level of output in the short run if price is ₹10.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 5
Answer:
a 1) MC must be equal to MR
2. MC must cut MR from below
3. Slope of MC must be greater than slope of MR.
b)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 6
c) Since MC = MR = 10 at 6th unit of output, the profit maximising level of output is 6 units.

Question 6.
In the following diagram, at points E and E1 MC and MR are equal. Among these, which point do you consider as producer’s equilibrium? Justify your answer. (MARCH-2012)
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 7
Answer:
In this diagram, producer’s equilibrium is at point Er This is because this point satisfies all the conditions of equilibrium. The conditions for attaining equilibrium are,
i) MC = MR
ii) MC must cut MR from below
These two conditions are satisfied at point E2.

Question 7.
Firm ‘A’ is operating under the condition of perfectly competitive market. Whether firm ‘A’ is capable of maintaining abnormal profit in the long run? Why? Hint: Long run equilibrium of a firm under perfect competition. (MARCH-2012)
Answer:
Yes, I do agree to the statement that a firm cannot make supernormal profit in the long run under perfect competition. This is because; freedom of entry will prevent super normal profit in the long run.
We first determine the firm’s profit-maximizing out-put level when the market price is greater than or equal to the minimum (long run) AC. This done, we determine the firm’s profit-maximizing output level when the market price is less than the minimum (long run) AC.
Case 1: Price greater than or equal to the minimum LRAC
Case 2: Price less than the minimum LRAC Combining cases 1 and 2, we reach an important conclusion. A firm’s long run supply curve is the rising part of the LRMC curve from and above the minimum LRAC together with zero output for all prices less than the minimum LRAC.

Question 8.
State whether the statements are true or false. (MARCH-2013)
i) In a perfect competitive market structure, firms are price takers.
ii) All firms in the market produce homogeneous product.
Answer:
i) True
ii) True

Question 9.
In an economy, the level of income is Rs. 1,000 crores and the MPC is 0.8. If the investment increases by 200 crores. Calculate the total increase in income. (MARCH-2013)
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 8
Total increase in income is K x 200 Crores
That is 5 x 200 Crores = 1,000 Crores
Total increase in income = 1,000 Crores

Question 10.
Under perfect competition, a firm will not produce output level in cases under (MARCH-2013)
a) P > MC and
(b) P< MC. If so, what is the condition of profit maximising output in the short run. Give diagramatic illustration. (Hint: Short run equilibrium of a firm under perfect competition).
Answer:
Perfect Competition – Short Run Equilibrium In the model of price and output determination under perfectly competitive market conditions, price is determined by the impersonal market forces of supply and demand, and not by individual actions of buyers and sellers. The individual firm in such a market may be said to be a price-taker. Perfect competition is used by economists not so much as an attainable goal, but as a pure state against which all other markets can be measured.
For a market to be perfectly competitive, the following necessary conditions must, in general, prevail.
1) There must be many firms acting independently. Each firm is small enough relative to the size of the market, so that a single firm’s decision to either stop production entirely or to produce to full capacity will not have any perceptible effect on market supply to cause a change in market price.
2) Entry and exit from the market are free and frictionless for both the firms and consumers.
3) The products offered for sale are homogeneous and divisible into small units.
5) Buyers and sellers have perfect knowledge about the market conditions.
6) Price is determined by the impersonal market forces of supply and demand, and not by individual actions of buyers and sellers. The individual firm in such a market may be said to be a price-taker.
7) There is perfect knowledge among consumers about the price at which goods are being sold in the market. Sellers thus cannot manipulate the commodity price and thereby exploit the consumer.
8) There is perfect mobility of goods and factors of production among firms. Uniformity in factor prices is prevalent in the market.
If these necessary conditions prevail, the firm can lose its entire market if it sets its price above the market price. It can also expect no gain by lowering price, since it can sell all it wishes to produce at the market price. The competitive firm has no price discretion. Market price will not be affected by the independent action of a single firm. No firm is able to influence market price.
The objective of each firm is to maximize profit. Profit is the difference between revenue and cost of production. Marginal cost (MC) is the cost incurred to produce an additional unit of the product. If the per unit price of a commodity is greater than the marginal cost, the firm will be interested in producing more of the commodity. On the other hand if price falls below marginal cost, the firm will curtail its production. Equilibrium condition will prevail at a point where profit is maximized. This happens where price is equal to marginal cost (P = MC). Also at the point of equilibrium, the marginal cost curve must be upward sloping.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 9
In the diagram the given price is P. Again the firm will produce the level of output for which MC = MR. This occurs at point E, giving a level of output of Q. Notice that at this point, AR = AC, so the firm is making normal profit.
So, in the short run, a perfectly competitive firm could be making super normal profit, or a loss, or just normal profit, depending on the given market price. Note that if the firm’s losses get too big in the short run (i.e. AR < AVC) then it will have to shut down.

Question 11. What are the conditions that are to be fulfilled for a firm to be in short run equillibrium under perfectly competitive market conditions? (MAY-2014)
Answer:
A firm is in equilibrium when it has no tendency to change its level of output. It needs neither expansion nor contraction. It wants to earn maximum profits. In the words of A. W. Stonier and D.C. Hague, “A firm will be in equilibrium when it is earning maximum money profits.” ’ Equilibrium of the firm can be analysed in both short- run and long-run periods. A firm can earn the maximum profits in the short run or may incur the minimum loss. But in the long run, it can earn only normal profit. Short-run Equilibrium of the Firm : The short run is a period of time in which the firm can vary its output by changing the variable factors of production in order to earn maximum profits or to incur minimum losses. The number of firms in the industry is fixed because neither the existing firms can leave nor new firms can enter it. It’s Conditions: The firm is in equilibrium when it is earning maximum profits as the difference between its total revenue and total cost. For this, it essential that it must satisfy two conditions:
(1) MC = MR, and
(2) the MC curve must cut the MR curve from below at the point of equality and then rise upwards. The price at which each firm sells its output is set by the market forces of demand and supply. Each firm will be able to sell as much as it chooses at that price. But due to competition, it will not be able to sell at all at a higher price than the market price. Thus the firm’s demand curve will be horizontal at that price so that P = AR = MR for the firm.

Marginal Revenue and Marginal Cost Approach : The short-run equilibrium of the firm can be explained with the help of the marginal analysis as well as with total cost-total revenue analysis. We first take the marginal analysis under identical cost conditions. This analysis is based on the following assumptions:
1) All firms in an industry use homogeneous factors of production.
2) Their costs are equal. Therefore, all cost curves are uniform.
3) They use homogeneous plants so that their SAC curves are equal.
4) All firms are of equal efficiency.
5) All firms sell their products at the same price determined by demand and supply of the industry so that the price of each firm is equal to AR = MR.
Determination of Equilibrium: Given these assumptions, suppose that price OP in the competitive market for the product of all the firms in the industry is determined by the equality of demand curve D and the supply curve S at point E in Figure 1 (A) so that their average revenue curve (AR) coincides with the marginal revenue curve (MR).
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 10

Question 12. A fruits seller sells 600 Kg. of grapes at market price of ₹40 per kg. When price increases to ₹50 per kg, he is ready to sell 750kg of grapes. Find out the price elasticity of supply. (MARCH-2015)
Answer:
Elasticity of supply
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 11

Question 13.
A firm that maximizes profit under perfect competition will not produce an output where (MARCH-2015)
(a) P > MC and
(b) P<MC.
If so, what is profit maximizing output condition in the short run? Briefly illustrate with diagram.
Answer:
A firm is in equilibrium when it has no tendency to change its level of output. It needs neither expansion nor contraction. It wants to earn maximum profits. In the words of A.W. Stonier and D.C. Hague, “A firm will be in equilibrium when it is earning maximum money profits.”
Equilibrium of the firm can be analysed in both short- run and long-run periods. A firm can earn the maximum profits in the short run or may incur the minimum loss. But in the long run, it can earn only normal profit.
Short-run Equilibrium of the Firm:
The short run is a period of time in which the firm can vary its output by changing the variable factors of production in order to earn maximum profits or to incur minimum losses. The number of firms in the industry is fixed because neither the existing firms can leave nor new firms can enter it.
It’s Conditions:
The firm is in equilibrium when it is earning maximum profits as the difference between its total revenue and total cost.
For this, it essential that it must satisfy two conditions:
(1) MC = MR, and
(2) the MC curve must cut the MR curve from below at the point of equality and then rise upwards.
The price at which each firm sells its output is set by the market forces of demand and supply. Each firm will be able to sell as much as it chooses at that price. But due to competition, it will not be able to sell at all at a higher price than the market price. Thus the firm’s demand curve will be horizontal at that price so that P = AR = MR for the firm.
1. Marginal Revenue and Marginal Cost Approach: The short-run equilibrium of the firm can be explained with the help of the marginal analysis as well as with total cost-total revenue analysis. We first take the marginal analysis under identical cost conditions. This analysis is based on the following assumptions:
1) All firms in an industry use homogeneous factors of production.
2) Their costs are equal. Therefore, all cost curves are uniform.
3) They use homogeneous plants so that their SAC curves are equal.
4) All firms are of equal efficiency.
5) All firms sell their products at the same price determined by demand and supply of the industry so that the price of each firm is equal to AR = MR.
Determination of Equilibrium:
Given these assumptions, suppose that price OP in the competitive market for the product of all the firms in the industry is determined by the equality of demand curve D and the supply curve S at point E in Figure 1(A) so that their average revenue curve (AR) coincides with the marginal revenue curve (MR).
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 12

Question 14.
Will a profit-maximizing firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? (MAY-2015)
Answer:
No, a profit maximising firm will not produce in the range where the marginal cost is falling. This is because, at this range, his profit is not maximised. So he fixes his level of out output at the point where marginal cost equals marginal revenue.
This can be explained with the help of a diagram.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 13
As per the diagram, if the firm fixes output at the range where MC is falling his profit will not be maximised. Being profit maximising firm, he goes on producing OQ level of output corresponding to the point where MC=MR. This is at the rising part of MC. So his profit is maximised as shown in shaded area.

Question 15.
At the market price of ₹10, a firm supplies 4 units of output. The market price increases to ₹30. The price elasticity of the firm’s supply is 1.25. What quantity will the firm supply at the new price? (MAY-2015)
Answer:
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 14

Question 16.
Distinguish: (MARCH-2016)
a) Break even point
b) Shutdown point
Answer:
a) The point on the supply curve at which a firm earns
normal profit is called the break even point. The point of minimum average cost at which the supply curve cuts the LRAC curve is therefore the break even point of a firm.
b) In the short run the firm continues to produce as long as the price remains greater than or equal to the minimum of AVC. Therefore, along the supply curve as we move down, the last price-output combination at which the firm produces positive output is the point of minimum AVC where the SMC curve cuts the AVC curve. Below this, there will be no production. This point is called the short run shutdown point of the firm. In the long run, the shut down point is the minimum of LRAC curve.

Question 17.
Identify the wrong statements and correct the same. (MARCH-2016)
i) A perfectly competitive market deals in heterogeneous product.
ii) Each buyer Under perfect competition is a price taker.
iii) A perfectly competitive market is a market where there is only a single seller.
Answer:
i) Wrong. A perfectly competitive market deals with homogenous products
ii) Wrong. Each seller under perfect competition is a price taker.
iii) Wrong. A monopoly market is the market where there is only a single seller.

Question 18.
A firm under perfect competition wishes to maximize its profit in the short run. State and explain the conditions must hold for profit maximization. (MAY-2016)
Answer:
Perfect competition is a market situation where there are large number of buyers and sellers dealing with homogeneous commodities.
Conditions of equilibrium
i) MC = MR
ii) MC must cut MR from below It can be explained as,
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 15

Question 19.
Differentiate between the shut-down point and break even point. (MAY-2016)
Answer:
Shut down point refers to a situation where average revenue is equal to average variable cost. In other words it is the minimum pint of AVC. On the other hand, break even point is the no-profit, no loss point. It is the point where TR = TC or AR = AC.

Question 20.
Which one of the following condition is not satisfied by the long run equilibrium of a firm under perfect condition? (MARCH-2017)
a) P = AR
b) AR = MR
c) MC = MR
d) AFC = AVC
Answer:
AFC = AVC

Question 21.
Graphically explain the short run equilibrium of the firm under Perfect Competition. Draw separate diagram depicting the following conditions: (MARCH-2017)
i) The firm is earning super normal profit.
ii) The firm is earning only normal profit.
iii) The firm is incurring a loss
Answer:
The firm is earning super normal profit
Under perfect competition a firm’s super normal profit in the short run is maximised when 3 conditions are satisfied.
1) Market price P should be equal to marginal cost (MC) at equilibrium output q i.e, MC = MR = P
2) MC should be non-decreasing at Q, i.e. MC should cut MR from below.
3) P ≥ AVC
i) Since at point e AC curve touches AR curve, the firm enjoys normal profit only
ii) The firm is incurring a loss because of the free entry and exit of firms and buyers.
This can be explained with diagram.
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 16
Profit maximization under short run graph
Plus Two Microeconomics Chapter Wise Previous Questions Chapter 4 The Theory of The Firm Under Perfect Competition 17