The issue of inflation is addressed from both demand and supply sides. demand management is achieved by measures such as postponing public expenditure, mopping up excess liquidity either through taxes or savings schemes, etc. On the supply side, the mechanism of Public Distribution System (PDS) ensures availability of essential commodities for the vulnerable sections of society. This helps to maintain price levels. Coupled with this is the open market sale of rice and wheat resorted to by FCI from its buffer stock in times of price rise.

Correct Option: B

The issue of inflation is addressed from both demand and supply sides. demand management is achieved by measures such as postponing public expenditure, mopping up excess liquidity either through taxes or savings schemes, etc. On the supply side, the mechanism of Public Distribution System (PDS) ensures availability of essential commodities for the vulnerable sections of society. This helps to maintain price levels. Coupled with this is the open market sale of rice and wheat resorted to by FCI from its buffer stock in times of price rise.

Barter is a system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. Barter, as a replacement for money as the method of exchange, is used in times of monetary crisis, such as when the currency may be either unstable or simply unavailable for conducting commerce.

Correct Option: D

Barter is a system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. Barter, as a replacement for money as the method of exchange, is used in times of monetary crisis, such as when the currency may be either unstable or simply unavailable for conducting commerce.

Marginal Utility = Change in Total Utility / Change in number of Units consumed. The first component of the formula is to calculate the change in total utility. The second component of the marginal utility formula is the change in the number of units that have been consumed. This is done by subtracting the number that is currently being consumed from a previously consumed amount. So Marginal Utility (MU) from 10th Unit = TU₁₀ - TU₉= 15 – 20= –5

Correct Option: D

Marginal Utility = Change in Total Utility / Change in number of Units consumed. The first component of the formula is to calculate the change in total utility. The second component of the marginal utility formula is the change in the number of units that have been consumed. This is done by subtracting the number that is currently being consumed from a previously consumed amount. So Marginal Utility (MU) from 10th Unit = TU₁₀ - TU₉= 15 – 20= –5

According to the Keynesian Consumption theory, “men are disposed, as a rule and on average, to increase their consumption as their income increases, but not by as much as the increase in their income.” Another feature of consumer behavior is that when income increases, people do not spend their entire incremental income on consumption. They save a part of it for their financial security during the period of unemployment, illness, etc. In simple words, the marginal propensity to consume decreases, i.e., households spend a decreasing proportion of marginal income on consumption. That is why families on lower income scale save a lower percentage of their income and those on higher scale of income save a larger proportion of their income.

Correct Option: A

According to the Keynesian Consumption theory, “men are disposed, as a rule and on average, to increase their consumption as their income increases, but not by as much as the increase in their income.” Another feature of consumer behavior is that when income increases, people do not spend their entire incremental income on consumption. They save a part of it for their financial security during the period of unemployment, illness, etc. In simple words, the marginal propensity to consume decreases, i.e., households spend a decreasing proportion of marginal income on consumption. That is why families on lower income scale save a lower percentage of their income and those on higher scale of income save a larger proportion of their income.

Normal profit or economic profit is an economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero. Simply put, normal profit is the minimum level of profit needed for a company to remain competitive in the market. In a sense, normal profit is the same as net profit which is calculated by subtracting a company’s total expenses from total revenue, thus showing what the company has earned (or lost) in a given period of time. Accounting profit occurs when revenues are greater than costs, and not equal, as in the case of normal profit.

Correct Option: D

Normal profit or economic profit is an economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero. Simply put, normal profit is the minimum level of profit needed for a company to remain competitive in the market. In a sense, normal profit is the same as net profit which is calculated by subtracting a company’s total expenses from total revenue, thus showing what the company has earned (or lost) in a given period of time. Accounting profit occurs when revenues are greater than costs, and not equal, as in the case of normal profit.