Question : Which of the following statements is correct regarding the production possibility frontier?

I. It gives the combinations between two goods that can be produced when the resources of the economy are fully utilised.

II. It illustrates the production possibilities of the economy.

Option 1: Only I

Option 2: Only II

Option 3: Both I and II

Option 4: Neither I nor II

Question : Directions: Study the graph carefully and answer the following questions.

Which of the following statement is false?

Option 1: State A and E showed the same production in 1993 -94.

Option 2: There was no improvement in the production of cotton in State B during 1994-95.

Option 3: State A has produced maximum cotton during the given period

Option 4: Production of state C and D together is equal to that of state B during 1993 -94.

Question : "Marginal cost" equals:

Option 1: total cost minus total benefit for the last unit produced

Option 2: total cost divided by total benefit for the last unit produced

Option 3: total cost divided by quantity

Option 4: the change in total cost divided by the change in quantity

Question : Identify the incorrect equation.

Option 1: Revenue receipts = Tax revenue (net of State's share) less non-tax revenue

Option 2: Gross fiscal deficit = Total expenditure - (Revenue receipts + Non-debt creating capital receipts)

Option 3: Gross primary deficit = Gross fiscal deficit - Net interest liabilities

Option 4: Revenue deficit = Revenue expenditure - revenue receipts

Question : Which of the following statements is correct regarding the demand curve?
I. It is a graphical representation of the demand function.
II. It gives the quantity demanded by the consumer at each price.

Option 1: Both I and II

Option 2: Only II

Option 3: Neither I nor II

Option 4: Only I