CUET Economics 2025 Slot 4 Past Year Paper with Solutions

Q1:

Macro

>

National Income

Medium

Match List-I with List-II

List-I	List-II
(A) Capital formation	(I) Intermediate good
(B) Money Supply	(II) Final good
(C) Television purchased by a household	(III) Flow
(D) Steel supply for car manufacturing	(IV) Stock

Choose the correct answer from the options given below:

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (III), (B) - (II), (C) - (IV), (D) - (I)

(A) - (III), (B) - (IV), (C) - (II), (D) - (I)

Correct Answer

Option 4

Correct Answer

Explanation

Q2:

Macro

>

Government Budget

Medium

Match List-I with List-II

List-I	List-II
(A) Interest received from abroad	(I) revenue expenditure
(B) Partial repayment of loan	(II) capital expenditure
(C) Selling of equity of PSUs by the government	(III) revenue receipt
(D) Salaries given to government employees	(IV) capital receipt

Choose the correct answer from the options given below:

(A) - (III), (B) - (II), (C) - (IV), (D) - (I)

(A) - (IV), (B) - (II), (C) - (III), (D) - (I)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 1

Correct Answer

Explanation

Q3:

Micro

>

Production & Costs

Medium

Match List-I with List-II (TP : TOTAL PRODUCT; L: UNITS OF LABOUR)

List-I	List-II
(A) $TP/L$	(I) Total Product is maximum
(B) $\Delta TP/\Delta L$	(II) Marginal product
(C) $\sum MP$	(III) Total product
(D) $MP=0$	(IV) Average Product

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (IV), (B) - (III), (C) - (II), (D) - (I)

(A) - (IV), (B) - (II), (C) - (III), (D) - (I)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 3

Correct Answer

Explanation

Q4:

Macro

>

National Income

Medium

Choose the correct operation which will be adopted to arrive at GDP $_{MP}$ from NNP $_{MP}$ .

Add depreciation and add Net Factor Income From Abroad.

Subtract depreciation and add Net Indirect Taxes.

Add depreciation and subtract Net Factor Income From Abroad.

Subtract depreciation and subtract Net Factor Income From Abroad.

Correct Answer

Option 3

Correct Answer

Explanation

Q5:

Macro

>

National Income

Medium

Any new addition to capital stock in an economy is measured by _________.

Gross investment

Net investment

Depreciation

Inventory investment

Correct Answer

Option 2

Correct Answer

Explanation

Q6:

Micro

>

Production & Costs

Medium

Identify the correct sequence to establish the relation between marginal cost and average cost.

(A) When Marginal cost falls, average cost also falls.

(B) Marginal cost rises but average cost continues to fall.

(C) Marginal cost is equal to average cost.

(D) Marginal cost rises and average cost also rises.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 1

Correct Answer

Explanation

Q7:

Macro

>

Balance of Payments

Medium

Identify the correct statement from the following.

A balance of trade surplus always implies a balance of payments surplus.

Balance of current account is always greater than balance of trade.

A balance of payments deficit implies a current account surplus.

Any current account deficit must be financed by a capital account surplus.

Correct Answer

Option 4

Correct Answer

Explanation

Q8:

Macro

>

Balance of Payments

Medium

Which of the following is a component of the capital account?

Export of merchandise.

Remittances received from Japan.

Purchase of IT services from the USA.

Purchase of shares of a foreign company by an Indian resident.

Correct Answer

Option 4

Correct Answer

Explanation

Q9:

Macro

>

Income & Employment

Hard

Suppose at the initial equilibrium of $Y^*$ , there is an exogenous or autonomous shift in peoples' expenditure pattern – they suddenly become more thrifty.

What will be the sequential effect of the above on the economy?

(A) The sudden decline in MPC will imply a decrease in aggregate consumption spending and hence in aggregate demand.

(B) There emerges an excess supply in the economy, but that would mean a reduction in factor payments in the next round and hence a reduction in income.

(C) There is no change in the total value of savings.

(D) MPS of the economy increases, and hence MPC falls.

Choose the correct answer from the options given below:

(D), (B), (C), (A)

(D), (C), (B), (A)

(D), (A), (B), (C)

(C), (B), (D), (A)

Correct Answer

Option 3

Correct Answer

Explanation

Q10:

Micro

>

Production & Costs

Medium

Identify the incorrect statement about the relation between Marginal Product(MP) and Average Product (AP).

As long as the AP increases, it must be the case that MP is greater than AP.

when AP falls, MP has to be less than AP.

MP curve cuts AP curve from above at its maximum.

AP can fall even when MP is rising.

Correct Answer

Option 4

Correct Answer

Explanation

Q11:

Micro

>

Consumer Behaviour

Medium

Which of the following indicates a situation of consumer's equilibrium for a rational consumer consuming two goods?

The point at which the budget line just touches (is tangent to), one of the indifference curves.

The absolute value of the slope of the indifference curve (MRS) is greater than that of the budget line (price ratio) at that point.

A point below the budget line.

The point at which the consumer spends all his/her income and the budget line intersects one of the indifference curves.

Correct Answer

Option 1

Correct Answer

Explanation

Q12:

Micro

>

Consumer Behaviour

Medium

Which of the following are true about indifference curves?

(A) All the points lying on an indifference curve provide the consumer with different levels of satisfaction.

(B) Indifference curves are convex to the origin due to law of Diminishing Marginal Rate of Substitution.

(C) Higher indifference curve gives greater level of utility.

(D) In the case of perfect substitutes, indifference curves are straight lines.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 4

Correct Answer

Explanation

Q13:

Micro

>

Production & Costs

Medium

Identify the correct sequence for a firm operating in the short run.

(A) Total product increases at a decreasing rate.

(B) Marginal product becomes zero

(C) Marginal product increases

(D) More and more units of variable factor are employed.

Choose the correct answer from the options given below:

(D), (C), (B), (A)

(B), (C), (A), (D)

(D), (C), (A), (B)

(C), (B), (D), (A)

Correct Answer

Option 3

Correct Answer

Explanation

Q14:

Macro

>

Income & Employment

Medium

If, in an economy, the minimum level of consumption is 45 and 80% of an increase in income(Y) is consumed, what will be the consumption function of this economy?

45 + 80Y

-45 + 20Y

-45 + 0.80Y

45 + 0.80Y

Correct Answer

Option 4

Correct Answer

Explanation

Q15:

Micro

>

Production & Costs

Medium

Choose the correct options with reference to short-run average costs.

(A) Average total cost = total cost / quantity of output

(B) Average total cost = average variable cost + average fixed cost

(C) Average variable cost = average total cost - average fixed cost

(D) Average fixed cost = average variable cost - average cost

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 2

Correct Answer

Explanation

Q16:

Micro

>

Consumer Behaviour

Medium

Which of the following will NOT cause a change in the budget set of a consumer?

Change in quantities of goods purchased by the consumer.

Change in the prices of both the goods purchased by the consumer.

Change in the income of the consumer.

change in the price of any one of the two goods purchased by the consumer, price of the other good remaining same.

Correct Answer

Option 1

Correct Answer

Explanation

Q17:

Macro

>

Government Budget

Medium

When did GST came in effect in India?

1 July, 2017.

1 April, 2017.

1 July, 2016.

1 April, 2016.

Correct Answer

Option 1

Correct Answer

Explanation

Q18:

Micro

>

Introduction

Medium

Which of the following depicts the central problem of economy, 'How to produce'?

Whether or not medical services should be provided for free to people below poverty line.

Whether to produce more food products or more textiles.

Whether to use more labour for production or more machines.

how should the produce in the economy be distributed among individuals.

Correct Answer

Option 3

Correct Answer

Explanation

Q19:

Micro

>

Production & Costs

Easy

In an economy producing only two goods X and Y, the opportunity cost of producing 5 units of good X is 3 units of good Y.

The above statement implies that _____.

(choose the correct option)

A combination of 5X and 3Y can be produced in the economy.

A combination of 3X and 5Y can be produced in the economy.

To produce 5 units of good X, production of good Y needs to be reduced by 3 units.

To produce 3 units of good X, production of good Y needs to be reduced by 5 units.

Correct Answer

Option 3

Correct Answer

Explanation

Q20:

Macro

>

Government Budget

Medium

Identify the correct statements from the following.

(A) Borrowings are non-debt creating capital receipt.

(B) Revenue deficit is same as borrowings of the government.

(C) When a government spends more than it collects by way of revenue, it incurs a budget deficit.

(D) The revenue deficit includes only such transactions that affect the current income and expenditure of the government.

Choose the correct answer from the options given below:

(A) and (D) only

(B) and (C) only

(C) and (D) only

(A), (C) and (D) only

Correct Answer

Option 3

Correct Answer

Explanation

Q21:

Macro

>

Income & Employment

Easy

Given the equation of the consumption function as $C = \bar{C} + cY$ , what does $\bar{C}$ donate?

Average propensity to consume.

marginal propensity to consume.

induced consumption

autonomous consumption.

Correct Answer

Option 4

Correct Answer

Explanation

Q22:

Macro

>

Income & Employment

Medium

The investment multiplier is equal to which of the following?

Ratio of investment to income.

Ratio of change in investment to change in income

Reciprocal of marginal propensity to save.

Ratio of change in income to change in consumption.

Correct Answer

Option 3

Correct Answer

Explanation

Q23:

Macro

>

Balance of Payments

Hard

"GST has improved India's ranking in terms of ease of doing business. The introduction of GST has attracted foreign investors in large numbers."

What will be the sequential impact of the above on the exchange rate of the rupee in the international money market?

(A) The supply curve of foreign exchange shifts to the right.

(B) The exchange rate starts falling.

(C) There is an appreciation of the rupee on the international money market.

(D) An increase in foreign investment increases the supply of foreign exchange.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(D), (C), (B), (A)

(D), (A), (B), (C)

(C), (B), (D), (A)

Correct Answer

Option 3

Correct Answer

Explanation

Q24:

Macro

>

National Income

Medium

From the following, find the right sequence for measuring National Income by Value Added Method:

(A) Subtract the value of depreciation and net indirect taxes and add net factor income from abroad to arrive at national income.

(B) Estimate the sum total value of output in the primary, secondary and tertiary sectors in the economy.

(C) Estimate the value added of each sector by subtracting intermediate consumption from the value of output for every sector.

(D) Calculate gross value added as the sum of value added of the three sectors.

(D), (B), (C), (A)

(B), (C), (D), (A)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation

Q25:

Macro

>

Income & Employment

Medium

Which of the following statement is true?

MPC can be greater than 1

MPS can be less than 0.

The value of APC rises with increase in income.

The value of the investment multiplier is always greater than 1.

Correct Answer

Option 4

Correct Answer

Explanation

Q26:

Macro

>

Government Budget

Easy

Which of the following are the features of public goods?

Rivalrous and excludable.

Rivalrous and non-excludable.

Non-Rivalrous and non-excludable.

Non-rivalrous and excludable.

Correct Answer

Option 3

Correct Answer

Explanation

Q27:

Macro

>

National Income

Medium

Identify the correct statement from the following.

A car purchased by a taxi driver is a capital good.

A television purchased by a family is a capital good.

Copper used in making utensils is a capital good.

Computers purchased by an educational institution are intermediate goods.

Correct Answer

Option 1

Correct Answer

Explanation

Q28:

Macro

>

Income & Employment

Medium

Given that in an economy, consumption function is

C = 80 + 0.80Y and autonomous investment (I) = 120,

Match List-I with List-II

List-I	List-II
(A) Equilibrium level of income	(I) 400
(B) Break-even point	(II) 120
(C) Investment multiplier	(III) 5
(D) Value of savings at equilibrium	(IV) 1000

Choose the correct answer from the options given below:

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (III), (C) - (IV), (D) - (II)

(A) - (IV), (B) - (I), (C) - (III), (D) - (II)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 3

Correct Answer

Explanation

Q29:

Macro

>

Income & Employment

Medium

In the excess demand condition, which of the following measures may be adopted in the economy to control it?

(A) Increase in repo rate.

(B) Decrease in reverse repo rate.

(C) Sale of government securities in the open market.

(D) Increase in subsidies.

Choose the correct answer from the options given below:

(A) and (D) only

(A) and (C) only

(C) and (D) only

(B) and (C) only

Correct Answer

Option 2

Correct Answer

Explanation

Q30:

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Budget Set	(I) $-(P_1/P_2)$
(B) Slope of the budget line	(II) $M/P_1$
(C) Horizontal intercept of the budget line	(III) $P_1 X_1 + P_2 X_2 \le M$
(D) Vertical intercept of the budget line	(IV) $M/P_2$

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (III), (B) - (I), (C) - (II), (D) - (IV)

(A) - (III), (B) - (I), (C) - (IV), (D) - (II)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q31:

Macro

>

Balance of Payments

Medium

Which of the following is not a merit of the flexible exchange rate system?

Exchange rates are prone to speculative attack on a currency.

Movements in the exchange rate automatically take care of the surpluses and deficits in the BoP.

Countries gain independence in conducting their monetary policies.

Large stocks of foreign exchange reserves are not required.

Correct Answer

Option 1

Correct Answer

Explanation

Q32:

Macro

>

National Income

Medium

Which of the following are used to estimate GDP by expenditure method?

(A) The final consumption expenditure on the goods and services produced by the firm.

(B) The expenditure that the government makes on the final goods and services produced by firm.

(C) Compensation of employees.

(D) The final investment expenditure

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q33:

Micro

>

Consumer Behaviour

Easy

The total satisfaction derived from consuming the given amount of commodity X is known as _______

Marginal utility

Total utility

Average utility

Maximum utility

Correct Answer

Option 2

Correct Answer

Explanation

Q34:

Micro

>

Market Equilibrium

Easy

If price of a commodity rises from Rs. 10 to Rs. 15, its supply increases by 20%.

calculate the price elasticity of supply for this commodity.

0.4

0.5

1.25

2.5

Correct Answer

Option 1

Correct Answer

Explanation

Q35:

Micro

>

Production & Costs

Medium

Choose the incorrect option from the following with reference to production in the short run.

The law of variable proportions is applicable.

The firm can change more than one factor in short run.

The firm experiences returns to a factor.

The law of diminishing marginal returns is applicable.

Correct Answer

Option 2

Correct Answer

Explanation

Q36:

Macro

>

National Income

Medium

A farmer produces cotton in his farm and sells it to the yarn making firm at Rs 2500. The yarn making firm sells this yarn to the cloth mill for Rs 4000, who make cloth from it and this cloth is sold to a readymade garments factory for Rs 6500. The ready made garments factory sells the garments to the retailer for Rs 9000 and makes a profit of Rs 2000.

Assuming that the farmer does not incur any intermediate cost, what will be total value added in the above process?

Rs 2500

Rs 9000

Rs 11000

Rs 22000

Correct Answer

Option 2

Correct Answer

Explanation

Q37:

Macro

>

Income & Employment

Medium

Aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. Which of the following is not the assumptions behind this principle?

Price of final goods is constant.

Interest rates are constant.

Aggregate supply is perfectly elastic.

Aggregate demand is perfectly elastic.

Correct Answer

Option 4

Correct Answer

Explanation

Q38:

Macro

>

Balance of Payments

Medium

Which of the following is not a source of demand for foreign exchange in India?

Indian investors investing abroad.

Foreign direct investment from abroad.

Import of machines from abroad.

Repayment of loans.

Correct Answer

Option 2

Correct Answer

Explanation

Q39:

Micro

>

Production & Costs

Medium

Consider a production function $q = f (x_1, x_2)$ where the firm produces q amount of output using $x_1$ amount of factor 1 and $x_2$ amount of factor 2. Now suppose the firm decides to increase the employment level of both the factors t (t > 1) times.

Identify the correct statement from the following.

$f(tx_1, tx_2) = tf(x_1, x_2)$ implies constant returns to scale.

$f(tx_1, tx_2) > tf(x_1, x_2)$ implies decreasing returns to scale.

$f(tx_1, tx_2) < tf(x_1, x_2)$ implies increasing returns to scale.

$f(tx_1, tx_2) = f(x_1, x_2)$ implies constant returns to scale.

Correct Answer

Option 1

Correct Answer

Explanation

Q40:

Macro

>

Income & Employment

Medium

Identify the correct expression to calculate equilibrium level of income of an economy.

$(\bar{C} + \bar{I})/MPC$

$(\bar{C} + \bar{I})/MPS$

$\bar{C}/MPC$

$\bar{I}/MPS$

Correct Answer

Option 2

Correct Answer

Explanation

Q41:

Macro

>

Money & Banking

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Demand and supply of money

Money supply, like money demand, is a stock variable. 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.

where, CU is currency (notes plus coins) held by the public and DD is net demand deposits held by commercial banks. The word ‘net’ implies that only deposits of the public held by the banks are to be included in money supply. The interbank deposits, which a commercial bank holds in other commercial banks, are not to be regarded as part of money supply. M1 and M2 are known as narrow money. M3 and M4 are known as broad money. These measures 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.

If the M1 in the economy is Rs 375 crores, net time deposits of commercial banks is Rs 250 crores and total deposits with post office savings organizations is Rs50 crores, then what will be M4?

375

625

675

575

Correct Answer

Option 3

Correct Answer

Explanation

Q42:

Macro

>

Money & Banking

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Demand and supply of money

Money supply, like money demand, is a stock variable. 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.

where, CU is currency (notes plus coins) held by the public and DD is net demand deposits held by commercial banks. The word ‘net’ implies that only deposits of the public held by the banks are to be included in money supply. The interbank deposits, which a commercial bank holds in other commercial banks, are not to be regarded as part of money supply. M1 and M2 are known as narrow money. M3 and M4 are known as broad money. These measures 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.

M3 does not include which of the following?

CU is currency (notes plus coins) held by the public

interbank deposits

Net time deposits of commercial banks

net demand deposits

Correct Answer

Option 2

Correct Answer

Explanation

Q43:

Macro

>

Money & Banking

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Demand and supply of money

Money supply, like money demand, is a stock variable. 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.

where, CU is currency (notes plus coins) held by the public and DD is net demand deposits held by commercial banks. The word ‘net’ implies that only deposits of the public held by the banks are to be included in money supply. The interbank deposits, which a commercial bank holds in other commercial banks, are not to be regarded as part of money supply. M1 and M2 are known as narrow money. M3 and M4 are known as broad money. These measures 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.

Which of the following is the correct pair of narrow money?

M2, M3

M1, M2

M3, M4

M1, M4

Correct Answer

Option 2

Correct Answer

Explanation

Q44:

Macro

>

Money & Banking

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Demand and supply of money

Money supply, like money demand, is a stock variable. 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.

where, CU is currency (notes plus coins) held by the public and DD is net demand deposits held by commercial banks. The word ‘net’ implies that only deposits of the public held by the banks are to be included in money supply. The interbank deposits, which a commercial bank holds in other commercial banks, are not to be regarded as part of money supply. M1 and M2 are known as narrow money. M3 and M4 are known as broad money. These measures 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.

Which is the most commonly used measure of money supply?

M1

M2

M3

M4

Correct Answer

Option 3

Correct Answer

Explanation

Q45:

Macro

>

Money & Banking

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Demand and supply of money

Money supply, like money demand, is a stock variable. 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.

where, CU is currency (notes plus coins) held by the public and DD is net demand deposits held by commercial banks. The word ‘net’ implies that only deposits of the public held by the banks are to be included in money supply. The interbank deposits, which a commercial bank holds in other commercial banks, are not to be regarded as part of money supply. M1 and M2 are known as narrow money. M3 and M4 are known as broad money. These measures 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.

Which of the following is not true about currency notes and coins?

They are fiat money

There are legal tenders

They have intrinsic value like gold and silver

They cannot be refused by any citizen of the country for settlement of any kind of transaction

Correct Answer

Option 3

Correct Answer

Explanation

Q46:

Micro

>

Market Equilibrium

Medium

Suppose there is a market consisting of identical firms producing the same quality of salt.

Suppose the market demand curve and the market supply curve for salt are given by:

$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$

$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$

Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.

If the demand for salt increases supply remains the same and the new demand curve is

$Q_D = 400 - p$

What will be the new equilibrium price and quantity?

Rs 90

Rs 80

Rs 70

Rs 60

Correct Answer

Option 1

Correct Answer

Explanation

Q47:

Micro

>

Market Equilibrium

Medium

Suppose there is a market consisting of identical firms producing the same quality of salt.

Suppose the market demand curve and the market supply curve for salt are given by:

$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$

$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$

Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.

Find the equilibrium price of salt in this market.

Rs 10

Rs 35

Rs 55

Rs 65

Correct Answer

Option 4

Correct Answer

Explanation

Q48:

Micro

>

Market Equilibrium

Medium

Suppose there is a market consisting of identical firms producing the same quality of salt.

Suppose the market demand curve and the market supply curve for salt are given by:

$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$

$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$

Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.

If demand for salt increases, and there is no change in the equilibrium price in the market, how does it affect the market?

Increase in demand = increase in supply

Demand had increased but supply is unchanged.

Increase in demand = Decrease in supply

Increase in demand is greater than Increase in supply

Correct Answer

Option 1

Correct Answer

Explanation

Q49:

Micro

>

Market Equilibrium

Medium

Suppose there is a market consisting of identical firms producing the same quality of salt.

Suppose the market demand curve and the market supply curve for salt are given by:

$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$

$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$

Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.

Which of the following expressions will be used for calculating excess supply of salt in the market?

$p - 35$

$p - 70$

$2(p - 35)$

$2(35 - p)$

Correct Answer

Option 3

Correct Answer

Explanation

Q50:

Micro

>

Market Equilibrium

Medium

Suppose there is a market consisting of identical firms producing the same quality of salt.

Suppose the market demand curve and the market supply curve for salt are given by:

$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$

$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$

Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.

If the government imposes a price ceiling of Rs 31 on salt, what will be the volume of excess demand/ supply in the market?

Excess demand of 68 units.

Excess supply of 68 units.

Excess demand of 330 units.

Excess supply of 220 units.

Correct Answer

Option 1

Correct Answer

Explanation

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CUET Economics 2025 15 May Shift 1 Past Year Question Paper

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