Economy (CDS-Solved Paper)

Human development index (HDI) is an index of life expectancy, education and per capita income indicators.

There are three dimensions of index—Long and healthy life, knowledge and a decent standard of living. Hence, option (c) is not a dimension of the human development Index.

In economics, Gini Coefficient represents income or wealth distribution of a nation’s residents and most commonly used to measure income inequality.

It was developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper ‘Variability and Mutability’.

New Development Bank, formerly, referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS States (Brazil, Russia, India, China, South Africa).

The bank is headquartered in Shanghai (China). The first regional office of the NDB is in Johannesburg (South Africa). As Canada is not a member of BRICS, it is not a member of the New Development Bank.

The South Asian Association for Regional Cooperation (SAARC) is the regional inter-governmental organisation in South Asia.
SAARC was founded in Dhaka on 8th December, 1985. Its secretariat is based in Kathmandu (Nepal).

The organisation promotes development of economic and regional integration. Its member states include Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

Total Utility (TU) means total benefit obtained by a person from consumption of goods and services, whereas, Marginal Utility (MU) means the amount of utility, a person gains from the consumption of each successive unit of a commodity.
Relation between total utility and marginal utility
(i) When total utility is maximum, marginal utility is zero
(ii) When total utility increase, marginal utility is positive
(iii) When total utility decrease, marginal utility is negative
Hence, option (d) is not correct.

An indifference curve is a locus of combinations of goods which derive the same level of satisfaction so that the consumer is indifferent to any of the combination he consumes.

Hence statement (1) is correct. Higher indifference curve means higher level of satisfaction as higher indifference curve consists of more of two goods or the same quantity of one good and more quantity of the other good.

Hence statement (2) is correct. Also, two indifference curves cannot cut each other. Thus, statement (3) is incorrect.

A joint-stock company is a business entity in which shares of the company's stock can be bought and sold by share holders. Each shareholder owns company stock in proportion, evidenced by their shares. All the above are features of a joint-stock company

(i) It has a legal existence .
(ii) There is limited liability of shareholders for satisfaction of the debt of the company the personal property of the shareholders cannot be used.
(iii) It has a democratic management.
(iv) It has a collective ownership.

When some goods or productive factors are completely fixed in amount regardless of price, the supply curve is upward sloping to the right. Supply curve is a graphic representation of the correlation between the cost of a good or service and the quantity supplied for a given period.

The upward sloping means that the firms will be willing to increase the production in response to a higher market price because the higher price may make additional production profitable.

Subprime crisis is Economic recession that took place in the USA from 2007 to 2010. Economic recession is a slow down or massive contraction in economic activities.

The primary cause was the collapse of the housing bubble. As a result of this crisis, job growth, saving and investment reduced to abysmal.

Monopolistic competition is situation where many firms are competing against each other but selling products that are distinctive, this type of situation leads to imperfect competition in the market. This market situation is against the interest of consumers.

Perfect competition is the situation prevailing in a market in which buyers and sellers are so numerous and well informed that all elements of monopoly are absent and the market price of a commodity is beyond the control of individual buyers and sellers.

Imperfect competition is the situation prevailing in a market in which elements of monopoly allow individual producers or consumers to exercise some control over market prices.

An oligopoly is a market form wherein a market or industry is dominated by a small number of large sellers.