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 1.The slope of the production possibility curve is the A. Marginal rate of exchange B.Margial rate of substitution C. Average rate of transformation D. Marginal rate of transformation ✓ Ans: D  2.   Solution : 5Q2+20Q+20 MC= ∆C/∆Q 5×2Q+20 MC=10Q+20......(1) P=100-3Q.....(2) TR=PQ TR=(100-3Q)Q  {P=100-3Q} TR= 100Q-3Q×Q MR= 100-6Q ....(3) MC=MR 10Q+20100-6Q 10Q+6Q=100-20 16Q=80 Q=80/16 Q=5 From (2). P=100-3Q P=100-3(5) P=100-15 P=85 Derivation of Keynes Multiplier MPC= Marginal propensity to consume MPS= Marginal propensity to save I= investment ∆I= Changed Investment S= Saving ∆S=Changed Saving K= Keynes Multiplier C= Consumption Y=Income MPC+MPS=1 MPS=1-MPC---(1) K= 1/1-MPC or K= 1/MPS----- ( From-- 1) ∆Y= K.∆I ( K = Keynes Multiplier) K∆I= ∆Y K= ∆Y/∆I S=Y-C Saving = Income - Consumption ∆S=∆Y - ∆C ---(2) ∆S=∆I---- (3) K= ∆Y/∆I K= ∆Y/∆S ----(from 3) K=∆Y/(∆Y - ∆C) -----( from  2) Dividing on Numerator a...