NEB Class 12 Management Economics (NEB Released Items) Question Paper 2081 (Set B) Nepal

The direct personal interview method of collecting primary data is considered costly because it requires significant resources - time, trained personnel/investigators, and travel expenses - to conduct face-to-face interactions with respondents who may be spread over a wide geographical area.

Any two of the following direct taxes: property tax, income tax, land tax, vehicle tax, gift tax.

Example answer: Income tax and property tax.

Total revenue: $TR = 8Q - 3Q^2$.

Average revenue:

Therefore, the average revenue function is $AR = 8 - 3Q$.

Introduction and statement of the theory

The risk-bearing theory of profit was propounded by the American economist Professor Frederic Barnard Hawley. According to him, profit is the reward for taking risk in business. Risks are inherent in all businesses, and the entrepreneur who bears these risks is rewarded with profit. In Hawley's words: "The profit of an entrepreneur is not the reward of management or coordination but of the risk and responsibility."

Assumptions

1. Every business involves some degree of risk and uncertainty.
2. There is a proportional relationship between risk and profit - high risk gives high profit, low risk gives low profit, and no risk gives no profit.

Explanation of the theory (types of risk and creation of profit)

Entrepreneurs earn profit as a reward for assuming various types of risk associated with running a business. Each type of risk involves a potential cost or loss the entrepreneur must manage:

1. Replacement risk - the potential loss arising from the need to replace or maintain physical assets over time.
2. Risk proper - measurable and foreseeable risks (such as product marketability) that can be anticipated using statistical data.
3. Obsolescence - the danger that products, technologies or processes become outdated due to advancement or changes in consumer preference, causing a fall in the value of assets.
4. Uncertainty - unquantifiable and unpredictable risks that cannot be measured or anticipated accurately.

Thus, one who deals with greater risk in business can earn more profit; if a businessman were not rewarded with profit, he would not be willing to bear the risk. According to Hawley, the entrepreneur gets profit precisely because of bearing these risks in business.

Definition

A market economic system is an economic system in which the production, distribution and pricing of goods and services are primarily determined by the forces of demand and supply in a competitive marketplace, with minimal government interference.

Features (any four explained):

1. Private property - individuals and firms have the right to own, use and dispose of property and the means of production.
2. Price mechanism - prices are determined by the interaction of demand and supply, and they guide the allocation of resources.
3. Profit motive - the desire to earn profit is the main driving force behind production and economic activity.
4. Competition - many buyers and sellers compete freely, which promotes efficiency and consumer choice.

(Other features include economic freedom, consumer sovereignty, and the important role of the entrepreneur.)

Foreign employment has both positive impacts and significant challenges. An evaluation of its impacts and challenges follows.

a. Positive impacts of foreign employment

1. Improved living conditions - remittances enable families to renovate their homes and create a safer, more comfortable environment, raising overall living standards.
2. Educational support - the money sent home helps children afford schooling, giving them the chance to gain knowledge and skills that improve future job prospects.
3. Financial stability - earnings provide a steady income source, allowing families to meet daily needs more comfortably and reducing dependence on local, often unpredictable, income sources.
4. Local economic growth - spending on renovation and education in the village benefits local businesses, promoting community-level economic growth.

b. Challenges to well-being

1. Long working hours - extended hours with little rest cause fatigue, harming physical and mental health and reducing the ability to enjoy free time.
2. Homesickness - being away from family and familiar surroundings causes emotional distress, isolation and loneliness, which affect motivation.
3. Cultural adjustment - adapting to a new culture, language and social norms is stressful and can lead to misunderstanding or feelings of exclusion.
4. Job (dis)satisfaction - the combination of stress, isolation and physical strain can make migrant workers question their decision to work abroad, lowering happiness, job performance and mental well-being.

Conclusion: While foreign employment brings remittances and improved living standards, it poses serious challenges to the worker's physical health, emotional well-being and social adjustment, which must be addressed through better protection and support mechanisms.