CAP-I Mercantile Law & Economics: Mega Q&A + Student Summary (ICAN Nepal 2025) | CAP-I Exam Prep: Mercantile Law + Economics Explained (Highlights • Hashtags • Summary Pad)

CAP-I Mercantile Law & Fundamentals of Economics — Long Q&A with Highlights

Paraphrased from official Suggested Answers; key lines are cited so you can verify quickly. Long paragraphs are provided for student summaries. Mobile & dark-mode friendly.

Contents: Mercantile Law · Fundamentals of Economics · Student Summary Pad

Paper 2A — Mercantile Law (Contract, Partnership, Agency, Bailment, Sale of Goods)

Exam-hit areas include offer & acceptance, consideration, free consent, exceptions to Nemo Dat, partnership rights/duties, agency termination, and bailment vs pledge. A valid contract requires lawful consideration, competent parties, free consent, and lawful object. Acceptance must be absolute, by the offeree, communicated properly, and within a reasonable time; silence isn’t acceptance :contentReference[oaicite:0]{index=0} :contentReference[oaicite:1]{index=1}. Nepal’s recent suggested answers also revisit Nemo dat quod non habet with its practical exceptions for protecting bona fide buyers :contentReference[oaicite:2]{index=2} :contentReference[oaicite:3]{index=3}.

Q1) State the rules of a valid acceptance with quick exam notes.

Core rules: acceptance (i) by offeree only, (ii) absolute/unqualified, (iii) in prescribed/usual mode, (iv) properly communicated, (v) within reasonable time, (vi) silence ≠ acceptance, and (vii) before offer lapses/gets revoked. These points repeatedly appear in CAP-I solutions and are safe to memorize for 5-mark shorts. :contentReference[oaicite:4]{index=4}

#CAP_I #MercantileLaw #Acceptance #Contract #ExamKey

Q2) “All contracts are agreements, but all agreements are not contracts.” Explain.

An agreement becomes a contract only when legal essentials exist: lawful consideration, competent parties, free consent, and lawful object. Without these, an agreement stays non-enforceable. This distinction is emphasized across years of suggested answers. :contentReference[oaicite:5]{index=5} :contentReference[oaicite:6]{index=6}

#CAP_I #Contract #Agreement #Consideration #FreeConsent #LawfulObject

Q3) “Nemo dat quod non habet.” State the rule & its key exceptions.

Rule: a non-owner generally can’t pass better title than they possess. Why exceptions? To protect bona fide transactions in commerce—e.g., sale by mercantile agent, by person with voidable title before avoidance, sale under statutory power, etc. Know at least 4–5 exceptions for 5-mark answers. :contentReference[oaicite:7]{index=7}

#MercantileLaw #SaleOfGoods #NemoDat #Title #Exceptions

Q4) Partnership: Rights & Duties (quick list that examiners love).

Rights: take part, inspect books, share profits, interest on capital/advances, indemnity, retire, etc. Duties: act for common benefit, be faithful, provide full information/true accounts, share losses, avoid unauthorized acts. Cite sections when possible for crisp scoring. :contentReference[oaicite:8]{index=8} :contentReference[oaicite:9]{index=9}

#Partnership #Rights #Duties #CAP_I #Mercantile

Q5) Agency: How can an agency terminate by operation of law?

Typical triggers include completion of work, expiry of time, death/insanity, insolvency of the principal, destruction of subject matter, company liquidation, and removal of main agent (ending sub-agency). These are routinely asked in short notes. :contentReference[oaicite:10]{index=10}

#Agency #Termination #OperationOfLaw #MCC2074 #Mercantile

Q6) Bailment vs Pledge — clean differences for 5 marks.

Purpose: bailment is for repair/lease/safe custody; pledge is security for an obligation. Use: bailee’s use depends on terms; pledgee cannot use goods. Consideration: bailment may be gratuitous/non-gratuitous; pledge involves consideration. Include 4–5 crisp points in a table form if space permits. :contentReference[oaicite:11]{index=11}

#Bailment #Pledge #Differences #Security #Possession

Paper 2B — Fundamentals of Economics (Micro & Macro)

Examiners frequently test national income concepts & methods, market structures (perfect competition, monopoly, oligopoly), production function / law of variable proportions, and policy tools (monetary & fiscal). Robbins’ scarcity definition frames economics as choices under limited resources; be able to relate scarcity → choice → opportunity cost. :contentReference[oaicite:12]{index=12}

E1) “Economics is the science of scarcity and choice.” Justify.

Robbins defined economics as the study of human behavior where unlimited wants confront limited resources with alternative uses. Hence, individuals and societies must choose, generating trade-offs and opportunity costs. Use this logic to open long answers in macro or micro contexts. :contentReference[oaicite:13]{index=13}

#Economics #Scarcity #Choice #Robbins #OpportunityCost

E2) National Income: define & explain GDP, GNP, NNP, NI, PI, DI (with relations).

GDP measures final output within the domestic territory: GDP = C + I + G + (X − M). GNP adjusts GDP for net factor income from abroad: GNP = GDP + (R − P). NNP deducts depreciation: NNP = GNP − CCA. NI further adjusts for indirect taxes/subsidies to reflect factor incomes; PI and DI track incomes at the household level. Always mention that NI can be computed via product, income, or expenditure methods. :contentReference[oaicite:14]{index=14} :contentReference[oaicite:15]{index=15} :contentReference[oaicite:16]{index=16} :contentReference[oaicite:17]{index=17}

#NationalIncome #GDP #GNP #NNP #NI #PI #DI #Formulae

E3) Market structures snapshot: perfect competition, monopoly, oligopoly.

Perfect competition: many buyers/sellers, homogeneous product, free entry/exit, perfect knowledge; firms are price takers. Monopoly: single seller, no close substitutes, entry barriers; firm is a price maker. Oligopoly: few dominant firms with mutual interdependence; high selling costs, group behavior, indeterminate demand. Master 3–4 features each for short notes. :contentReference[oaicite:18]{index=18} :contentReference[oaicite:19]{index=19} :contentReference[oaicite:20]{index=20}

#Microeconomics #MarketStructure #PerfectCompetition #Monopoly #Oligopoly

E4) Production: law of variable proportions (short-run logic you can draw fast).

As more of a variable input (e.g., labor) is added to fixed inputs, total product first rises at an increasing rate, then diminishing, and finally may decline—yielding three stages. Use a TP/AP/MP sketch and explain the economic stage (where MP falls but remains positive). :contentReference[oaicite:21]{index=21}

#Production #VariableProportions #TP #AP #MP #ShortRun

E5) Monetary & Fiscal Policy: core instruments for 5-mark answers.

Monetary policy: to curb inflationary gaps, central banks tighten via open-market sales, higher reserve requirements, and higher discount/bank rate (plus selective tools like credit rationing, margin changes, moral suasion, direct controls). Fiscal policy: tax/borrow/compulsory savings to withdraw excess purchasing power; coordinate with monetary measures. Keep one compact paragraph ready. :contentReference[oaicite:22]{index=22} :contentReference[oaicite:23]{index=23}

#Macroeconomics #MonetaryPolicy #FiscalPolicy #OMOs #CRR #BankRate

E6) Quick NI methods (why examiners love tables).

Product method: sum of value added across sectors; Income method: sum of factor incomes (wages, rent, interest, profit); Expenditure method: sum of C+I+G (+ net exports). You can show a 3-row table and reconcile to the same NI; that cross-check itself fetches marks. :contentReference[oaicite:24]{index=24} :contentReference[oaicite:25]{index=25} :contentReference[oaicite:26]{index=26}

#NI_Methods #Product #Income #Expenditure #ValueAdded

Student Summary Pad

Write a one-paragraph summary for each section (Mercantile & Economics). Try to hit 120–160 words with 4–6 keywords (bold them) and one formula or case/section reference.

Sources: Official CAP-I Suggested Answers (paraphrased). See inline citations for exact lines.