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4951.

In which market form, there is perfect knowledge among buyers and sellers?

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Oligopoly
Monopolistic Competition
Monopoly
None of these

Solution :N/a
Discussion
4952.

Market for a good is in equilibrium. Explain the chain of reactions In the market If the price is: (i) higher than equilibrium price, and (ii) lower than equilibrium price.

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Solution :(i) It is a CASE of Excess SUPPLY.
(II) It is a case of Excess DEMAND.
Discussion
4953.

There is inverse realtion between price and demand for the product of a under :

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MONOPOLY only
MONOPOLISTIC COMPETITION only
Both under monopoly and monopolistic competition
Perfect competition only

Answer :C
Discussion
4954.

How does TR change with output when MR is zero ?

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SOLUTION :TR is MAXIMUM and CONSTANT .
Discussion
4955.

What si meant by equilibrium output of a producer ?

Answer»

Solution :EQUILIBIRIUM output of a PRODUCER is where-1. MR= MCMC CUTS MR from below.
Discussion
4956.

A consumer consumes only two goods X and Y. Explain the conditions of consumer's equilibrium using Utility Analysis.

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Solution :Assuming that a consumer is CONSUMING only two goods X and Y, the CONDITIONS of consumer's equilibrium (Utility Analysis) are:
(a) `(MU_(X))/(P_(X)) = (MU_(Y))/(P_(Y))`
(b) `MU` of a GOOD falls as more units of the goods are consumed.
Explanation:
(a) Suppose `(MU_(x))/(P_(x)) gt (MU_(Y))/(P_(Y))` The consumer will not be in equilibrium because per rupee MU of X is greater than per rupee MU of Y. This will induce the consumer to buy more of X by reducing expenditure on Y, leading to fall in `MU_(X) " and rise in " MU_(Y)`. This will continue till the consumer ATTAINS the condition of `(MU_(X))/(P_(X)) = (MU_(Y))/(P_(Y))`
(b) Unless MU of a good falls, as more units are consumed the consumer will not REACH the equilibrium.
Discussion
4957.

What happens to profits in the long run of firms are free to enter in the industry?

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Solution :When existing FIRMS are earning profit, freedom of entry INDUCES now firns to enter the industry. This raises market supply which in turn leads lo fall in market PRICE, Profits fall and continue to fall, TILL each firm is earning zero econornic profit or norrmel profit.
Discussion
4958.

Define the following terms: (a) Equilibrium, (b) Equilibrium price, (c) Equilibrium quantity, (d) Market equilibrium.

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Solution :(a) In economics, economic equilibrium is a SITUATION in which economic forces such as supply and DEMAND are balanced and in the ABSENCE of external influences the values of economic variables will not CHANGE.
(B) Equilibrium price is the price at which quantity demanded is equal to the quantity supplied in the market.
(c) Equilibrium quantity is the qunatity at which quantity demanded of a commodity is equal to the quantity supplied.
(d) Market equilibrium is a situation where market demand is equal to market supply.
Discussion
4959.

Due to increase in price of infuts, equilibrium price

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rises
falls
remains constant
none of these

Answer :A
Discussion
4960.

In deciding "How to produce" the economy should consider,

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Labour intersive Techniques
Capital Intensive Techniques
Both (a) and (b)
Neither (a) nor (b)

Solution :C. This problem refers to SELECTION of technique to be USED for production of goods and services. A GOOD can be produced using DIFFERENT techniques of production. By ‘technique’, we mean which particular combination of inputs to be used. Generally, techniques are classified as: Labour intensive techniques (LIT) and Capital intensive techniques (CIT).i. In Labour intensive technique, more labour and less capital (in the form of machines, etc.) is used.ii. In Capital intensive technique, there is more capital and less labour utilization.
Discussion
4961.

Differentiate between perfect competitin and monopolistic cometition.

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Discussion
4962.

Make a Lorenz curve of the following data:

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Discussion
4963.

A commondity with large number of close subtitutes shows high elasticity of demand.

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Solution :Demand for a commodty with LARGE number of SUBSTITUTES will be more elastic as a SMALL RISE in price of such commodity will increase the buyers to GO for its substitutes.
Discussion
4964.

Distinguish between complementary goods are substitude goods.

Answer»

Solution :(i) Substitue goods are those goods which can be used in place of one another to satisfy a particular WANT WHEREAS COMPLEMENTARY goods are those goods which are used together to satisfy a particular want.
(ii) Substitue goods have competitive DEMAND whereas complementary goods have joint demand.
(iii) Price of one SUBSTITUTE good has a positive relationship with qunatity demanded of another substitute good whereas price of one complementary good has a negative relationship with demand of another complementary good.
Discussion
4965.

The consumer is in equilibrium at a point where the budget line:

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Is above an INDIFFERENCE CURVE
Is below an indifference curve
Is TANGENT to an indifference curve ?
CUTS an indifference curve.

Answer :C
Discussion
4966.

In general,inflation is calculated by using: (i) wholesale price index(ii) consumer price index(iii) producers' price index

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ANSWER :(i)
Discussion
4967.

There are train and bus services between Chandigarh and New Delhi. If train fare between the two cities comes down, how will it affect the demand curve for bus travels?

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Solution :Train and bus SERVICES between the two cities are substitutes. If the train fare falls, then the demand for bus TRAVEL will DECREASE as there will be more demand for train services. The demand curve of bus services will shift to LEFT DD-`D_(2)D_(2)`.
Discussion
4968.

TR starts declining when MR is less than zero.

Answer»

Solution :True : When every ADDITIONAL unit generates negative revenue, i.e. when MR is negative or LESS than zero, TR starts DECLINING.
Discussion
4969.

When AC is rising MC is :

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EQUAL to AC
More than AC
Less than AC
Constant

Solution :N//A
Discussion
4970.

Explain briefly producer's equilibrium with the help of total revenue and total cost approach. Use diagram. ""Or Explain producer's equilibrium with the help of a diagram.

Answer»
Discussion
4971.

Calculate AP and MP from the following particulars : |{:("Land",1,1,1,1,1,1,1,1,1,1),("Labour",0,1,2,3,4,5,6,7,8,9),("TP (units)",0,20,50,90,120,140,150,150,140,120):}|

Answer»

SOLUTION :
Discussion
4972.

Explain the implication of freedom of entry and exit of firms under perfect competitive OR There are no barriers in the way of firms leaving or joining industry in a perfectly competitive market. Explain the significance of this feature

Answer»

SOLUTION :N/a
Discussion
4973.

When cofficient of correlation lies between +0.25 and +0.75 , it is called :

Answer»

PERFECT DEGREE of correlation
high degree of correlation
moderate degree of correlation
low degree of correlation

Solution :C
Discussion
4974.

The factor which causes movement along the demand curve is

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PRICE of the commodity
income of the consumer
price of other goods
tastes of the consumer

Answer :A
Discussion
4975.

The forms of market in imperfect competition are

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MONOPOLY
okigopoly
MONOPOLISTIC COMPETITION
all of these.

Answer :D
Discussion
4976.

Define Inferior Goods.

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SOLUTION :Inferior GOODS are the goods with INCOME EFFECT negative i.e as the income of the consumer increases the DEMAND for the good falls and vice-versa.
Discussion
4977.

Market for an essential item of consumption is in equilibrium, but the equilibrium price is too high for the common man. What can the government do to bring down if market price but only through the normal market forces? Explain the chain of effect of the government's action.

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Solution :The government can keep a price ceiling for the GOOD. Price ceiling refers to fixing the maximum price of a commodity that is LOWER than the equilibrium price. This fall in price will lead to an INCREASE in demand and a fall in supply. But this creates a SHORTAGE for the commodity LEADING to "black marketing".
Discussion
4978.

Average Product can have :

Answer»

POSITIVE VALUES only
NEGATIVE values only
Both positive as WELL as negative values
Neither positive nor negative values

Answer :A
Discussion
4979.

Price discrimination is associated with manopolistic competition.

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SOLUTION :It is ASSOCIATED with MONOPOLY.
Discussion
4980.

Which of the following causes decrease in demand not a normal goods ?

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FALL in income
unequal DISTRIBUTION of income
decrease in POPULATION size
all the above

Answer :D
Discussion
4981.

In a series, the number of times an item occurs is known as:

Answer»

number
class frequency
frequency
cumulative frequency

Answer :C
Discussion
4982.

What is the relationship between AR and MR when price falls with rise in output ?

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SOLUTION :AR and MR curves slope downwards from left to RIGHT , but MR falls at a rate which is twice the rate of FALL in AR.
Discussion
4983.

Different points on an indifference curve represent different satisfaction levels

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Solution :All POINTS on the INDIFFERENCE CURVE provide same LEVEL of satisfaction.
Discussion
4984.

Total fixed costis more than total variable cost at zero levelof output.

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SOLUTION :True. Because TOTAL fixed COST EXISTS even at zero levelof OUTPUT, whereas, total variable cost is zero at zero output.
Discussion
4985.

Which of the following is an example of a Positive Economy:

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India should take steps to CONTROL rising prices
There are INEQUALITIES of income in our economy
India should not be an OVERPOPULATED country
Income inequalities should be REDUCED

Solution :B
Discussion
4986.

In what circumstances may the production possibility frontier shift away from the origin ? Explain OR Explain the central problem of ''What is produced and in what quantities''

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Solution :Two factors that may shift the Production Possibility Frontier of an economy away from origin (to the RIGHT ) are: ltBrgt (a) Increase in resources available to an economy (natural, physical or human resource). New resources may increase the output potential in an economy resulting in shift of PPF away from origin.
(b) IMPROVEMENT in Technology: When technology improves, the production potential increases, i.e., economy may be ABLE to produce more output using existing resouces efficiently.
OR
This problem involves selection of goods adn services to be produced and the quantity to be produced of each selected commodity.
The problem has two aspects:
(i) What possible commodities to produce, i.e., which consumer goods and which of the capital goods are to be produced. In the same way, economy has to make a CHOICE between civil and war goods.
(ii) After deciding the goods to be produced, economy has to DECIDED the quantity of each commodity, that is selected.
Discussion
4987.

Explain the relation between MR and AR when a firm is able to sell more quantity of output. (i) at the same price(ii) Only by lowering the price.

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Solution :(i) MR = AR when the firm is able to sell more quantity at the given price. Both the curves are horizontal lines parallel to the X-axix and co-incide ONE another.
(II) Both the curves will slope downwards and the MR curve will be more steeper than the AR curve or the MR curve will lie below the AR curve.
Discussion
4988.

A firm has monopoly control over a market. It exercised a policy of selling its product at a price decided by it. However at the end of the year, it observed that its sales had been low compared to what it had planned. What is the reason behind low performance of the firm ?

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Solution :The firm may not have reduced the price to sell more . It must have been selling at a higher price which has caused low sales. Every PRODUCER, EVEN a MONOPOLIST faces a negatively sloped demand curve implying INVERSE relation between price and demand of the commodity. it should give price reduction to create more demand in the MARKET to increses its sales.
Discussion
4989.

What is meant by census method ? What are its uses ?

Answer»

Solution :The Census Method is also called as a Complete Enumeration Survey Method WHEREIN each and every item in the universe is selected for the data COLLECTION. ... Whenever the entire population is studied to collect the detailed data about every unit, then the census method is applied.Uses of census method-1. Use for RESEARCH purposes: Population and HOUSING census data provide a rich source of information for carrying out demographic, social and economic surveys. 2. Use for economic purposes: Economic decision-making relies on SCIENTIFIC facts and the Census provides facts and actual data.
Discussion
4990.

State one principallimitationof index numbers.

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Solution :ONE principallimitation of index number is that owing to difference in the unit of currency as well as difference in the composition of PRODUCTION(and consumption )across different countries of the world, it is often very DIFFICULT to construct Index NUMBERS that FACILITATE internationalcomparisons.
Discussion
4991.

Classify the following between fixed cost or variable cost: Rent, raw material charges, interest, depreciation, wages of temporary workers, salaries of permanent employees, transporation charges, license fees, minimum telephone bill, telephone bill over and above minimum bill.

Answer»

SOLUTION :
Discussion
4992.

Explain producer's equilibrium with the halp of a diagram.

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SOLUTION :N/a
Discussion
4993.

Discuss the percentage method for calculating price elasticity of demand

Answer»
Discussion
4994.

The following table gives data on birth rate in India according to census survey of different years. Present the information the form of a vertical/simple bar diagram.

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SOLUTION :
Discussion
4995.

Using supply and demand curves, show how an increase in the price of shoes affects the price of a pair of socks and the number of-pairs of socks bought and sold.

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Solution :An increase in the price of shoes (complementary good) will DECREASE the demand for socks (given commodity) as it becomes relatively expensive to consume the two commodities (socks and shoes) TOGETHER. It will lead to excess supply. This leads to competition AMONG sellers, which reduces the price. Fall in price leads to decrease in supply and rise in demand. These CHANGES continue till supply and demand become equal at a new equilibrium price. As there is a decrease in demand only, both equilibrium price and equilibrium QUANTITY will fall.
Discussion
4996.

'TU remains the same, whether MU is positive or negative''. Defend or refute.

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SOLUTION :The GIVEN statement is REFUTED. TU increase, when MU is positive, whereas, TU decrease, when MU is negative.
Discussion
4997.

What is meant by MU of one rupee ?

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Solution :MU of one RUPEE refers to the utility OBTAINED from PURCHASE of COMMODITIES with one rupee.
Discussion
4998.

Both average product and marginal product can be negative.

Answer»

Solution :FALSE. Marginal PRODUCT (MP) can be negative but not average product (AP). MP is negative when TP falls with increase in variable INPUT. However, AP cannot be negative as TP is always positive and NEVER negative.
Discussion
4999.

A person's MU schedule is given below. Derive TU: {:("Units consumed",1,2,3,4,5,6,),(MU,14,10,8,6,0,-2,):}

Answer»

SOLUTION :TU: 14,24,32,38,38,36
Discussion
5000.

The demand curve for a fim under oligopoly is indeterminate.

Answer»

SOLUTION :The demand CURVE is indeterminate because EXACT BEHAVIOUR pattern of a firm cannot be determined with certainty due to high degree of INTERDEPENDENCE between different firms.
Discussion