7498 + Interview Questions in Economics in Class 11 Page 103 InterviewSolution

5101.	You know share market is going bullish during the last several months. Collect weekly data on the share price of any two important industries during the past six months. Calculate the range of share prices. Comment on how volatile are the share prices.
Answer»

Discussion

5102.	Macroeconomics is study of:
Answer» (a) Consumption behaviour of all members of a family. (B) Sum of all consumers of a GOOD. (C) Sum of all consumers of all goods. (d) All the above ANSWER :c

Discussion

5103.	Why is the demand curve under monopolistic competition more elastic as compamredto the demand curve under monopoly
Answer» SOLUTION :N/a

Discussion

5104.	Dfine cost
Answer» Solution :Cost in Economics is the sum of actual money EXPENDITURE on inputs and ESTIMATED value of inputs provided by the owners including NORMAL PROFITS.

Discussion

5105.	Explain 'what to produce' with the help of an example OR Explain the central problem of the choice of products to be produced.
Answer» Solution :As there is the problem of CHOICE, the economy has to DECIDE which goods and SERVICES are to be produced. For example, which of the CONSUMER goods such as WHEAT, rice, cloth are to be produced and which of the capital goods such as machines and tools are to be produced.When an economy has taken a decision as to what goods or services to be produced, then it has to be about its quantity. How much of consumer goods and capital goods are to be produced.For example, if an economy decides to produce rice and wheat within a given period with limited resources then it will have to use less of machineries.

Discussion

5106.	Total utility is ______
Answer» the SUM of MARGINAL utilities utility from FIRST unit `XX` number of units consumed always increasing utility from last unit `xx` number of units consumed Answer :A

Discussion

5107.	Distinguish between cooperative and non-cooperative oligopoly
Answer» Solution :If the FIRMS COOPERATE with each other in determining price or OUTPUT or both, it is called collusive oligopoly or cooperative oligopoly.If firms in an oligopoly MARKET COMPETE with each other, it iscalled a non-collusive or non-cooperative oligopoly.

Discussion

5108.	What is the reaction of AP, when, (i) MP is more than AP, (ii) MP is less than AP, (iii) MP is equal to AP ?
Answer» Solution :The REACTION of AP in different cases will be : (i) AP will rise. (ii) AP will fall but it will REMAIN positive. (iii) AP will be CONSTANT and at its MAXIMUM point.

Discussion

5109.	What is a frequency curve?
Answer» Solution :A frequency CURVE is a curve which is PLOTTED by joining the mid-points of all TOPS of a histogram by FREEHAND smoothed curves and not by straight lines.

Discussion

5110.	A Triple Bar Chart is:-
Answer» One dimensional TWO dimensional THREE dimensional All the above. Solution :C

Discussion

5111.	Explain the effect of increase in income of the consumer on demand for a good.
Answer» Solution :If the commodity is a normal good, then an INCREASE in the income of the consumer leads to an increase in DEMAND for the commodity or the demand curve SHIFTS rightward. On the other hand if the commodity is an INFERIOR good, then an increase in income of the consumer leads to a decrease in demand of the commodity or the demand curve shifts LEFTWARD.

Discussion

5112.	Give one example each of fixed cost and variable cost?
Answer» SOLUTION :RENT is FIXED cost and wages are variable cost

Discussion

5113.	What happens to the demand of a good when consumer's income changes? Explain.
Answer» Solution :There is a positive relationship between INCOME of a CONSUMER and demand for a commodity if the GOOD is a normal good whereas there is a NEGATIVE relationship between income of the consumer and demand of a commodity if the good is an inferior good. So, with an increase in income of the consumer the demand of a normal good rises and vice-versa and with increase in income of the consumer the demand for an inferior good falls and vice-versa.

Discussion

5114.	What does concavity of PPC indicate?
Answer» SOLUTION :Concavity of PPC MEANS that for every additional unit of one good produced, more and more UNITS of ANOTHER good is to be sacrificed.

Discussion

5115.	"Production function establishes a technical relation between inputs and output, and not economic relation". Comment.
Answer» Solution :The GIVEN statement is correct. Production function establishes only a TECHNICAL between inputs and OUTPUT. It is not economical in nature as we do not consider the value of inputs ad output.

Discussion

5116.	If a consumer has monotonic preferences, then bundle (10,8) and (8,6)?
Answer» Solution :No, if a consumer has MONOTONIC PREFERENCES, then bundle (10,8) should be preferred instead of bundle (8,6) as bundle (10,8) has more of both GOODS.

Discussion

5117.	Equilbrium price in perfect competition is determined by :
Answer» ONE GROUP of firms One INDIVIDUAL firm All the firms none of these Answer :C

Discussion

5118.	An indifferences curve slopes downwards from left to right because
Answer» MARGINAL rate of substitution is declining CONSUMER MUST GIVE up some units of one good to obtain more units of the other good. Both (a) and (b) NONE of the above Answer :B

Discussion

5119.	Identify the market form which has indeterminate demand curve:
Answer» Monopoly Monopolist Competition Perfect COMPITION Oligopoly Solution :N/a

Discussion

5120.	Marginal rate of substitution indicates the slope of budget line.
Answer» SOLUTION :PRICE ratio measure the slope of budget line.

Discussion

5121.	What is meant by marginal opportunity cost? Why is marrignal oppoutunity cost increasing in case of PPF?
Answer» Solution :Marginal opportunity cost is an economic term that analyzes the EFFECT of producing additional units of a product on the COSTS of a business, as well as the opportunities the companies give up to produce more of a product.The law of increasing opportunity cost is the concept that as you continue to increase production of ONE GOOD, the opportunity cost of producing that NEXT unit increases. This comes about as you reallocate resources to produce one good that was better suited to produce the original good.

Discussion

5122.	Which of the following is not economics cost:
Answer» PAYMENT of FACTORY rent Purchase of machine NORMAL profit Payment of interest Answer :C

Discussion

5123.	A firm is able to sell any quantity of a good at a given price. The firm's marginal revenue will be :
Answer» GREATER than Average REVENUE Less than Average Revenue Equal to Average Revenue ZERO Solution :N/A

Discussion

5124.	Marginal utility of a good means utility on consuming :
Answer» More UNITS LESS units ONE more unit All the above ANSWER :C

Discussion

5125.	Why are the firms said the be interdependent in an oligopoly market ? Explain
Answer»

Discussion

5126.	_________ method is adopted when deviations from the assumed mean have some common factor. (Short-cut/Step-deviation)
Answer» ANSWER :Step-deviation

Discussion

5127.	In India, the wholesale price index numbers are constructed on _________ basis . "" (weekly/monthly)
Answer» ANSWER :WEEKLY

Discussion

5128.	A country produces two goods, A and B its production possibilities are shown in the following table. Calculate the values of MRT. Construct of PPF, with the help given possibilities and discuss the shape of PPF. {:("Possibilities",A,B,C,D,E,F),("Good A",0,1,2,3,4,5),("Good B",100,95,85,70,50,25):}
Answer» Answer :(MRT;-;5;1 10;1 15;1 20;1 25;1 and PPF will be concave shaped)

Discussion

5129.	Answer the following questions with the help of following diagram: Which of the following point shows unattainable combination?
Answer» C F G A Solution :C. Unattainable combination is the combination of TWO goods which is not POSSIBLE to be produced with allocated resource and available technology. Points on the right on OUTSIDE the CURVE represents the unattainable combination of goods.

Discussion

5130.	Which of these is not an assumption of PPC?
Answer» RESOURCES are FULLY and EFFICIENTLY utilised Resources in the economy are fixed There is no change in level of technology Resources are equally efficient in production of all products Solution :D. The FOUR key assumptions underlying production possibilities analysis are: (1) resources are used to produce one or both of only two goods, (2) the quantities of the resources do not change, (3) technology and production techniques do not change, and (4) resources are used in a technically efficient way.

Discussion

5131.	Imposition of price ceiling ______ the equilibrium price leads to ______ demand.
Answer» SOLUTION :N/a

Discussion

5132.	Average revenue can become negative when price falls with rise in output.
Answer» SOLUTION :FALSE : Average revenue cannot be NEGATIVE as total revenue can never be negative.

Discussion

5133.	The price which is fixed at a level lower than the equilibrium price
Answer» PRICE CEILING (MAXIMUM) price floor fixed price all of these Solution :N/a

Discussion

5134.	Why is production possibilities curve concave ? Explain.
Answer» Solution :A typical downwards sloping PP curve is concave, i.e, its SLOPE is increasing as we move from left to right. It also means that MARGINAL rate of transformation (MRT) increases as we move downwards along the curve. The curve is based on the assumption that no resource is equally efficient in production of all goods. MRT increases because in order to produce more and more units of one goods each TIME the quantity of the other GOOD is sacrificed at an increasing rate.

Discussion

5135.	Explain the reasons for : (i)Increasing returns to a factor(ii) Diminishing returns to a factor.
Answer» Solution :(i)(i) BETTER utilisation of FIXED FACTOR. (II) Effecient utilisation of variable factor. (iii) Better co-ordination between FACTORS. (ii) (i) Over-utilisation of the fixed factor. (ii) Imperfect Substitution of factors. (iii) Poor Coordination.

Discussion

5136.	When MP is zero, what can you say about TP ?
Answer» SOLUTION :TP is MAXIMUM or CONSTANT.

Discussion

5137.	What are the features of oligopoly ?
Answer» Solution :The features of oligopoly are Few FIRMS INTERDEPENDENCE among firms Price RIGIDITY Very SIGNIFICANT selling COSTS Barriers to entry of firms Neture of the product-may be homogenous of differentiated Indeterminate demand curve.

Discussion

5138.	In which market from are the average and marginal revenue of a fiem always equal ?
Answer»

Discussion

5139.	(i) What does the total area under a frequency curve represents? (ii) What does the area, under a frequency curve, to the left of the ordinate at X=alpha represent, where alpha is some value of X within the total range?
Answer»

Discussion

5140.	Explain the effects of a price ceiling Or Explain the effects of a price floor.
Answer» Solution :Price CEILING means fixing price below the equilibrium price. It is the maximum price that sellers can legally charge for a GOOD or service As price is lowered, it will cause excess demand for the good. SINCE there is shortage of goods, the sellers may TEND to hoard the goods. It implies the following : (i) Rationing (ii) Existence of black markets Or Price floor is the minimum price fixed by the government which the sellers can legally charge for the good or service. The price is normally set at a LEVEL higher than the market-determined (equilibrium) price. Since this price is above the equilibrium price, it will cause excess supply in the market. Since there is surplus, sellers may tend to cut prices. It implies the following : (i) Government buys the unsold stock (ii) Illegal selling.

Discussion

5141.	What is meant by Price Floor?
Answer» SOLUTION :Price Floor refers to the MINIMUM price (above the EQUILIBRIUM price), fixed by the GOVERNMENT, which the producers must be paid for their PRODUCE.

Discussion

5142.	Give two examples of macroeconomics.
Answer» SOLUTION :1. NATIONAL income2. AGGREGATE demand and Aggregate SUPPLY

Discussion

5143.	Total revenue curve is a positively sloped straight line when price remains same at all levels of output.
Answer» SOLUTION :True : It happens because in case of constant prices, total REVENUE increases at a constant RATE.

Discussion

5144.	Under diminishing returns to a factor, total product continue to increase till marginal product reaches zero.
Answer» Solution :TRUE. Under DIMINISHING returns MP falls. TP increases till MP is POSITIVE.

Discussion

5145.	Average product can rise even when marginal product starts declining.
Answer» SOLUTION :True. It can HAPPEN as LONG as FALLING marginal product is more than average product.

Discussion

5146.	Illustrate the meaning of the term dispersion with examples.
Answer» Solution :In STATISTICS, dispersion is the extent to which a DISTRIBUTION is STRETCHED or squeezed. Common examples of MEASURES of statistical dispersion are the variance, STANDARD deviation, and interquartile range.

Discussion

5147.	According to law of DMU, marginal utility derived from each additional unit of a commodity falls. However level of satisfaction may not necessarily fall with increase in consumption of successive units of commodity, Explain with reference to a practical application.
Answer» ANSWER :N/a

Discussion

5148.	What is maximum price ceiling? Explain its implications.
Answer» Solution :Price ceiling refers to fixing the maximum price of a COMMODITY that is LOWER than the equilibrium price. As a result of price ceiling, the market price falls below the equilibrium price leading to EXCESS demand. The direct implication of price ceiling is BLACK MARKETING where the products are sold at a higher price than the maximum price set by the government.

Discussion

5149.	The law of diminishing marginal utility states that a rise in price of a product results in decline in its marginal utility
Answer» Solution :The LAW STATES that as we consume more and more UNITS of a COMMODITY, there is decline in marginal utility from it.

Discussion

5150.	Changein thepirce ofthegiven commoditywill lead to :
Answer» Expansionis Supply conrtaction in supply either (a) or (b) Neither (a) and (b) Solution : Increase in PRICE will lead to increase in the supply and hence expansion in supply , and DECREASE in price will lead to FALL in supply and hence contraction in supply.our correct ANSWER is OPTION is (c).

Discussion

Explore topic-wise InterviewSolutions in .

You know share market is going bullish during the last several months. Collect weekly data on the share price of any two important industries during the past six months. Calculate the range of share prices. Comment on how volatile are the share prices.

Macroeconomics is study of:

Why is the demand curve under monopolistic competition more elastic as compamredto the demand curve under monopoly

Dfine cost

Explain 'what to produce' with the help of an example OR Explain the central problem of the choice of products to be produced.

Total utility is ______

Distinguish between cooperative and non-cooperative oligopoly

What is the reaction of AP, when, (i) MP is more than AP, (ii) MP is less than AP, (iii) MP is equal to AP ?

What is a frequency curve?

A Triple Bar Chart is:-

Explain the effect of increase in income of the consumer on demand for a good.

Give one example each of fixed cost and variable cost?

What happens to the demand of a good when consumer's income changes? Explain.

What does concavity of PPC indicate?

"Production function establishes a technical relation between inputs and output, and not economic relation". Comment.

If a consumer has monotonic preferences, then bundle (10,8) and (8,6)?

Equilbrium price in perfect competition is determined by :

An indifferences curve slopes downwards from left to right because

Identify the market form which has indeterminate demand curve:

Marginal rate of substitution indicates the slope of budget line.

What is meant by marginal opportunity cost? Why is marrignal oppoutunity cost increasing in case of PPF?

Which of the following is not economics cost:

A firm is able to sell any quantity of a good at a given price. The firm's marginal revenue will be :

Marginal utility of a good means utility on consuming :

Why are the firms said the be interdependent in an oligopoly market ? Explain

_________ method is adopted when deviations from the assumed mean have some common factor. (Short-cut/Step-deviation)

In India, the wholesale price index numbers are constructed on _________ basis . "" (weekly/monthly)

A country produces two goods, A and B its production possibilities are shown in the following table. Calculate the values of MRT. Construct of PPF, with the help given possibilities and discuss the shape of PPF. {:("Possibilities",A,B,C,D,E,F),("Good A",0,1,2,3,4,5),("Good B",100,95,85,70,50,25):}

Answer the following questions with the help of following diagram: Which of the following point shows unattainable combination?

Which of these is not an assumption of PPC?

Imposition of price ceiling ______ the equilibrium price leads to ______ demand.

Average revenue can become negative when price falls with rise in output.

The price which is fixed at a level lower than the equilibrium price

Why is production possibilities curve concave ? Explain.

Explain the reasons for : (i)Increasing returns to a factor(ii) Diminishing returns to a factor.

When MP is zero, what can you say about TP ?

What are the features of oligopoly ?

In which market from are the average and marginal revenue of a fiem always equal ?

(i) What does the total area under a frequency curve represents? (ii) What does the area, under a frequency curve, to the left of the ordinate at X=alpha represent, where alpha is some value of X within the total range?

Explain the effects of a price ceiling Or Explain the effects of a price floor.

What is meant by Price Floor?

Give two examples of macroeconomics.

Total revenue curve is a positively sloped straight line when price remains same at all levels of output.

Under diminishing returns to a factor, total product continue to increase till marginal product reaches zero.

Average product can rise even when marginal product starts declining.

Illustrate the meaning of the term dispersion with examples.

According to law of DMU, marginal utility derived from each additional unit of a commodity falls. However level of satisfaction may not necessarily fall with increase in consumption of successive units of commodity, Explain with reference to a practical application.

What is maximum price ceiling? Explain its implications.

The law of diminishing marginal utility states that a rise in price of a product results in decline in its marginal utility

Changein thepirce ofthegiven commoditywill lead to :

Imposition of price ceiling the equilibrium price leads to demand.