7498 + Interview Questions in Economics in Class 11 Page 112 InterviewSolution

5551.	If MC is more than MR at a particular level of output, then how will a producer react to maximize the profits ?
Answer» SOLUTION :Producer will decrease the production to MAXIMISE the PROFITS. Reduction in the production will be done till he reaches the equilibrium when MR = MC.

Discussion

5552.	A except one of the following are assumed to remain same while drawing an individual's demand curve for a product. Which one is it ?
Answer» TASTES and PREFERENCES of the individual Monetary income Price of the GIVEN product Price of RELATED goods Answer :C

Discussion

5553.	Calculate rank correlation coefficient from the data in Example 2 in Section 11.4
Answer» Solution : `rho=1-(6[SigmaD^(2)-(1)/(12)(m^(3)-m)-(1)/(12)(m^(3)-m)...])/(N(N^(2)-1))` `=1-(6[19.5+(1)/(12)+(2^(3)-2)])/(7(7^(2)-1))` `=1-(6[19.5+(1)/(12)(6)])/(7xx48)=1-(6(19.5+0.5))/(336)` `=1-(6xx20)/(336)=1-(120)/(336)=1-0.36=0.64`

Discussion

5554.	Define microeconomics.
Answer» Solution :Microeconomis is that part of the economic THEORY which DEALS with INDIVIDUAL units of an ECONOMY.

Discussion

5555.	Suppose there are three bundles containing good 1 and good 2: Bundles (10,10), Bundle (10,9) and Bundle (7,10), Which bundle will be preferred by the consumer, if he has monotonic preferences ?
Answer» SOLUTION :BUNDLE (10,10)

Discussion

5556.	Which of the following countries will face the central problems:
Answer» India China America all the above Solution :all of the above

Discussion

5557.	Define systematic sampling.
Answer» SOLUTION :In systematic sampling, UNITS of the population are numerically, GEOGRAPHICALLY and alphabetically arranged . EVERY nth item of the NUMBERED is selected as a sample item.

Discussion

5558.	"TU remains same always irrespective of change in MY". Defense refute
Answer» Solution :This statement is refuted as: TU INCREASES when MU is positive TU is MAXIMUM and constant when Mu is ZERO and TU decreases when MU is NEGATIVE

Discussion

5559.	Economics is the study of:
Answer» How SOCIETY manages its UNLIMITED RESOURCES How to reduce our WANTS until we are satisfied How society manages its scarce resources How to fully SATISFY our limited wants Solution :C. How society manages its scarce resources

Discussion

5560.	Which one of these is not an example of substitude goods ?
Answer» TEA and Coffee Coke and Pepsi Ink PEN and BALL pen Bread and Butter Answer :D

Discussion

5561.	A consumer in consumption of single commodity equates price of the commodity with total utility.
Answer» Solution :A consumer compares price (additional COST) with additional benefit (MARGINAL UTILITY) and not with Totally Utility (TU). TU is the total satisfactions obtained from consumption of all the UNITS of a commodity. As price is always related to ONE unit, it cannot be equated with TU.

Discussion

5562.	What will be the effect on PPC of Bihar if better job opportunities are created in Bihar?
Answer» SOLUTION :Due to creation of "BETTER job OPPORTUNITIES", economy will start MOVING forward towares PPC.

Discussion

5563.	The sum of squared deviations of the items from arithmetic mean is _________ . (minimum/maximum)
Answer» ANSWER :MINIMUM

Discussion

5564.	Explain the implication of the following (i) Freedom of entry to firms under perfect compeition., (ii) Interdependence between firms under oligopoly
Answer» Solution :a)Implication of ' freedom of entry and exit' : 'Freedom of entry' signifies that there are no BARRIERS to the entry of new firms into industry. When the existing firms are earning abnormal profits, the new firms, attracted by the prospects of profit, enter the industry. This raises market supply, which in turn, leads to fall in market price and consequently profits. Te entry CONTINUES till each firm is earning just te normal profits. 'Freedom to exit' signifies that there are no barriers which restrict the existing firms from leaving the industry. The firms try to leave when they are facing losses. As the firms start leaving, market supply falls, leading to rise in market price and consequently reduction in losses. The firms continue to leave till the losses are WIPED out and each existing firm is earning just the normal profits.b)) Interdependence between firms under oligopoly :Firms under oligopoly are interdependent. Interdependence MEANS that actions of one firm affect the actions of other firms. A firm considers the action and reaction of the rival firms while determining its price and output levels. A change in output or price by one firm evokes reaction from other firms OPERATING in the market. For example: market for cars in India is dominated by few firms( Maruti, Tata, Hyundai, Ford, Honda,etc.). A change by one firm (say, Tata) in any of its vehicle( say, Indica) will induce other firms( say, Maruti, Hyundai,etc) to make changes in their respective vehicles.

Discussion

5565.	The correct sequence for demand curves of Monopolistic Competition, Monopoly Perfect Competition and Oligopoly is: (iv) Inderterminate Demand Curve
Answer» iv,ii,I,iii ii,I,iii and iv I,iii,ii and iv iii,iv,I and ii Solution :N/a

Discussion

5566.	What are the main element of sampling ?
Answer» Solution :1. A sample is the representative of all the CHARACTERS of universe.2. All units of sample MUST be independent of each other.3. The number of item in the sample should be FAIRLY adequate.

Discussion

5567.	In which market form, are average and marginal revenue of a firm always equal? Or In which market form, demand curve of a firm is perfectly elastic? Or Under which market form, firm is a price taker?
Answer» SOLUTION :PERFECT COMPETITION

Discussion

5568.	Under diminishing returns to a factor, marginal product and total product both increase at a diminishing rate.
Answer» Solution :False. ALTHOUGH TP INCREASES at a DIMINISHING rate, but MP falls under diminishing returns to a FACTOR.

Discussion

5569.	Equilibrium price is perfectly comepetitive market is determined by :
Answer» Each individual FIRM for its own products Few BIG FIRMS A group of firms All the firms taken together Answer :D

Discussion

5570.	An oligopoly firm faces a downward sloping demand curve.
Answer» SOLUTION :The demand curve under OLIGOPOLY is indeterminate as EXACT behavior pattern of a firm cannot be DETERMINED with certainty.

Discussion

5571.	What is equilibrium quantity ?
Answer» SOLUTION :It refers to the QUANTITY at which the quantity DEMANDED of a commodity is EQUAL to the quantity SUPPLIED.

Discussion

5572.	What are the conditions of producer's equilibrium under perfect competition and monopoly ?
Answer» Solution :In perfect competition, the marginal revenue and average revenue of a producer coincide and are equal to market price i.e., AR = MR = Price. A competitive producer's equilibrium is ESTABLISHED at a point, where (i) Price/MR = MC (ii) MC is rising after equilibrium In a situation of equilibrium, a producer may be earning maximum profit, or PRODUCING at break EVEN or shut down point. A competitive producer always chooses that LEVEL of output which lies on the rising portion of the MC curve. He will never produce on the decreasing portion of the MC curve. (MC curve gives the supply curve of the firm.) Under monopoly, conditions of producer's equilibrium are MR = MC and MC gt MR after equilbrium.

Discussion

5573.	Explain the concept of linear demand function and calculate its slope.
Answer» <P> Solution :The linear demand function MAY be written in the form: `Q_(d) = a-bp` Where `Q_(d)`=Quantity demanded of a commodity, a = Value of X (Quantity demanded) when Y (price) is ZERO. b `=(DeltaQ)/(DeltaP)` i.e., CHANGE in quantity demanded for a unit change in price. P = own price of the commodity Calculate of slope of demand curve Linear dd curve implies a constant slope `Q_(d) = a-bp` `bp = a-Q_(d)`or`P=(a)/(b)-(1)/(b)Q_(d)` where `(-)(1)/(b)` is the slope of dd curve. Since `b=(DeltaQ)/(DeltaP)`, slope `(-)(1)/(b)` will be: `(-)(1)/((DeltaQ)/(DeltaP))"or"P=(a)/(b)-(1)/(b)Q_(d)` `-(DeltaP)/(DeltaQ)`=Slope of dd curve `=("Change in the variable measured on vertical axis")/("Change in the variable measured on horizontal axis")` For example : The demand function of a good is `Q_(d) = 20-4P`. Calculate its slope `Q_(d)=20-4P` or 4P = 20- Q `P=(20)/(4)-(1)/(4)Q` slope `=(-)(1)/(4)` or b = -4 (given) Slope of dd curve is `(1)/(b)`. Hence slope is `(-)(1)/(4)`.

Discussion

5574.	Among the following demand curves, which one is more elastic ?
Answer» F E G H Solution :N/a

Discussion

5575.	Explain the meaning of change in quantity demanded. How does it affect demand curve?
Answer» SOLUTION :CHANGE in QUANTITY demanded refers to change in the demand of a commodity owing to change in own PRICE of the commodity. It leads to a shift in the demand curve.

Discussion

5576.	What is the law of diminishing marginal product ?
Answer» Solution :It states that INITIALLY as INPUTS are EMPLOYED MP increases. After a point of time, MP remains positive but STARTS FALLING. Then there comes a phase where MP becomes negative as more inputs are employed.

Discussion

5577.	Simple Random Sampling is:
Answer» STRATIFIED SAMPLING CLUSTER sampling SYSTEMATIC sampling Unrestristed sampling SOLUTION :D

Discussion

5578.	How is TPP derived from MPP schedule ?
Answer» ANSWER :TPP is derived by summing up of MPPs. TPP=`Sigma`MPP.

Discussion

5579.	What is average variable cost?
Answer» Solution :It REFERS to PER UNIT variable cost of PRODUCTION

Discussion

5580.	Explain the meaning and implications of maximum price ceiling and minimum price ceiling.
Answer» Solution :When the GOVERNMENT imposes upper limit on the price of a good it is called maximum price ceiling. It is FIXED below the equilibrium price. Implication: It will lead to excess demand. This in turn may lead to black marketing of goods. When the government imposes lower limit on the price of a good,it is called minimum price ceiling. Implication: It leads to excess supply. This in TUM may lead to illegal selling below the ceiling price as the producers are not able to sell what they DESIRE to sell.

Discussion

5581.	What is meant by the problem of "For whom to produce"?
Answer» SOLUTION :This problem relates to the distribution of PRODUCED goods and services AMONG the individuals within the ECONOMY.

Discussion

5582.	(i) There is a certain bias involved in the non-random selection of samples (true/false).
Answer» ANSWER :TRUE

Discussion

5583.	Discuss how you would use the lottery method to select 3 studentout of 10 in your class.
Answer» Solution :A representative (random) SAMPLE of 3 students can be taken out of 10 through lotterymethod. The names of all the 10 students of the class are WRITTEN on 10 separate pieces of paper of equal size and all the slips are FOLDED in a similar manner. These slips are then mixed WELL and 3 slips with these names are selected one by one, so that all the students have equal chance of being selected in the sample.

Discussion

5584.	What is meant by profit ?
Answer» SOLUTION :PROFIT REFERS to the EXCESS of revenue over cost.

Discussion

5585.	Expressing choices in terms of first preference, second preference, third preference and so on is expression in termsof :
Answer» Diminishingmarginal UTILITY Cardinal utility MONOTONIC PREFERENCE ORDINAL utility ANSWER :D

Discussion

5586.	The price elasticity of supply of a commodity Y is half the price elasticity of supply of commodity X. 16 percent rise in price of X results in 40 percent rise in its supply. If the price of Y falls by 8 percent, calculate the percentage fall in its supply.
Answer» SOLUTION :`E_(s) ` of X `=(40)/(16)=2.5` `THEREFORE ""E_(s)` of Y =`2.5 DIV 2=1.25` `E_(s)` of Y `=(%"change in supply")/(% "change in PRICE")` `1.25=(%"change in supply")/(8)` % change in supply `=8xx1.25=10` percent

Discussion

5587.	The minimum point of average cost curve lies of the right of average variable cost curve.
Answer» SOLUTION :True. It happens because average COST CONTINUES to fall due to DECREASING average fixed cost even afteraverage VARIABLE cost starts rising.

Discussion

5588.	In case of good A 100 units sold at a price of Rs. 10 per unit. In case of good B only 10 units are sold at a price of Rs. 120 per unit. The weighted mean of the prices of the two goods is :
Answer» RS 65 Rs. 20 Rs. 17 Rs. 16 Solution :B

Discussion

5589.	Distinguish between microeconomics and macroeconomics.
Answer» SOLUTION :Microeconomics studies individuals and business DECISIONS, while macroeconomics analyzes the decisions made by countries and governments.Microeconomics focuses on supply and demand, and other forces that determine price LEVELS, making it a bottom-up approach.Macroeconomics takes a top-down approach and looks at the economy as a whole, trying to determine what the economy should look like.Investors can USE microeconomics in their investment decisions, while macroeconomics is an analytical tool MAINLY used to craft economic and fiscal policy.

Discussion

5590.	In monopolistic competion
Answer» MR `LT` AR MR`GT`AR MR=AR none of these Answer :A

Discussion

5591.	A person's MU schedule is given below. Derive TU : {:("Units consumed",1,2,3,4,5,6,),(MU,9,6,4,2,0,-2,):}
Answer» SOLUTION :

Discussion

5592.	In case of _____ ogive, the cumulative total tends to increase. (less than / more than)
Answer» SOLUTION :LESS than

Discussion

5593.	When price falls with rise in output, TR is _______ when MR is zero.
Answer» MAXIMUM MINIMUM ZERO NONE of these SOLUTION :N/A

Discussion

5594.	How does the availability of close subtitutes is more elastic of demand for a product ?
Answer» SOLUTION :A commodity with large NUMBER of close substitutes is more elastic as COMPARED to a commodity with less number of close substitutes.

Discussion

5595.	Explain the implications of "large number of buyers" under perfect competition.
Answer» Solution :Large number of BUYERS IMPLIES that number of buyers is large enough so that each individuals buyer has a NEGLIGIBLE share in market demand for the GOOD. The implication is that no individual demand.

Discussion

5596.	Explain the reasons for: (i) Increasing Returns to a Factor (ii) Diminishing Returns to a Factor (iii) Negative Returns to a Factor
Answer»

Discussion

5597.	What changes will take place in TU, when (i) MU curve remains above the X-axis, (ii) MU curve touches the X-axis, (iii) MU curve lies below the X-axis.
Answer» Solution :(i) TU will increase, but a diminishing rate, (ii) TU will be maximum, (III) TU STARTS to FALL.

Discussion

5598.	State three features of monopoly.
Answer»

Discussion

5599.	Calculate the arithmetic mean of the following frequency distribution by Direct Method: {:("Class Interval",10-20,20-40,40-70,70-120,120-200),("Frequency"," "4," "10," "26," "8," "2):}
Answer» ANSWER :ARITHMETIC MEAN = 57.4

Discussion

5600.	Both variable and fixed factors exist in case of zero output.
Answer» Solution :False. FIXED factors MAY exist at zero level of OUTPUT, but not the VARIABLE factors.

Discussion

Explore topic-wise InterviewSolutions in .

If MC is more than MR at a particular level of output, then how will a producer react to maximize the profits ?

A except one of the following are assumed to remain same while drawing an individual's demand curve for a product. Which one is it ?

Calculate rank correlation coefficient from the data in Example 2 in Section 11.4

Define microeconomics.

Suppose there are three bundles containing good 1 and good 2: Bundles (10,10), Bundle (10,9) and Bundle (7,10), Which bundle will be preferred by the consumer, if he has monotonic preferences ?

Which of the following countries will face the central problems:

Define systematic sampling.

"TU remains same always irrespective of change in MY". Defense refute

Economics is the study of:

Which one of these is not an example of substitude goods ?

A consumer in consumption of single commodity equates price of the commodity with total utility.

What will be the effect on PPC of Bihar if better job opportunities are created in Bihar?

The sum of squared deviations of the items from arithmetic mean is _________ . (minimum/maximum)

Explain the implication of the following (i) Freedom of entry to firms under perfect compeition., (ii) Interdependence between firms under oligopoly

The correct sequence for demand curves of Monopolistic Competition, Monopoly Perfect Competition and Oligopoly is: (iv) Inderterminate Demand Curve

What are the main element of sampling ?

In which market form, are average and marginal revenue of a firm always equal? Or In which market form, demand curve of a firm is perfectly elastic? Or Under which market form, firm is a price taker?

Under diminishing returns to a factor, marginal product and total product both increase at a diminishing rate.

Equilibrium price is perfectly comepetitive market is determined by :

An oligopoly firm faces a downward sloping demand curve.

What is equilibrium quantity ?

What are the conditions of producer's equilibrium under perfect competition and monopoly ?

Explain the concept of linear demand function and calculate its slope.

Among the following demand curves, which one is more elastic ?

Explain the meaning of change in quantity demanded. How does it affect demand curve?

What is the law of diminishing marginal product ?

Simple Random Sampling is:

How is TPP derived from MPP schedule ?

What is average variable cost?

Explain the meaning and implications of maximum price ceiling and minimum price ceiling.

What is meant by the problem of "For whom to produce"?

(i) There is a certain bias involved in the non-random selection of samples (true/false).

Discuss how you would use the lottery method to select 3 studentout of 10 in your class.

What is meant by profit ?

Expressing choices in terms of first preference, second preference, third preference and so on is expression in termsof :

The price elasticity of supply of a commodity Y is half the price elasticity of supply of commodity X. 16 percent rise in price of X results in 40 percent rise in its supply. If the price of Y falls by 8 percent, calculate the percentage fall in its supply.

The minimum point of average cost curve lies of the right of average variable cost curve.

In case of good A 100 units sold at a price of Rs. 10 per unit. In case of good B only 10 units are sold at a price of Rs. 120 per unit. The weighted mean of the prices of the two goods is :

Distinguish between microeconomics and macroeconomics.

In monopolistic competion

A person's MU schedule is given below. Derive TU : {:("Units consumed",1,2,3,4,5,6,),(MU,9,6,4,2,0,-2,):}

In case of _____ ogive, the cumulative total tends to increase. (less than / more than)

When price falls with rise in output, TR is _______ when MR is zero.

How does the availability of close subtitutes is more elastic of demand for a product ?

Explain the implications of "large number of buyers" under perfect competition.

Explain the reasons for: (i) Increasing Returns to a Factor (ii) Diminishing Returns to a Factor (iii) Negative Returns to a Factor

What changes will take place in TU, when (i) MU curve remains above the X-axis, (ii) MU curve touches the X-axis, (iii) MU curve lies below the X-axis.

State three features of monopoly.

Calculate the arithmetic mean of the following frequency distribution by Direct Method: {:("Class Interval",10-20,20-40,40-70,70-120,120-200),("Frequency"," "4," "10," "26," "8," "2):}

Both variable and fixed factors exist in case of zero output.