7498 + Interview Questions in Economics in Class 11 Page 115 InterviewSolution

5701.	A consumer consumes only two goods X and Y and plans to spend entire income on these. The prices of X and Y are respecively rupeees 7 and rupees 8 per unit respectively. In the plan marginal utilities of X and Y turn out to be 8 units and 7 utils respectively. Suppose marginal utility in case of each good remains unchanged as more or less is consumed. In such a case consumer will :
Answer» But only X Buy only Y Buy both X and Y in equal QUANTITIES STICK to his plan ANSWER :A

Discussion

5702.	Give two example of implicit cost.
Answer» SOLUTION :(i) INTEREST on owncapital, (II) RENT of own LAND.

Discussion

5703.	Fall in demand of good 'X', due to expectation of fall in its price in future is
Answer» EXTENSION of DEMAND DECREASE in demand CONTRACTION of demand increase in demand Answer :B

Discussion

5704.	A budget set is a collection of such bundles of goods that given same satisfaction. True or false ? Give reason.
Answer» Solution :False. A budget set is a COLLECTION of such bundless of goods which a CONSUMER can AFFORD, GIVEN income and prices.

Discussion

5705.	What is positional average ?
Answer» SOLUTION :POSITIONAL average are those averages whose values is worked out on the basis of their POSITION in the statistical SERIES.

Discussion

5706.	The point where ' less than ogive' and more than ogive ' intersect each other determines median .
Answer» SOLUTION :TRUE , due to this intersection , we GET MEDIAN.

Discussion

5707.	Consider the demand for a good . At price ₹ 4 , the demand for the good is 25 units . Suppose price of the good increases to ₹5 andas a result, the demand for the good falls to 20 units. Calculate the price elasticty.
Answer» Solution :Given: Original QUANTITY (Q) =25 units, Fall in Qunatity `(DeltaQ) =-5` units, New Qunatity `(Q_(1)` =20 units, Original price (P)= ₹4, Rise in price `(DeltaP)`= ₹ 1, New price `(P_(1)) = ₹5` price . Elasticity of Demand `(E_(d))= (DeltaQ)/(DeltaP)xxP/Q=(-5)/1 XX 4/25 = (-) 0.8 ` Demand is less elastic as `E_(d) lt 1`. Negative SIGN indicates the inverse relationship between price and the quantity DEMANDED.

Discussion

5708.	Bar diagrams are those diagrams in which data are presented in the form of bars or rectangles. (True/False)
Answer» SOLUTION :TRUE

Discussion

5709.	What are the types of arithmetic mean?
Answer» Solution :The TWO TYPES ofarithmetic MEAN are: (i) SIMPLE arithmetic mean, and (ii) WEIGHTED arithmetic mean

Discussion

5710.	If a commodity has large number of subsitutes, then its demand curve will be:
Answer» P Q both a and B Neither a nor b SOLUTION :N/a

Discussion

5711.	The following tables gives height nad weight of the students of a class. Make a scattered diagram to show if the relationship is positive or negative and if the relationship is strong or weak.
Answer» Solution : A glance at the above diagram shows that there is positive RELATIONSHIP between height and weight of the students. The dots are moving upward in a paticular course from left to right. It shows that with the INCREASEIN height, weight alos increase. HOWEVER, this is a case of limited positvie correlation, because the dots do not make any straight LINE

Discussion

5712.	If X and Y are substitutes of one another, then relationship between the prices of good X and demand of good Y will be shown by a curve that will slope upwards.
Answer» Solution :In case of substitude GOODS, there exist a positive relation between PRICE of good X and DEMAND of good Y. So, the CURVE will SLOPE upwards.

Discussion

5713.	What is meant by average physical product (APP) or average product ?
Answer» Answer :APP is the TPP PER UNIT EMPLOYMENT of variable input i.e., APP=`T P P//x_1` here, `x_1` indicates level of employment of variable input .

Discussion

5714.	In the following frequency distribution, if the arithmetic mean is 45.6, find out missing frequency. {:("Wages(Rs.)",10-20,20-30,30-40,40-50,50-60,60-70,70-80),("Number of Workers"," "5," "6," "7," "X," "4," "3," "9):}
Answer» ANSWER :MISSING FREQUENCY = 16

Discussion

5715.	Distinguish between perfect and imperfect oligopoly
Answer» Solution :If the FIRMS PRODUCE a homogeneous product, like CEMENT or steel, the industry is CALLED a pure or perfect OLIGOPOLY.If the firms produce a differentiated product, like automobiles, the industry is called differentiated or imperfect oligopoly.

Discussion

5716.	Explain the rationale behind the conditions of equilibrium ofproducer.
Answer» SOLUTION :N/a

Discussion

5717.	No selling costs are required in
Answer» MONOPOLY MONOPOLISTIC COMPETITION PERFECT competition oligopoly. Answer :C

Discussion

5718.	(a) Why is Total Variable Cost curve inverse S-shaped? (b) What is Average Fixed Cost of a firm ? (b) What is Average Fixed Cost of a firm ? Why is an Average Fixed Cost Curve a rectangular Hyperbola ? Explain with help of a diagram.
Answer» Solution :(a) TOTAL Variable Cost is zero at zero level of output. It initially increases at decreasing rate and LATE it increases at increasing rate. TVC is an inversely S-shaped curve due to the Law of Variable Proportion. (b) Average fixed cost refers to the per unit fixed cost of production. Value of Total Fixed Cost (TFC) does not VARY at any level of output. When constant TFC is DIVIDED by incremental output, the result would be falling AFC. AFC diminishes by the same proportion as that of the proportion of increase of the number of units and the product will always be same and equal to TFC. AFC keeps on falling as the level of output increases, but can never BECOME zero. As a result, AFC curve is a 'rectangular hyperbola'

Discussion

5719.	What is the effect on marginal rate of transformation when we move downwards along a production possibility curve?
Answer» SOLUTION :MARGINAL Rate of Transformation increase while we move DOWNWARDS along a PRODUCTION possibility curve (PPC).

Discussion

5720.	Identify the inferior good
Answer» Scooter Bajra Wheat None of these Answer :D

Discussion

5721.	Name the principal methods of calculating cofficient of correlation .
Answer» Solution :There are THREE principal methods of CALCULATING COEFFICIENT of correlation : (i) Scattered diagram method. (ii) Karl Pearson's coefficient of correlation ,and (iii) SPEARMAN's Rank Correlation coefficient .

Discussion

5722.	Give the meaning of oligopoly.
Answer»

Discussion

5723.	What is decrease in demand and increase in demand?
Answer» SOLUTION :Decrease in demand REPRESENTS a fall in demand of the commodity due to a CHANGE in other FACTORS affecting the demand of the commodity other than the own price of the commodity whereas increase in demand represents a RISE in demand of the commodity due to a change in other factors affecting the demand of the commodity other than the own price of the commodity

Discussion

5724.	When there are diminishing returns to a factor, total product always decreases.
Answer» SOLUTION :FALSE. When there are diminishing RETURNS to a factor, TOTAL product increases at a decreasing RATE.

Discussion

5725.	When TR fallse, what happens to MR ?
Answer» SOLUTION :MR is NEGATIVE.

Discussion

5726.	What is the effect on MR when TR increases at constant
Answer» Solution :When TR increases at a CONSTANT rate, MR falls but remains positive.

Discussion

5727.	Explain with the help of diagrams, the effect of following changes on the demand of a commodity: (i) Change in the income of consumer (ii) Unfavourable change in the taste of buyer for the taste of buyer for the commodity (iii) Change in prices of related goods
Answer»

Discussion

5728.	What is the relation between marginal costand average variable cost whenmarginalcost is rising and average variable cost in falling ?
Answer» SOLUTION :Marginal COST is LESS than Average VARIABLE Cost.

Discussion

5729.	Explain why a production possibilities curve is concave.
Answer» Solution :PPC curve is concave to the ORIGIN because the OPPURTUNITY cost of PRODUCING a GOOD increases when we produce more of that good.PPC is concave to the origin because of increasing Marginal opportunity cost.

Discussion

5730.	In ________ arithmetic mean, all items of a series are given equal importance. (Simple/Weighted)
Answer» ANSWER :SIMPLE

Discussion

5731.	A seller rises supply of a good from 100 units to 200 units at a price of Rs.10 per unit. What will be P.e_(S)?
Answer» infinity zero one less than one. Answer :A

Discussion

5732.	"Producer is also not in equilibrium when marginal cost is more than marginal cost" Comment.
Answer» SOLUTION :N/a

Discussion

5733.	What does Monopolistic Comptition mean?
Answer» SOLUTION :MONOPOLISTIC Competition refers to a market situation inwhich there are large number of firms which sell closely releated, different PRODUCT

Discussion

5734.	Demand curve for automobiles shift towards right due to opening up of a new automobile dealer in the town.
Answer» Solution :A new AUTOMOBILE DEALER will not affect the demand for AUTOMOBILES. So, there will be no change in demand or demand curve of automobiles.

Discussion

5735.	Giving reason, explain whether true or false : the difference between average cost and average variable cost is always constant.
Answer» SOLUTION :FALSE, because the difference between average cost and average variable cost is average fixed cost which can NEVER be constant.Since AFC tends to decline with increase in output,the difference between AC and AVC must reduce as output INCREASES.

Discussion

5736.	Maximum price ceiling above the equilibrium price leads to :
Answer» EXCESS demand Excess supply Neither (a) nor (B) EITHER (a) or (b) ANSWER :C

Discussion

5737.	Census method is suitable for that investigation in which :
Answer» The size of POPULATION is large high DEGREE of ACCURACY is not required there are widely DIVERSE ITEMS intensive examination of diverse items is not required Solution :C

Discussion

5738.	Draw average total cost, average variable cost and marginal cost curves in a single diagram. Also,explain the relationship between ATC and AVC.
Answer» Solution : The AVERAGE variable cost (AVC) is the total variable cost PER unit of output. This is FOUND by DIVIDING total variable cost (TVC) by total output (Q).

Discussion

5739.	Initially, even when there is an increase in AVC, AC may still decline because :
Answer» FALL in `AFC LT "RISE in" AVC` Fall in `AFC gt "Rise in AVC"` Fall in `AFC =` Rise in AVC None of these Solution :N//A

Discussion

5740.	An Indifference Curve represents all those combinations of two goods which give:
Answer» No SATISFACTION to the Consumer Lower satisfaction to the Consumer Higher satisfaction to the consumer Equal satisfaction to the Consumer Answer :D

Discussion

5741.	A simple table is that table which shows only one characteristic of the data.
Answer» SOLUTION :TRUE

Discussion

5742.	Define money costs
Answer» SOLUTION :It refers to the total money EXPENSES INCURRED by a firm in PRODUCING a commodity.

Discussion

5743.	Suppose the value of demand and supply curves of a Commodity-X is given by the following two equations simultaneously: Qd=200-10p""Qs=50+15p (i) Find the equilibrium quantity of commodity X. (ii) Suppose that the price of a factor inputs used in producing the commodity has changed, resulting in the new supply curve given by the equation. Qs=100+15p Analyse the new equilibrium price and new equilibrium quantity as against the original equilibrium price and equilibrium quantity.
Answer» Solution :Equilibrium price and equilibrium quantity are DETERMINED at a POINT where quantity demanded is equal to quantity supplied `Q_(d)=200-10p""Q_(s)=50+10P` At equilibrium: `""Q_(d)=Q_(s)` `200-10P=50+15P` 25P = 150 P = 6 Equilibrium quantity `Q_(d)=200-10P` `=200-10(6)=200-60=140`units `Q_(s)=50+15P` `50+15(6)=50+90=-140`units Equilibrium price = Rs.6 Equilibrium quantity = 140 units (ii) When price of a FACTOR input used in producing the COMMODITY has changed, resulting in a new supply curve, `Q_(s)=100+15P` New equilibrium price : `200-10P=100+15P or 25P=100` P = 4 New equilibrium quantity `Q_(d)=200-10P=200-10(4)=200-40=160` `Q_(s)=100+15P=100+15(4)=100+60=160` As equilibrium price reduced from Rs.6 to Rs.4 per unit, equilibrium quantity increased from 140 units to 160 units.

Discussion

5744.	Formula for finding mid-value is given by:
Answer» `l_2-l_1` `(l_2-l_1)/2` `l_1+l_2` `(l_1+l_2)/2` ANSWER :D

Discussion

5745.	What does a rightward shift of demand curve indicate ?
Answer» SOLUTION :INCREASE in DEMAND

Discussion

5746.	If X and Y are Complementary Goods, then with increase in price of X :
Answer» DEMAND of X will DECREASE and demand of Y will INCREASE Demand of X will increase and demand of Y will decrease Demand of X and Y will increase Demand of X and Y will decrease. Answer :D

Discussion

5747.	There are two goods. Both are being sold at different prices but the quantities sold in case of both is the same. In this situation :
Answer» SIMPLE arithmetic mean of prices will be higher than that of WEIGHTED aritmetic mean. Simple aritmetic mean of prices will be lower than that of weighted aritmetic mean. Both will be equal. Any of THEABOVE. Solution :C

Discussion

5748.	The total cost at 5 units of output is Rs. 30. The fixed cost is Rs. 5. The average variable cost at 5 units of output is :
Answer» RS. 25 Rs. 6 Rs. 5 Rs. 1 Answer :C

Discussion

5749.	What is the behaviour of Total Variable Cost as output increase ?
Answer» SOLUTION :AVERAGE FIXED COST FALLS continously.

Discussion

5750.	Minimum price ceiling refers to the minimum price :
Answer» the BUYER is willing to pay the SELLER is willing to charge the buyer must BUY at all of these Solution :N/a

Discussion

Explore topic-wise InterviewSolutions in .

Give two example of implicit cost.

Fall in demand of good 'X', due to expectation of fall in its price in future is

A budget set is a collection of such bundles of goods that given same satisfaction. True or false ? Give reason.

What is positional average ?

The point where ' less than ogive' and more than ogive ' intersect each other determines median .

Consider the demand for a good . At price ₹ 4 , the demand for the good is 25 units . Suppose price of the good increases to ₹5 andas a result, the demand for the good falls to 20 units. Calculate the price elasticty.

Bar diagrams are those diagrams in which data are presented in the form of bars or rectangles. (True/False)

What are the types of arithmetic mean?

If a commodity has large number of subsitutes, then its demand curve will be:

The following tables gives height nad weight of the students of a class. Make a scattered diagram to show if the relationship is positive or negative and if the relationship is strong or weak.

If X and Y are substitutes of one another, then relationship between the prices of good X and demand of good Y will be shown by a curve that will slope upwards.

What is meant by average physical product (APP) or average product ?

In the following frequency distribution, if the arithmetic mean is 45.6, find out missing frequency. {:("Wages(Rs.)",10-20,20-30,30-40,40-50,50-60,60-70,70-80),("Number of Workers"," "5," "6," "7," "X," "4," "3," "9):}

Distinguish between perfect and imperfect oligopoly

Explain the rationale behind the conditions of equilibrium ofproducer.

No selling costs are required in

(a) Why is Total Variable Cost curve inverse S-shaped? (b) What is Average Fixed Cost of a firm ? (b) What is Average Fixed Cost of a firm ? Why is an Average Fixed Cost Curve a rectangular Hyperbola ? Explain with help of a diagram.

What is the effect on marginal rate of transformation when we move downwards along a production possibility curve?

Identify the inferior good

Name the principal methods of calculating cofficient of correlation .

Give the meaning of oligopoly.

What is decrease in demand and increase in demand?

When there are diminishing returns to a factor, total product always decreases.

When TR fallse, what happens to MR ?

What is the effect on MR when TR increases at constant

Explain with the help of diagrams, the effect of following changes on the demand of a commodity: (i) Change in the income of consumer (ii) Unfavourable change in the taste of buyer for the taste of buyer for the commodity (iii) Change in prices of related goods

What is the relation between marginal costand average variable cost whenmarginalcost is rising and average variable cost in falling ?

Explain why a production possibilities curve is concave.

In ________ arithmetic mean, all items of a series are given equal importance. (Simple/Weighted)

A seller rises supply of a good from 100 units to 200 units at a price of Rs.10 per unit. What will be P.e_(S)?

"Producer is also not in equilibrium when marginal cost is more than marginal cost" Comment.

What does Monopolistic Comptition mean?

Demand curve for automobiles shift towards right due to opening up of a new automobile dealer in the town.

Giving reason, explain whether true or false : the difference between average cost and average variable cost is always constant.

Maximum price ceiling above the equilibrium price leads to :

Census method is suitable for that investigation in which :

Draw average total cost, average variable cost and marginal cost curves in a single diagram. Also,explain the relationship between ATC and AVC.

Initially, even when there is an increase in AVC, AC may still decline because :

An Indifference Curve represents all those combinations of two goods which give:

A simple table is that table which shows only one characteristic of the data.

Define money costs

Formula for finding mid-value is given by:

What does a rightward shift of demand curve indicate ?

If X and Y are Complementary Goods, then with increase in price of X :

There are two goods. Both are being sold at different prices but the quantities sold in case of both is the same. In this situation :

The total cost at 5 units of output is Rs. 30. The fixed cost is Rs. 5. The average variable cost at 5 units of output is :

What is the behaviour of Total Variable Cost as output increase ?

Minimum price ceiling refers to the minimum price :