7498 + Interview Questions in Economics in Class 11 Page 116 InterviewSolution

5751.	The Government establishes a large number of institutes of science and technology. How will it affect the productioln possibilility frontier? Explain.
Answer» SOLUTION :By these institutes skill DEVELOPMENT will improve. This WOULD result in increase in the production potential of the COUNTRY. So the PPF will SHIFT to the right.

Discussion

5752.	Random sampling is:
Answer» By CHOICE By chance Both a and B None of the above. SOLUTION :B

Discussion

5753.	Explain the conditions of consumer's equilibrium in case of : (i) Single Commodity, and (ii) Two Commodities. Use utility approach
Answer»

Discussion

5754.	Explain the relationship between average total cost curve, average variable cost curve and marginal cost diagram.
Answer» Solution :The average total cost curve is typically U-shaped. ... MARGINAL cost (MC) is calculated by taking the change in total cost between two LEVELS of output and dividing by the change in output. The marginal cost curve is upward-sloping. Average VARIABLE cost obtained when variable cost is DIVIDED by quantity of output.

Discussion

5755.	Expansion in demand leads to an upward movement along the same demand curve
Answer» SOLUTION :Expansion leads to a DOWNWARD MOVEMENT ALONG the same DEMAND curve.

Discussion

5756.	At price of Rs. 8 per unit, the quantity supplied of a commodity is 200 units. Its price elasticity of supply is 1.5 . If its price rises to Rs. 10 per unit , calculate its quantity supplied at the new price .
Answer» <P> Solution :`E_(s)=(P)/(Q_(s))XX(DeltaQ_(s))/(DeltaP)` `1.5=(8)/(200)xx(DeltaQ_(s))/(2)` `8DeltaQ_(s)=600` `DeltaQ_(s)=75` New `Q=Q_(s)+DeltaQ_(s)=200+75=275` UNITS

Discussion

5757.	Can AC be more than MC when AC is rising?
Answer» Solution :YES, AC can FALL, when MC is rising. HOWEVER, it is possible only when MC is less than AC. It means that as long as MC CURVE is below the AC curve, AC will fall even if MC is rising.

Discussion

5758.	If price of x rises and it causes decrease in demand of y, how are these related?
Answer» SOLUTION :These GOODS are COMPLEMENTARY to each other.

Discussion

5759.	Why is demand curve of a firm under monoplistic competition more elastic than under in monopoly. Explain.
Answer» SOLUTION :Demand curve under monopoly is less elastic because of no or very LOW AVAILABILITY of substitutes. In the case of monopolistic competition, the demand is more elastic SINCE there are comparatively more substitutes available for the consumers and hence the consumers can shift to other sellers.

Discussion

5760.	Explain the implications of the following features of perfect competition : (i) Large number of buyers and sellers (ii) Freedom of entry exit of firms.
Answer»

Discussion

5761.	How do change in MR effect TR ?
Answer» SOLUTION :TR = `sum`MR. So, if MR is positive and INCREASING TR INCREASES at an increasing rate. If MR is positive and DECREASING, TR increases at a decreasing rate. If MR becomes negative, TR starts falling.

Discussion

5762.	What happens to AC whenMC is equal to AC ?
Answer» SOLUTION :AC is CONSTANT and at its MINIMUM POINT.

Discussion

5763.	If we use the data collected by some other person, it is known as secondary data. (True/False)
Answer» ANSWER :TRUE

Discussion

5764.	Reliability of sampling data depends on :
Answer» SIZE of sample method of SAMPLING training of ENUMERATORS all of these Solution :D

Discussion

5765.	Maximum price ceiling referes to :
Answer» Maximum RETAIL price Maximum price the buyer is WILLING pay Maximum price at which the SELLER is willing to sell Maximum price the producer is LEGALLY ALLOWED to charge Answer :D

Discussion

5766.	Which of the following methods is used when a inverstigator collects the requied information with the informant?
Answer» Direct PERSONAL investigation INDIRECT ORAL Investigation MAILING Method ENUMERATOR's Method Solution :A

Discussion

5767.	Coefficient of standard deviation is a ……………….. Measure of the dispersion of series. (absolute/relative)
Answer» SOLUTION :RELATIVE

Discussion

5768.	Suppose prices of only two goods the consumer consumes are doubled, and at the same time income is also doubled, the consumer's utility level at equilibrium in the IC analysis.
Answer» FALLS Increases Remain UNCHANGED Uncertain Answer :A

Discussion

5769.	State the law of demand.
Answer» SOLUTION :The law of demand states that there is an INVERSE relationship between price and quantity DEMANDED of a good, given all the other factors CONSTANT.

Discussion

5770.	Vehicular pollution in India is increasing at an alarming high rate. State any two ways in which it can be controlled.
Answer» SOLUTION :The following steps will help to control the pollution: (i) USE of alternative fuels: Fuels like LPG, CNG and BATTERY operated vehicles should be promoted as they release less pollution as compared to petrol and diesel. (ii) Regular Pollution Check up: It must be ENSURED that the pollution chack for the vehicle is done at regular intervals.

Discussion

5771.	Invention of new technologies and discovery of new resources will solve the central problems completely, Defend or Refute.
Answer» Solution :The statement is REFUTED. The INVENTION of new technologies and discovery of new resources will expand the production capacity surely, but our central problems will not be completely SOLVED because unlimited human remain ahead of the AVAILABLE resources (natural and ACQUIRED).

Discussion

5772.	A perfectly competitive firm faces:
Answer» CONSTANT PRICE Constant AVERAGE REVENUE Constant MARGINAL revenue All of these Solution :N/a

Discussion

5773.	For a non-viable industry, supply curve lies above the demand curve.
Answer» Solution :It happens because the price, at which producers are ready to produce, is so high that CONSUMERS are not willing to buy EVEN a SINGLE UNIT.

Discussion

5774.	How many are the absolute measures of dispersion?
Answer» SOLUTION :RANGE, QUARTILE Deviation, MEAN Deviation, Standard Deviation.

Discussion

5775.	Why does the problem of choice arise?
Answer» Solution :An economic problem is basically the problem of CHOICE which arises because of scarcity of resources. HUMAN WANTS are unlimited but means to SATISFY them are LIMITED. Therefore, all human wants cannot be satisfied with limited means. ... Economic problem arises the moment problem of choice arises.

Discussion

5776.	Explain the effect of increase in income of byers of a'normal' commodity on its equilbrium price.
Answer» Solution :An increase in income of buyers will increase the demand for normal goods at the given price. It will lead to excess demand. This LEADS to competition AMONG buyers, which raises the price. Increase in price leads to rise in supply and fall in demand. These changes continue TILL supply and demand become EQUAL at a new EQUILIBRIUM price. As there is an increase in demand only, equilibrium price rises.

Discussion

5777.	Define the following terms: (i) Indifference curve, (ii) Indifference map, (iii) marginal rate of substitution.
Answer» Solution :(i) INDIFFERENCE curve: An indifference curve is a graph showing combination of two goods that give the consumer equal satisfaction and utility. Each point on an indifference curve indicates that a consumer is indifferent between the two and all points give him the same utility.(ii) Indifference map: The Indifference Map is the graphical representation of two or more indifference curves showing the several combinations of DIFFERENT quantities of commodities, which consumer consumes, given his income and the market price of goods and services.(iii) marginal rate of SUBSTITUTION: the marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of one good in exchange for another good while MAINTAINING the same level of utility. At equilibrium consumption levels (assuming no EXTERNALITIES), marginal rates of substitution are identical.

Discussion

5778.	What is consumption?
Answer» Solution :Consumption is the process of using up UTILITY VALUE of goods and SERVICES for the direct SATISFACTION of our wants. Utility value of goods means inherent capacity of goods and services to satisfy human wants.

Discussion

5779.	Complex table may be classified as:
Answer» GENERAL purpose and SPECIAL purpose table original and derived double, treble and MANIFOLD table none of these Solution :C

Discussion

5780.	"Average Variable cost Curve reaches its minimum point before the Average Cost Curve". Comment
Answer» Solution :The given STATEMENT is CORRECT. It happens because average cost continues to fall DUE to decreasing average fixed cost even after average variable cost starts RISING.

Discussion

5781.	There is a 'Law' in theory of consumer behaviour which states that as a consumer consumes more and more units of a good, the utility from each new unit consumed :
Answer» INCREASES Remains constant Decreases Increases INITIALLY remains constant and ultimately decreases. ANSWER :C

Discussion

5782.	How does the nature of a commodity influence its price elastictiy of demand?
Answer» Solution :The elasticity of DEMAND for a good depends upon the nature of the good, i.e., WHETHER the good is a necessary or a luxury good. The elasticity of demand for a necessary good is relatively SMALL. For example, if the price of such a good rises, its buyers GENERALLY are not able to reduce its demand.

Discussion

5783.	In notationP_(01')1 stand for:
Answer» CURRENT year reference year both (a) and (B) NONE of these Answer :A

Discussion

5784.	Given reason, comment on the shape of Production Possibilities Curve based on the following table, {:("Good X (units)","Good Y (units)"),(0,4),(1,3),(2,2),(3,1),(4,0):}
Answer» Answer :As MRT is CONSTANT, PPC will be downward SLOPING straight LINE)

Discussion

5785.	Distinguish between : (i) Fixed Cost and Variable Cost, (ii) Explicit Cost and Implicit Cost.
Answer»

Discussion

5786.	What changes will take place in average cost if marginal cost is rising?
Answer» SOLUTION :when MC RISES, AC ALSO rises.

Discussion

5787.	DD' is a demand curved, A and B are two points on it, price elasticity of demand at point A is :
Answer» LESS than ELASTICITY of DEMAND at B. Equal to elasticity of demand at B. Greater than elasticity of demand at B. Less than 1. Answer :C

Discussion

5788.	The market supply of a good is determined by
Answer» EXCISE TAX rate state of technology price of inputs all of these. Answer :D

Discussion

5789.	What happens to TR when MR is positive ?
Answer» Solution :When MR is POSITIVE, TR INCREASES as the OUTPUT increases.

Discussion

5790.	What is shift in PPC ?
Answer» Solution :Shift in PPC OCCURS when there is CHANGE in RESOURCES or technology for both the GOODS.

Discussion

5791.	Give two examples of fixed cost of a firm.
Answer» SOLUTION :EXAMPLES of fixed costs are RENT and INSURANCE PREMIUMS

Discussion

5792.	The production function does not depend on the state of technology.
Answer» SOLUTION :FALSE. Production function is ALWAYS defined with RESPECT to a given STATE of technology. Any change in technology will change the production function.

Discussion

5793.	Define the following terms: (1) Marginal utility, (2) Total utility, (3) Initial utility
Answer» Solution :a) In economics, utility is the SATISFACTION or benefit derived by consuming a product; thus the marginal utility of a goods or service is the change in the utility from an increase in the consumption of that good or service. b) TOTAL utility is the total satisfaction received from consuming a given total QUANTITY of a good or service, while marginal utility is the satisfaction gained from consuming an additional quantity of a particular good or service. c) Initial utility is the utility derived from the consumption of the first unit of a commodity.It is always positive.For example, if a consumer starts EATING bread the utility he gets from first unit is called initial utility. This conversation is already CLOSED by Expert.

Discussion

5794.	There are no barriers in the way of firms leaving or joiningindustry in a perfectly competitive market. Explain the significance of this feature.
Answer» Solution :'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 the 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.

Discussion

5795.	What is the 'price line' ?
Answer» Solution :Price line is a horizontal line that REPRESENTS the MARKET price for a perfectly competitive firm.

Discussion

5796.	Define total revenue.
Answer» SOLUTION :Total revenue is the total AMOUNT of money receipts received from the sale of a particular LEVEL of OUTPUT by a FIRM.

Discussion

5797.	Calculate coefficient of correlation by means of ranking method from the following data :
Answer» Solution : In this question in X series, the values 60 and 50 are repeated thrice and TWICE. The averages rank for the VALUE 60 is `4(3+4+5 div 3)` while for the value 50 it is 6.5 `(6+7 div 2)`. In both the cases, the correlation factor will be `(1)/(12)(3^(3)-3) " and " (1)/(12)(2^(3)-2)` respectively . In series Y, the 130 is repeated twice. The average rank for the value 130 is 5.5 `(5+6 div 2)`. In this case, correlation factor will be `(1)/(12)(2^(3)-2)`. `r_(k)=1-(6[SUMD^(2)+(1)/(12)(m_(1)^(3)-m_(1))+(1)/(12)(m_(2)^(3)-m_(2))+(1)/(12)(m_(3)^(3)-m_(3))])/(N^(3)-N)` Here, `sumD^(2)=45,m_(1)=3,m_(2)=2,m_(3)=2N=8` By substituting values in the above formula, we get `r_(k)=1-(6[45+(1)/(12)(3^(3)-3)+(1)/(12)(2^(3)-2)+(1)/(12)(2^(3)-2)])/((8)^(3)-8)` `=1-(6[45+(1)/(12)(24)+(1)/(12)(6)+(1)/(12)(6)])/(512-8)` `=1-(6(45+2+(1)/(2)+(1)/(2)))/(504)=1-(6(48))/(504)=1-(288)/(504)=1-0.571=0.429` Coefficient of Rank Correlation `(r_(k))=0.429`

Discussion

5798.	Give the meaning of marginal cost ?
Answer» Solution :Marginal COST refers to the ADDITION to TOTAL cost, when ONE more unit of output is PRODUCED.

Discussion

5799.	(a) Explain properties of budget line. (b)Explain MRS with the help of a numerical example.Also explain its behaviour along an indifference curve
Answer»

Discussion

5800.	How does TR change with output when MR is negative ?
Answer» SOLUTION :MR is the addition to TR. Hence NEGATIVE MR implies that TR will fall with the rise in output.

Discussion

Explore topic-wise InterviewSolutions in .

The Government establishes a large number of institutes of science and technology. How will it affect the productioln possibilility frontier? Explain.

Random sampling is:

Explain the conditions of consumer's equilibrium in case of : (i) Single Commodity, and (ii) Two Commodities. Use utility approach

Explain the relationship between average total cost curve, average variable cost curve and marginal cost diagram.

Expansion in demand leads to an upward movement along the same demand curve

At price of Rs. 8 per unit, the quantity supplied of a commodity is 200 units. Its price elasticity of supply is 1.5 . If its price rises to Rs. 10 per unit , calculate its quantity supplied at the new price .

Can AC be more than MC when AC is rising?

If price of x rises and it causes decrease in demand of y, how are these related?

Why is demand curve of a firm under monoplistic competition more elastic than under in monopoly. Explain.

Explain the implications of the following features of perfect competition : (i) Large number of buyers and sellers (ii) Freedom of entry exit of firms.

How do change in MR effect TR ?

What happens to AC whenMC is equal to AC ?

If we use the data collected by some other person, it is known as secondary data. (True/False)

Reliability of sampling data depends on :

Maximum price ceiling referes to :

Which of the following methods is used when a inverstigator collects the requied information with the informant?

Coefficient of standard deviation is a ……………….. Measure of the dispersion of series. (absolute/relative)

Suppose prices of only two goods the consumer consumes are doubled, and at the same time income is also doubled, the consumer's utility level at equilibrium in the IC analysis.

State the law of demand.

Vehicular pollution in India is increasing at an alarming high rate. State any two ways in which it can be controlled.

Invention of new technologies and discovery of new resources will solve the central problems completely, Defend or Refute.

A perfectly competitive firm faces:

For a non-viable industry, supply curve lies above the demand curve.

How many are the absolute measures of dispersion?

Why does the problem of choice arise?

Explain the effect of increase in income of byers of a'normal' commodity on its equilbrium price.

Define the following terms: (i) Indifference curve, (ii) Indifference map, (iii) marginal rate of substitution.

What is consumption?

Complex table may be classified as:

"Average Variable cost Curve reaches its minimum point before the Average Cost Curve". Comment

There is a 'Law' in theory of consumer behaviour which states that as a consumer consumes more and more units of a good, the utility from each new unit consumed :

How does the nature of a commodity influence its price elastictiy of demand?

In notationP_(01')1 stand for:

Given reason, comment on the shape of Production Possibilities Curve based on the following table, {:("Good X (units)","Good Y (units)"),(0,4),(1,3),(2,2),(3,1),(4,0):}

Distinguish between : (i) Fixed Cost and Variable Cost, (ii) Explicit Cost and Implicit Cost.

What changes will take place in average cost if marginal cost is rising?

DD' is a demand curved, A and B are two points on it, price elasticity of demand at point A is :

The market supply of a good is determined by

What happens to TR when MR is positive ?

What is shift in PPC ?

Give two examples of fixed cost of a firm.

The production function does not depend on the state of technology.

Define the following terms: (1) Marginal utility, (2) Total utility, (3) Initial utility

There are no barriers in the way of firms leaving or joiningindustry in a perfectly competitive market. Explain the significance of this feature.

What is the 'price line' ?

Define total revenue.

Calculate coefficient of correlation by means of ranking method from the following data :

Give the meaning of marginal cost ?

(a) Explain properties of budget line. (b)Explain MRS with the help of a numerical example.Also explain its behaviour along an indifference curve

How does TR change with output when MR is negative ?