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5851.

Explain the meaning of excess demand and excess supply with the help of a schedule. Explain their effect on equilibrium price.

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SOLUTION :Excess demand refers to a SITUATION where market demand is more than the market SUPPLY at the PREVAILING price.
Excess supply refers to a situation where market supply is more than the market demand at the prevailing price.
Discussion
5852.

The part of universe selected for investigation is called:

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Population
SAMPLE
Primary sampling UNIT
ELEMENTARY sampling unit.

SOLUTION :B
Discussion
5853.

What is the behaviour of TP, when: (i) MP rises, (ii) MP falls, but remains positive, (iii) MP is zero, (iv) MP becomes negative.

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Solution :The behavior of TP in different CASES will be :
(i) TP increase at INCREASING RATE.
(ii) TP increases at diminishing rate.
(iii) TP is at its maximum point.
(iv) TP decreases
Discussion
5854.

Product differentiation is a distinguishing feature for which form of market

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Monopoly
Oligopoly
Perfect COMPITION
Monoplistic competition

Solution :D
Discussion
5855.

Explain the conditions of producer's equilibrium with the help of a schedule, assuming that the producer can sell more at the same price. Explain the conditions of producer's equilibrium under perfect competition.

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SOLUTION :N/a
Discussion
5856.

The price elastically of demand for life-saving drugs is inelastic. As a result, manufacture have the freedom to fix higher prices for them. How can this problem be handled?

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Solution :This problem can be handled through government INTERVENTION.
(i) The government needs to control the prices of life-saving drugs. "The Essential Commodities Act, 1955" AIMS to ENSURE EQUITABLE distribution of essential commodities at reasonable price.
(ii) The government can also provide subsidy to firms so that they may CHARGE less price for such items.
Discussion
5857.

Explain the conditions of producer's equilibrium with the help of a schedule , assuming that the producer can sell more only by lowering the price.

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SOLUTION :N/a
Discussion
5858.

In ______ , lower limit of the first class interval and the upper limit of the last class is not given . (open end series / mid - value series)

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ANSWER :OPEN END SERIES
Discussion
5859.

A price taker firm's average revenue change in the following manner as more output is produced :

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INCREASES
Decreases
Unchanged
Initially increases, then decreases

Answer :C
Discussion
5860.

A, B, and C are three commodities, where A and B are complementary , whereas A and C are substitudes. With increase in price commodity A :

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Demand of all the COMMODITIES A, B and C will FALL
Demand of commodities A and B will fall, whereas demand of C will rise
Demand of commodities A and C will fall, whereas demand of B will rise
Demand of commodities B and C will fall, whereas demand of A will rise

Answer :B
Discussion
5861.

What are the conditions of producer's equilibrium ?

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Solution :There are two approaches to analyse profits:
(i) Total revenue and total cost approach, and
(ii) Marginal revenue and marginal cost approach.
Under TR - TC approach, a producer is in equilibrium at that level of output where the DIFFERENCE between total revenue and total cost is the largest. In order to find equilibrium level of output, we CALCULATE the difference between TR and TC and see where profits are maximum and profits fall when one more unit is produced.
Under MR - MC approach, a producer is in equilibrium, (i.e., maximises profits) at that level of output where
(i) MR = MC and (ii) MC is rising after the EQUALITY between MR and MC.
Discussion
5862.

In which market form are goods sold at a uniform price? OR In which market form, can a firm not influence the price of the product?

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SOLUTION :PERFECT COMPETITION
Discussion
5863.

Definepriceelasticityof supply .

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SOLUTION :Priceelasity of supply REFERS to the degree of responsiveness of supply of a COMMODITY with referencetoa changein thepriceof such commdity
Discussion
5864.

What is meant by an ogive?

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Solution :Ogive is the curve which is CONSTRUCTED by PLOTTING cumulative frequency data on the GRAPH PAPER, in the form of a smooth curve.
Discussion
5865.

Why budget line is a straight line ?

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SOLUTION :The SLOPE of Budget line is represented by the PRICE Ratio. As Price Ratio is CONSTANT though, the budget line is a STRAIGHT line.
Discussion
5866.

Explain the effect of a rise in the prices of 'related goods' on the demand for a good X.

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Solution :There is POSITIVE relationship between price of substitue goods and the demand of a good. This means, when the price of substitue goods INCREASE, the demand of the good will ALSO increase.
On the other hand there is a negative relationship between price of complementary goods and the demand of the commodity, this IMPLIES when price of the complementary goods RISES, the demand of the commodity will fall.
Discussion
5867.

How does cost saving technology affect the equilibrium price and equilibrium quantity ?

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EQUILIBRIUM PRICE will FALL and equilibrium QUANTITY will fall
Equilibrium price will fall and equilibrium quantity will rise
Both equilibrium price and quantity will fall
Both equilibrium price and quantity will rise

Answer :(B)
Discussion
5868.

Find out (a) explicit cost and (b) implicit cost from the following: {:(,"Paticulars","(Rs. in Thousands)"),((i),"Investment in fixed assets",2000),((ii),"Borrowing at 12% interest per annum",1500),((iii),"Wages paid during the year",120),((iv),"Annual rental value of the owner's factory building",100),((v),"Annual depreciation",100),((vi),"Estimated annual value of the managment services of the owner",240):}

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SOLUTION :
Discussion
5869.

If in the previous question, each worker is given a hike of 10% in wages, how are the mean and standard deviation values affected?

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Solution :[Suppose the wage of ith worker s `x_(1)`.
Now, each worker is GIVEN a hike of 10 in wages, NEW wage of the ith worker will be:
New wage=`x_(1)+10% "of" x_(i)`
`=x_(1)+(10)/(100)xxx_(i)`
`=(100x_(i)+10x_(i))/(100)=(110x_(i))/(100)` ltbrge 1.1`x_(i)`
Thus, each observation of ith worker is multiplied by 1.1. Since it is case of change of SCALE, new mean and STANDARD deviation will be:
New`barX="Old "barXxx1.1`
`=200xx1.1`
=220
while,
New`sigma="Old "sigmaxx1.1`
`=40xx1.1`
=44
`:.` New mean =220
New standard deviation=44.]
Discussion
5870.

What do you mena by alternate uses of resources?

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Solution :Alternate use of RESOURCES MEANS that a RESOURCE can be put to more than one use.
Discussion
5871.

What is the baic method of finding third quartial in grouped data ?

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Discussion
5872.

Differentiate between: (i) Normal good and inferior good and (ii) Complementary goods and substitute goods. Give examples.

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Solution :(i) (a) Normal goods are the ones which have income effect posititve whereas INFERIOR goods are the ones which have income effect negative.
(B) A rise in income of the consumer leads to an increase in demand for the commodity and vice-versa in case of normal goods whereas a rise in income of the consumer leads to a fall in demand for the commodity and vice-versa in case of inferior goods.
Example :- Toned milk is an example of inferior good when compared with full cream milk which is a normal good.
Whether a good is inferior or not depends on the income status of the consumer, hence a good which is inferior for a consumer may not be inferior for other consumer.
(II) Substitute goods are the goods which are used in place of one another. For example, tea and coffee, coke and pepsi. On the other HAND, complementary goods are the ones which are used together or the goods complement the use of one another. For example, car and petrol, pen and ink.
(b) There is a positive relation between price of one substitute and the demand for other whereas there EXISTS a negative relation between price of one complementary and demand for its counterpart.
Discussion
5873.

"Increase in Supply" of a product is caused by:

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Improvemert in Technolcgy
Fall in PRICES of Factors of PRODUCTION
Fall in the Prices of other goods
All of these

Solution :all these will CAUSE an INCREASE in supply.
Discussion
5874.

In 'returns of a factor', the world return refers to :

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UNITS of output
Value of output
Total profit
Per UNIT profit

Answer :A
Discussion
5875.

If marginal Rate of Substitution is increasing throughout, the Indifference Curve will be :

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DOWNWARD SLOPING convex
Downward sloping concave
Downward sloping STRAIGHT LINE
Upward sloping convex

Answer :B
Discussion
5876.

What are the frequency diagrams?

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Solution :FREQUENCY DIAGRAMS relate to DIAGRAMMATIC PRESENTATION of 'frequency distributions'.
Discussion
5877.

Which form of market is also known as price maker firm?

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MONOPOLY
Oligopoly
Perfect COMPITION
Monoplistic competition

Solution :A.
Discussion
5878.

…………………. Is the arithmetic average of the deviations of all the values taken from some average value of the series, ignoring signs of the deviations. (Mean Deviation/Standard Deviation)

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SOLUTION :MEAN DEVIATION
Discussion
5879.

What is a complex table?

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Solution :A COMPLEX table is ONE which shows more than one characteristic of the data. They are further classified as: (i) Double or Two-way Table, (ii) Treble Table, and (iii) MANIFOLD table.
Discussion
5880.

Consumer Price Index is also known as:

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IndustrialProduction Index
Cost of LIVING Index
Wholesale PRICE Index
none of these

Answer :B
Discussion
5881.

Define consumer price index number.

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Solution :The consumer price INDEX is the index number which measures the average change in prices paid by the specificclass of CONSUMERS for goods and services consumedby them in the current year in COMPARISON with base year.
Discussion
5882.

Commodity 'X' when its technology improves.

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ANSWER :SHIFTS to RIGHT
Discussion
5883.

Giving example. explain the central problem of ‘how to produce’.

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Discussion
5884.

What is meant by marginal physical product (MPP) or marginal product ?

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Answer :MPP is an addition to the total physical PRODUCT when an additional unit of the FACTOR is EMPLOYED.
Discussion
5885.

The following movement in the demand curve is because of :

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INCREASE in PRICE of GIVEN commodity
Decrease in price of given commodity
Increase in price of SUBSTITUTE good
Decrease in price of COMPLEMENTARY good

Answer :A
Discussion
5886.

What is Market Demand curve?

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Solution :MARKET DEMAND CURVE of a good is the locus of points where each point represents the quantity of a good all buyers of that good are willing to buy at a given period of time, other THINGS being EQUAL.
Discussion
5887.

Explain why the budget line is downward sloping

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SOLUTION :The budget LINE is DOWNWARD sloping as more of one good can be BOUGHT by decreasing some units of the other good with the given MONEY income.
Discussion
5888.

Define Marginal Physical Product

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Solution :Marginal PHYSICAL Product is the change in output PRODUCED by employing one additional unit of the VARIABLE INPUT. It can be calculated as:
`MPP_(n) = (Delta TPP)/(Delta " Units of variable inpout")`
OR
`MPP_(n) = TPP_(n) - TPP_(n -1)`
Discussion
5889.

Explain the central Problems of: (i) What of Produce, (ii) How to Produce, (iii) For Whom to Produce.

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Discussion
5890.

What is the shape of TR curve under monopoly ?

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Solution :TR curve under monopoly starts from origin, increases at a diminishing RATE, reaches its maximum POINT and then FALLS.
Discussion
5891.

What would be shape of demand curve, so that TR curve is : (a) a positively sloped straight line passing through the origin, (b) a horizontal line ?

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Solution :(a)Demand CUVE or AR cuve will be a horizontal straight line parallel to the X - axis because POSITIVELY SLOPED straight line TR curve PASSING throught the origin indicates that price (or AR) remains constant at all levels of OUTPUT.
(b) Demand curve or AR curve will slope downwards from left to right because horizontal TR indicates that TR remains same at levels of output. It is possible only when price (or AR) falls with rise in output.
Discussion
5892.

Let the production function of a firm be : Q=2L^(2)K^(2). Find out the maximum possible output that the firm can produce with 5 units of L and 2 units of K. What is the maximum possible output that the firm can produce with zero unit of L and 10 units of K ?

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Solution :Maximum POSSIBLE OUTPUT with 5 units of L and 2 units of K
Given : `Q=2L^(2)K^(2)` and `L=5` units,`K=2` units
PUTTING the VALUES of L and K in the given production FUNCTION, we get :
`Q=2(5)^(2) (2)^(2) =200` units
Maximum possible output with 0 unit of L and 10 units of K
Given : `Q=2L^(2)K^(2)` and `L=0` unit, `K=10` units
Putting the values of L and K in the given production function, we get:
`Q=2(0)^(2) (10)^(2)=0` unit.
Discussion
5893.

Will a profit maximising firm in a competitive market produce a positive level of output in the short run if market price is less than the minimum of AVC ? Give an explanation.

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SOLUTION :No, a firm will not operate if market price is LESS than the MINIMUM of AVC. It is because if market price = AVC, it is the SHUT down POINT.
Discussion
5894.

When does a PPF shift to the right ?

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SOLUTION :(i) INCREASE in resources, (II) TECHNOLOGICAL upgradation.
Discussion
5895.

…................ Completes the information in the title of the table. (Head note/Caption)

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SOLUTION :HEAD NOTE
Discussion
5896.

What is break even point ?

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Solution :It is the point at which TOTAL cost and total revenue are equal, i.e. "EVEN". There is no net loss or gain, and one has "broken even", though opportunity costs have been paid and CAPITAL has received the risk-adjusted, EXPECTED return.
Discussion
5897.

What do you mean by extension in supply?

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Solution :It MEANS a rise in the quantity supplied due to increase in PRICE, ASSUMING other factors CONSTANT.
Discussion
5898.

Define wholesale price index.

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SOLUTION :The wholesaleprice index MEASURES the RELATIVE CHANGES in the prices of commodities traded in the wholesale markets.
Discussion
5899.

Any statement about demand for a good is considered complete only when the following is/are mentioned in it (Choose the correct alternative) :

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PRICE of the good
Quantity of the good
Period of time
All of the above

Answer :D
Discussion
5900.

Market for a good is in equilibrium. There is simultaneous increase demand and supply of the good. Explain its effect on market price.

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Solution :There are three possibilities.
(i) If the RELATIVE (percentage) increase in demand is greater thanthe increase in supply, price will rise.The price will rise because of excess supply in MARKET.
(II) If the relative (percentage ) increase in demand is less than the increase in supply, price will fall. The price will fall because of excess supply in market.
(iii) If the relative ( percentage) increasein demand is EQUAL to the increase in supply, price will remain unchanged. The price will remain unchanged because there is neither excess demand nor excess supply in the market.
Discussion