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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 5901. |
Average pocket allowance of 6 students is Rs. 45. Of these, pocket allowance of 5 students is20, 30, 22, 24 and32 respectively. What is the pocket allowance of the sixth student? |
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Answer» |
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| 5902. |
What happends to marginal utility, when the totally utility is maximum ? |
| Answer» SOLUTION :MARGINAL UTILITY is ZERO. | |
| 5903. |
A consumer consumes only two goods A and B and is in equilicbrium . Price of good a falls . Show that it will lead to rise in dmand for good A . UseUtility Analysis. |
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Answer» <P> Solution :When consumer is in EQUILIBRIUM :`(MU_(A))/(P_(A))=(MU_(B))/(P_B)` When price of good A`(P_(A))` FALLS , then `(MU_(A))/(P_(A))gt(MU_(B))/(P_B)` Since per rupee marginal utility of A `(MU_(A))` is now higher than per rupee `MU_(B)` , the consumer will divert expenditure from good B to good A. This raises demand for good A. |
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| 5904. |
State the two conditionsof producer's equilibrium under perfect competition ? ""Or What are the conditions of profit maximisation for a competitivefirm ? |
| Answer» SOLUTION :When MR=MC and MR CUTS MC from below. | |
| 5905. |
Draw average total cost and marnginal cost in a single diagram. Also explain the relation between marginal cost and average total cost with the help of a diagram. |
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| 5906. |
What happens to the budget set if both the prices as well as the income double ? |
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Answer» Solution :There will be no change in the budget set. In the EXAMPLE given in question 4, the budget LINE is represented by the equation: `4 X + 5 y = 20`. If prices as well as the income double, then new budget line will be: `8 x + 10 y = 40` `rArr 2(4x + 5y) = 2 (20)` `rArr 4 x + 5y = 20` Therefore, there will be no change in the budget set and set and the budget line. |
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| 5907. |
According to th Law of Diminishing Marginal Utility, as the consumer reduces consumption of a goods marginal utility of the remaining quantity of that good : |
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Answer» Falls |
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| 5908. |
Explain the implication of 'perfect knowledge about market' under perfect competition. |
| Answer» SOLUTION : PERFECT knowledge among buyers and sellers: Perfect knowledge means that both buyers and sellers are fully informed about the market price. Its implication is that no firm is in a position to charge a different price and no buyer will PAY a higher price. As a result a UNIFORM price prevails in the market. | |
| 5909. |
Total revenue curve always starts from the origin. |
| Answer» Solution :TRUE : Total REVENUE curve STARTS from the origin as it is zero at zero LEVEL of output. | |
| 5910. |
On the basis of given diagram, answer the following questions : (i) Indicate, whether price will fall or remain same with rise in output. (ii) What does the shaded are OPRQ indicate ? (iii) What will be the nature of MR curve ? |
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Answer» Solution :(i) Perfectly elastic demand curve in the given DIAGRAM indicates that price will remain same at all OUTPUT LEVELS. (ii) The SHADED are OPRQ indicates TR as AREA under Price line (AR curve) is equal to TR. (iii) MR curve will coincide with AR curve, i.e. both AR and MR curves coincide in a horizontal straight line parallel to the X-axis. 
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| 5911. |
How does average fixed cost behaves as output is increased? |
| Answer» Solution :Average total cost is greater than average variable cost because ATC is the sum of average fixed cost and average variable,while average variable cost(AVC) is a FIRM's variable costs(LABOR, electricity, ETC.) DIVIDED by the quantity (Q) of output produced.Variable costs are those costs which vary with output. | |
| 5912. |
A supply curve cutting quantity axis in its positive range has highly elastic supply. |
| Answer» SOLUTION :False. The supply CURVE, which cuts quantity axis (X-axis) in its POSITIVE range has inelastic supply asin this case, the supply curve tends to be vertical or parallel to y- axisSo , no matter how much price CHANGES , the quantity will not GET affected. | |
| 5913. |
What will happen if the price prevailing in the market is: (i) above the equilibrium price? (ii) below the equilibrium price? |
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Answer» Solution :(i) If the market PRICE is above the equilibrium price, then there will be a SITUATION of Excess SUPPLY in the market. (II) If the market price is below the equilibrium price, then there will be a situation of Excess Demand in the market. |
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| 5914. |
What is budget line ? Why is it downward sloping |
| Answer» Solution :Budget line is a graphical representation of all possible combinations of two goods which can be purchased with GIVEN income and prices, such that the cost of each of these combinations is equal to the money income of the consumer. The budget line is a negatively downward slopping line. The slope of a budget line measures the AMOUNT of good 2 that must be sacrificed in ORDER to GET an additional UNIT of good 1, as the conusmer income (M) is fixed. | |
| 5915. |
Whai is likely to be the impact of efforts towards reducing unemployment on the production potential of the economy? Explain. |
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Answer» Solution :Peducing unemployment has no EFFECT on the production POTENTIAL of the COUNTRY. It is because peoduction potential is determined sassuming full EMPLOYMENT. Unemployment INDICATED that the country is operating below potential. Reducing unemployment simply helps in reaching potential. |
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| 5916. |
There si inverse relation between price and demand for the product of a firm under: |
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Answer» MONOPOLY COMPETITION only |
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| 5917. |
Define demand schedule |
| Answer» Solution :DEMAND schedule is a TABULAR representation of the negative relationship between PRICE and quantity of a commodity, other things being equal. It shows different coomodities that will be demanded at different PRICES by an individual. | |
| 5918. |
In which market form are goods sold at a uniform price? |
| Answer» SOLUTION :The NUMBER of FIRMS in the INDUSTRY will INCREASE. | |
| 5919. |
Explain "freedom and entry and exist to forms in industry" feature for monopolist competition. |
| Answer» Solution :Under MONOPOLISTIC Competition, firms are free to enter into or EXIT from the industry at any time they wish. Free entry and exit of firms MEANS that there are no barriers before the firm for entering into the industry and leaving the industry. NEW firms can enter when they find that the existing firms are earning abnormal PROFITS. With their entry, output of the industry increases, which leads to fall in the price of the product. This continues till each firm is earning only normal profit. The existing firm leave when they face losses. As they leave, output of the industry goes down, raises the price of the product till the losses are wiped out. It ensures that there are neither abnormal profits nor any abnormal losses to a firm in the long run. | |
| 5920. |
The opportunity cost of a machine which can produce only one product is high. |
| Answer» Solution :The OPPORTUNITY COST of such MACHINERY will be zero as it has no ALTERNATIVE use. | |
| 5921. |
Identify positive or normative statements from the following : Equal distribution of income should make India poverty free |
| Answer» SOLUTION :NORMATIVE STATEMENT BECAUSEIT is ADVICE | |
| 5922. |
How is production possibility curve affected by unemployment in the economy? Explain. OR Explain how a production possibility curve is affected when resources are inefficiently employed in an economy. |
| Answer» Solution :Production POSSIBILITIES, which analyzes the ALTERNATIVE combinations of TWO goods that an economy can produce with GIVEN resources and technology, indicates unemployment when production is inside the production possibilities curve. Unemployment means resources that COULD be used for production are not being used. | |
| 5923. |
Giving reasons , state whether the following statements are true or false : (i)When there are diminishing returns to a factor, total product always decreases (ii)Total product will increase only when marginal product increases (iii)Increase in total product always indicates that there are increasing returns to a factor (iv)When there are diminishing returns to a factor, marginal and total product both always fall (vi)AP rises only when MP rises |
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Answer» (ii)False, TP ALSO increases when MP falls positively (III)False, TP also increases when there are diminishing returns to a factor. (iv)False, only MP falls but not TP under diminishing returns to a factor (v)False, AP rises as long as MP > AP. Here MP could be rising or falling |
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| 5924. |
Array' gives some order to data by placing the |
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Answer» Highest magnitude first followwed by other magnitudes in DESCENDING order |
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| 5925. |
What does a rightward shift of production possibility curve indicate? |
| Answer» SOLUTION :GROWTH of RESOURCES. | |
| 5926. |
Explain the concept of(MRS) with the help of a numerical example . Alsoexplain its behaviour along the Indifference Curve. |
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Answer» Solution :Marginal Rate of Substitution (MRS) MEANS the rate at which a consumer is willing to sacrifice QUANTITY ofone good to obtain one more unit of the other good. Let the two goods consumed be A and B . Suppose the following combinations of these two goods have same utility level for him : `{:("Good A","Good B","MRS"),(""1,""8,""-),(""2,""4," "4B:1A),(""3,""1," "3B:1A):}` The consumer is willing to sacrifice 4B to obtain second unitof A. Forthe third unit of A, he iswilling to sacrifice LESS because marginal utility of A decreases as he consumes more ofA. |
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| 5927. |
How many are the relative measures of dispersion? |
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Answer» SOLUTION :COEFFICIENT of Range Coefficient of QUARTILE Deviation Coefficient of MEAN deviation Coefficient of variation |
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| 5929. |
Price ceiling and support price are examplesd of |
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Answer» DIRECT INTERVENTION of govt. |
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| 5930. |
Which of the following is the objective of classification? |
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Answer» Simplification |
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| 5931. |
Following are the marks of 37 students: {:("Marks",4,6,8,10,12,14),("No. of Students",5,7,6,8,6,5):} Calculate mean marks, using Short-cut Method. |
Answer» Solution : `barX = A+(sumfd)/(SUM f)` `=10+(-38)/37` `=10-1.03 = 8.97` mean MARKS = `8.97`. |
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| 5932. |
In which form of market form, there is product differentiation? |
| Answer» SOLUTION :MONOPOLISTIC COMPETITION | |
| 5933. |
Explain frequency curve. |
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| 5934. |
When the demand for a good falls due to a rise in its own price, what is the change in demand called ? |
| Answer» SOLUTION :CONTRACTION in DEMAND | |
| 5935. |
Explain the outcome of the following features of a perfectly competitive market: (i) Freedom to the firms to enter the industry (ii) Freedom to the firms to leave the industry |
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Answer» SOLUTION :(i) Freedom to enter signifies that there are no barriers to the entry of new firms into industry.When the existing firms are earning super normal 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. The entry continues till firms is earning just the normal profits. (II) Freedom to leave 'signifies that 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 markets price and consequently reduction in losses. The firms continue to leave till the losses are wiped out and each existing firms is earning just the normal profits. |
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| 5936. |
What do you mean by 'monotonic preferences'? |
| Answer» Solution :Monotonic preferences IMPLY that a consumer always prefers the combination, which has either more of both goods or more of at least one good and no LESS of the other good as compared to another BUNDLE. | |
| 5937. |
When is a producer said to be in equilibrium ? |
| Answer» SOLUTION :A producer is SAID to be in equilibrium when he PRODUCES the level of output at which his profits are maximum. | |
| 5938. |
Marginal Utility : |
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Answer» Is ALWAYS POSITIVE |
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| 5939. |
Explain in brief, the various exceptions to law of demand OR Briefly discuss the various exceptions to law of demand OR Briefly discuss the various situations for positive relationship between price and quantity demanded. |
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Answer» Solution :(i) Giffen goods. (ii) STATUS SYMBOL goods or Goods for OSTENTATION. (iii) FEAR of shortage. (iv) Ignorance. (V) Fashion of related goods. (vi) Necessities of life. (vii) Change in weather. |
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| 5940. |
What is an open end series? |
| Answer» Solution :An OPEN END SERIES is that series in which lower LIMIT of the first CLASS interval and (or) the upper limit of last class interval is missing. | |
| 5941. |
What is the shape of unitary ealtic damand curve ? |
| Answer» SOLUTION :A UNITARY ELASTIC DEMAND curve is a rectangular HYPERBOLA. | |
| 5942. |
In what manner soes average revenus of a firm under perfect competition change as output increases ? |
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| 5943. |
If more is demanded at the same price or same quantity at a higher price, this fact of demand is known as : |
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Answer» EXTENSION of demand |
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| 5944. |
Give the meaning of producer's equilibrium. |
| Answer» Solution :Producer's Equilibrium: Equilibrium REFERS to a state of rest when no change is required. A firm (producer) is said to be in equilibrium when it has no inclination to expand or to contract its output. This state EITHER reflects MAXIMUM PROFITS or minimum losses. | |
| 5945. |
Distinguish between fixed costs and variable costs. Explain the relationship between marginal cost and average cost. |
| Answer» Solution :Variable costs vary with the amount produced. Fixed costs remain the same, no matter how much OUTPUT a COMPANY produces. A variable cost is a company's cost that is associated with the amount of GOODS or services it produces.On the other hand, a fixed cost does not vary with the volume of production.Average cost is obtained by dividing total cost by the number of units produced. MARGINAL cost is the cost of producing one ADDITIONAL unit of output. The total cost, in this reference, is the sum total of the total fixed cost plus total variable cost at a given level of output. | |
| 5946. |
To maximize the profits of a firm , the only condition needed is equality between marginal cost and marginal revenue. |
| Answer» Solution :PROFITS are maximized when two conditions are SATISFIED : (i) Marginal cost (MC) is equal to marginal REVENUE (MR) , and (ii) MC curve cuts the MR curve from below. | |
| 5947. |
The process of presenting data in the form of a table in called: |
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Answer» organisation |
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| 5948. |
What are the four alternative measures of absolute dispersion? Discuss their properties. |
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Answer» Solution :1. Range 2. QUARTILE DEVIATION. 3. MEAN Deviation. 4. Standard Deviation. |
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| 5949. |
Market demand curve is obtained by vertical summation of individual demand curves. |
| Answer» Solution :Market DEMAND CURVE is obtained by HORIZONTAL SUMMATION of individual demand curves. | |
| 5950. |
What happens to the difference between TC and TVC as output is increased? |
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