7498 + Interview Questions in Economics in Class 11 Page 121 InterviewSolution

6001.	Define indifference curve/indifference map
Answer» Solution :An INDIFFERENCE map is a combination of indifference CURVES, which allows UNDERSTANDING how changes in the quantity or the type of goods may change consumption PATTERNS.

Discussion

6002.	Define market demand. State the law of demand and the assumptions behind it.
Answer» Solution :Market DEMAND refers to the quantity of a commodity that all consumers are willing and able to buy, at each possible price during a given period of time. The law of demand states the inverse RELATIONSHIP between price and quantity demanded of a given commodity given that all the OTHERS factors AFFECTING the demand of that commodity are constant. Assumptions of law of demand :- (i) Price of related GOODS do not change. (ii) Income of the consumer does not change. (iii) There is no expectation of change in price in the future. (iv) Tastes and prefernces of the consumer remain the same.

Discussion

6003.	What is meant by inclusive series?
Answer» Solution :An inclusive SERIES is that series which includes all ITEMS upto its UPPER LIMIT.

Discussion

6004.	What is the behaviour of (a) Average Fixed Cost and (b) Average Variable Cost as more and more unitsof a goodare produced ?
Answer» Solution :AFC falls, when OUTPUT is increased. Since, the Total FIXED Cost remains the same with changes in output, THEREFORE, AFC falls steadily with increase in output. AFC curve is downward sloping. As output RISES, the AVC first falls, reaches a minimum LEVEL and then begins to rise. Thus, AVC curve has a U-shape.

Discussion

6005.	In the following statement, take the number of letters in a word as items and number of times a word (of the same size) repeats itself as frequencies. Prepare a discreate series. "Success in the examination confers no absolute right to appointment unless government is satisfied after such an equiry as may be considered necessary that the candidate is suitable in all respects for appointment. "
Answer» Solution :Note the number of LETTERS in each WORD e.g., Success=7, in=2, the 3, examination=11, confers=7, no=2, absolute=8,right=5 , to =2, appointment=11, unless=6, government =10, is=2, satisfied=9,after=5,such=4, an=2, enquiry=7, as=2, may=3,be=2,considered=10,necessary=9, that=4, the =3, candidate=9, suitable=8,in=2,all=3,respects=8,for =3,appointment=11. Write these values as : 7,2,3,11,7,2,8,5,2,11,6,10,2,9,5,4,2,7,2,3,2,10,9,4,3,9,2,8,2,3,3,11. In these data, 2 is the SMALLEST value and 11 is the LARGEST value . So , we shall write,

Discussion

6006.	An indifference schedule represents various bundles that give __________ level of satisfaction
Answer» unequal equal zero none of these Solution :B

Discussion

6007.	If marginal Rate of Substitution is constantthroughout, the Indifference Curve will be :
Answer» PARALLEL to the x-axis Downward SLOPING concave Downward sloping convex Downward sloping STRAIGHT line Answer :D

Discussion

6008.	MR curve is parallel to X-axis because
Answer» PRICE FALLS price rises price fluctuates price REMAINS uniform Answer :D

Discussion

6009.	State any two features each of monopoly and monopolictic competition.
Answer» SOLUTION : The features of MONOPOLY are: 1) Single Seller: Under Monopoly, there is a single seller selling the product. As a result, the monopoly firm and industry are one and the same thing and MONOPOLIST has fall CONTROL over the supply and price of the product. However, there are large no. of buyers of monopoly product and no single buyer can influence the market price. 2) No close substitutes: The product by a monopolist has no close substitutes. So, the monopoly firm has no fear of competition from new or existing products. For example, there is no close substitutes of electricity services provided by TPDDL in some parts of Delhi. However, the product may have distant substitutes like inverter and generator.The features of Monopolistic Competition are as follows: 1) Large no. of Sellers: There are large no. of firms selling closely related, but not homogeneous products. Each firm acts independently and has a limited share of the market. So, an individual firm has limited control over the market price. Large no. of firms leads to competition in the market. 2) Product differentiation: Each firm is in a position to exercise some degree of monopoly through product differentiation. Product differentiation refers to differentiating the products on the basis of brand, size, color, shape, etc. The product of a firm is close, but not substitute of other firm.

Discussion

6010.	Explain the need for the measures of relative dispersion .
Answer» Solution :RELATIVE measures of dispersion are measures of the variance of a range of VALUES REGARDLESS of its UNIT of measure. This means that the spread of two ranges of values with different measures can be COMPARED directly with relative measures of dispersion.

Discussion

6011.	Distinguish bewtween perfect demand and perfectly inelastic demand. Draw diagrams also.
Answer» SOLUTION :N/a

Discussion

6012.	Coke when price of Pepsi increases
Answer» Answer :Demand CURVE shift TOWARDS right or the demand INCREASES

Discussion

6013.	Rank colleration is a superior method of analysis in case of _____________ distribution .
Answer» qualitative quantitative frequency NONE of these Solution :A

Discussion

6014.	A monopolist can fix both, the price of product and the quantity to be sold at that price. True or false. Give reason.
Answer» SOLUTION :False.A monopolist can FIX either or the QUANTITY. If he fixes the price, the quantity will be determined by the market. Ifhe fixes the quantity, the price will be determined by the market.

Discussion

6015.	When MR if falling but positive, TR will also the falling and positive True of False.
Answer» SOLUTION :The Statement is false. It is because when MR FALLS positively , TR RISES at diminishing rate.

Discussion

6016.	Why the problems of what, hwo and for whom to produce are known as central problems?
Answer» SOLUTION :These problems are known as CENTRAL problems because these are the most basic problems of an economy and all other problems revolve AROUND them.

Discussion

6017.	Marks secured by 42 students in economics are: {:("Marks",15,20,22,23,27,35,18),("Number of Students",8,4,7,3,8,7,5):} Find average marks.
Answer» ANSWER :AVERAGE MARKS = 23.2

Discussion

6018.	Utility :
Answer» DIFFERS from PERSON to person Differs from TIME to time Differs from PRODUCT to product All the these Answer :D

Discussion

6019.	If (MU_(X))/(P_(X)) gt (MU_(Y))/(P_(Y)), then to reach the equilbrium position, consumer should
Answer» STOP BUYING any commodity Buy both the commodities in equal quantity Buy more of X and less of Y Buy more of Y and less of X Answer :C

Discussion

6020.	Give consumers optimum condition in case of one good/two goods using utility approach
Answer» Solution :In case of one commodity, CONSUMER equilibrium occurs when MU(x)= Price of good x In case of 2 commodity,consumer equilibrium occurs when,MU(x)= MU(y) Law of diminishing marginal utility operates Exp, on commodity (x) + Exp. on commodity (y) = Money Income ( IMPLIED CONDITION)

Discussion

6021.	AVC can fall even when MC is rising, provided :
Answer» `MC LT AVC` `MC GT AVC` `MC = AVC` NONE of these Solution :N//A

Discussion

6022.	The coefficient of price elasticity of demand is generally negative. However, minus sign is ignored for the sake of convenience.
Answer» Solution :The coefficient of price ELASTICITY of demand is generally negative due to INVERSE relationship between price and quantity DEMANDED, so , it is often ignored igored as it is ALWAYS demand.

Discussion

6023.	Relation between price and demand is :
Answer» positive negative one to one no relationship Solution :B

Discussion

6024.	A firm is a price take under:
Answer» PerfectCompetition Oligopoly Monopolistic Competition Monopoly SOLUTION :A

Discussion

6025.	What is the basic reason for economic problem in all economies?
Answer» Solution :The BASIC REASON for ECONOMIC PROBLEM in all ECONOMIES in scarcity of resources.

Discussion

6026.	The index numbers are not the __________ statements."" (qualitative /quantitative )
Answer» ANSWER :QUALITATIVE

Discussion

6027.	A consumer buys 100 units of a good atâ‚¹5 per unit. The P.e_(D) is (-) 2 . At what price will he buy 180 units of the commodity ?
Answer» ANSWER :`3`

Discussion

6028.	Sampling method is suitable when the area of investigation is _________(small /large)
Answer» SOLUTION :LARGE

Discussion

6029.	If price elasticity of demand for a product is equal to one , what will be the nature of its demand curve ?
Answer» SOLUTION :Demand curve of a PRODUCT with UNITARY elastic demand is a RECTANGULAR HYPERBOLA.

Discussion

6030.	Deifine percentage bar diagram.
Answer» Solution :Percentage BAR diagrams are those diagrams which SHOW simultaneously, different PART of the values of a set of DATA in terms of percentages.

Discussion

6031.	Monopolistic competition consitutes:
Answer» SINGLE firm PRODUCING CLOSE subsitues Many firms producing close substitiutes Many firm producing differentiated substitutes Few firms producing differentiated substitutes Solution :N/a

Discussion

6032.	Distinguish between an inferior good and a normal good. Explain the effect of change in income on each, giving suitable examples.
Answer» Solution :NORMAL goods are those which have income effect positive i.e. when income of the consumer increases, the DEMAND for the commodity increases and vice-versa. Inferior goods are those which have income effect negative i.e as income of the consumer increases, the demand for the commodity falls and vice-versa.For example, TONED MILK and full cream milk. For a consumer toned milk is an inferior GOOD and full cream milk is a normal good. An increase in income of the consumer will induce the consumer to shift to full cream milk from toned milk. Similarly a fall in income will induce the consumer to consume less of full cream milk and shift to toned milk.

Discussion

6033.	For a developmental project, logs of wood and other building material have to ve carried to the upper floor of building under renovation by the labour. Alternatively elevators and lifts can do the job which one will you choose and why ?
Answer» Solution :I will CHOOSE the second alternative as it will save COST and time. It will be an EFFICIENT technique to undertake this TASK. Labour may be UTILISED for some other labour specific tasks.

Discussion

6034.	Sampling erros are related to the size of nature of the sample selected. (True/False)
Answer» ANSWER :TRUE

Discussion

6035.	give equation of Budget Set
Answer» <P> SOLUTION :`p_(1) x_(1) + p_(2) x_(2) le m`

Discussion

6036.	What causes an upward-movement along-the supply eurve of a commedity?
Answer» SOLUTION :An INCREASE in PRICE causes an upward movementalong the supply curve as the QUANTITY SUPPLIED tends to increase.

Discussion

6037.	Price ceiling is imposed to protect the interest of _______
Answer» SOLUTION :N/a

Discussion

6038.	How will MP react, when TP rises at a diminishing rate ?
Answer» SOLUTION :MP FALLS, but REMAINS POSITIVE.

Discussion

6039.	What is the meant by total cost ?
Answer» SOLUTION :TOTAL Cost is the total expenditure INCURRED by a firm on the factors of production REQUIRED for the production of a COMMODITY.

Discussion

6040.	As output increase the difference between average cost and average variable cost decreases.
Answer» SOLUTION :True. The difference between AVERAGE cost and average variable cost is due to average fixed cost. As output INCREASES, average fixed cost DECREASE. So, the difference between average cost and average variable cost DECREASES.

Discussion

6041.	When does 'change in quantity demanded' take place?
Answer» Solution :A CHANGE in QUANTITY demanded take place when the own PRICE of the commodity changes.

Discussion

6042.	What is meant by consumer's equilibrium ?
Answer» Solution :Consumer's EQUILIBRIUM REFERS to a SITUATION when a consumer is having maximum satisfaction with his LIMITED income and has no tendency to change his existing WAY of expenditure.

Discussion

6043.	Explain the significance of 'barriers to entry' feature of monopoly
Answer» Solution :There exist STRONG barriers to ENTRY of new FIRMS and exit of existing firms. As a result, monopoly firm can earn ABNORMAL profits and losses in the long run. These barriers may be due to legal restrictions LIKE licensing or patent rights or due to restrictions created by firms in the form of cartel.

Discussion

6044.	Explain the central problem of "for whom to produce" OR Explain the central problem of distribution in an economy.
Answer» Solution :The problem for whom to produce refers to selection of the category of PEOPLE who will ultimately consume the goods. Since RESOURCES are scarce in every economy, no SOCIETY can satisfy all the wants of its people. Thus, a problem of CHOICE arises.

Discussion

6045.	When equilibrium price is greater than market price, there will be excess supply in the market.
Answer» SOLUTION :When market price is lower than the equilibrium price, market DEMAND will be higher than market SUPPLY LEADING to excess demand.

Discussion

6046.	Both AP and MP curves are generally :
Answer» U-shaped Inversely U-shaped Rising Falling Answer :B

Discussion

6047.	What is a simple table?
Answer» Solution :A simple table is that which SHOWS only ONE CHARACTERISTIC of the DATA.

Discussion

6048.	False base line is used when there is big difference between the smallest value and _________.(highest value/zero)
Answer» SOLUTION :ZERO

Discussion

6049.	Explain the concept of production function
Answer» Solution :PRODUCTION function refers to the FUNCTIONAL relationship between INPUTS and outputs.

Discussion

6050.	Price Elasticity of Demand of two goods A and B is (-) 3 and (-) 4 respectively. Good A has higer elasticity.
Answer» Solution :B is more elastic because 1% fall (rise) in price will LEAD to higher PERCENT rise (fall) in DEMAND.

Discussion

Explore topic-wise InterviewSolutions in .

Define indifference curve/indifference map

Define market demand. State the law of demand and the assumptions behind it.

What is meant by inclusive series?

What is the behaviour of (a) Average Fixed Cost and (b) Average Variable Cost as more and more unitsof a goodare produced ?

An indifference schedule represents various bundles that give __________ level of satisfaction

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

MR curve is parallel to X-axis because

State any two features each of monopoly and monopolictic competition.

Explain the need for the measures of relative dispersion .

Distinguish bewtween perfect demand and perfectly inelastic demand. Draw diagrams also.

Coke when price of Pepsi increases

Rank colleration is a superior method of analysis in case of _____________ distribution .

A monopolist can fix both, the price of product and the quantity to be sold at that price. True or false. Give reason.

When MR if falling but positive, TR will also the falling and positive True of False.

Why the problems of what, hwo and for whom to produce are known as central problems?

Marks secured by 42 students in economics are: {:("Marks",15,20,22,23,27,35,18),("Number of Students",8,4,7,3,8,7,5):} Find average marks.

Utility :

If (MU_(X))/(P_(X)) gt (MU_(Y))/(P_(Y)), then to reach the equilbrium position, consumer should

Give consumers optimum condition in case of one good/two goods using utility approach

AVC can fall even when MC is rising, provided :

The coefficient of price elasticity of demand is generally negative. However, minus sign is ignored for the sake of convenience.

Relation between price and demand is :

A firm is a price take under:

What is the basic reason for economic problem in all economies?

The index numbers are not the __________ statements."" (qualitative /quantitative )

A consumer buys 100 units of a good atâ‚¹5 per unit. The P.e_(D) is (-) 2 . At what price will he buy 180 units of the commodity ?

Sampling method is suitable when the area of investigation is _________(small /large)

If price elasticity of demand for a product is equal to one , what will be the nature of its demand curve ?

Deifine percentage bar diagram.

Monopolistic competition consitutes:

Distinguish between an inferior good and a normal good. Explain the effect of change in income on each, giving suitable examples.

For a developmental project, logs of wood and other building material have to ve carried to the upper floor of building under renovation by the labour. Alternatively elevators and lifts can do the job which one will you choose and why ?

Sampling erros are related to the size of nature of the sample selected. (True/False)

give equation of Budget Set

What causes an upward-movement along-the supply eurve of a commedity?

Price ceiling is imposed to protect the interest of _______

How will MP react, when TP rises at a diminishing rate ?

What is the meant by total cost ?

As output increase the difference between average cost and average variable cost decreases.

When does 'change in quantity demanded' take place?

What is meant by consumer's equilibrium ?

Explain the significance of 'barriers to entry' feature of monopoly

Explain the central problem of "for whom to produce" OR Explain the central problem of distribution in an economy.

When equilibrium price is greater than market price, there will be excess supply in the market.

Both AP and MP curves are generally :

What is a simple table?

False base line is used when there is big difference between the smallest value and _________.(highest value/zero)

Explain the concept of production function

Price Elasticity of Demand of two goods A and B is (-) 3 and (-) 4 respectively. Good A has higer elasticity.