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6051.

Why is production possibility curve concave? Explain.

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Solution :Production Possibility CURVE is concave to the origin because of increasing marginal rate of transformation (MRT). i.e., more and more units of on commondity are sacrificed to gain an ADDITIONAL unit of another COMMODITY.
MRT increases because it is assumed that no resource is equally efficient in production of all goods As resources are transferred from one good to another, LESS and efficient resources have to be employed. This raises COST and rises MRT.
Discussion
6052.

give equation of Budget Line

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<P>

SOLUTION :`p_(1)x_(1) + p_(2)x_(2) = m`
Discussion
6053.

Economists say inconsistent things. They say ''as price falls, demand rises but as demand rises, price rises''. Defend or Refute.

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Solution :The statement is defended. It is the cause and effect relationship between two concerned variables price i.e., if price falls, its DEMAND rises or EXPANDS.
2. Cause and effect relation between Price and Demand and supply. Price of a COMMODITY is DETERMINED by its demand and supply. If demand of a commodity rises, the EXCESS demand (supply remaining unchanged) will create competition among buyers and push the price up and the price rises. Hence the statement is defended.
Discussion
6054.

Give the various reasons for shift in production possibility curve.

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Solution :1. Occurrences that may SHIFT it rightward may include, but are not limited to, population growth (more educated people to produce more of both GOODS on the axes) and technological improvements (which can help boost the productivity of the workforce).2. Natural disasters may cause leftward shifts of the curve by reducing the productive capabilities of the economy. Of course, there are other things such as economic crises that could lead to an overall reduction in the PRODUCTION of goods and SERVICES.
Discussion
6055.

Explain the concept of production function.

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SOLUTION :Production function is the technological RELATIONSHIP which TELLS that maximum output can be produced from various combinations of inputs.
Discussion
6056.

Why is AR always equal to MR for a perfectly competion firm ?

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SOLUTION :Because a firm, being a PRICE taker, can sell any amount of its PRODUCT at this price THEREFORE with the sale of its every additional unit, its MR=AR = Price.
Discussion
6057.

Show withthe help of a numericalexamplethataverage cost isconstantwhenmarginal cost isequal to it .

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SOLUTION :
Discussion
6058.

The rank of 8 same students in tests in Mathematics and Statistics were as follows : Calculate the coefficient of rank correlation.

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Solution :
`r_(K)=1-(6sumD^(2))/(N^(3)-N)`
Here , `N=8,sumD^(2)=40`
SUBSTITUTING the values, we get
`r_(k)=1-(6xx40)/((8)^(3)-8)=1-(240)/(512-8)=1-(240)/(504)=1-0.48=0.52`
Coefficient of Rank CORRELATION `(r_(k))=0.52`
Discussion
6059.

The following diagram correctly depicts the producer's equilibrium in case of constant prices:

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SOLUTION :N/a
Discussion
6060.

Give examples of 'Growth of resources'.

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Solution :(i) Inventions and innovations, (ii) Discovery of OIL RESERVES, (III) Increase in LABOUR force.
Discussion
6061.

What do you mean by an inferior good ? Give some examples

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SOLUTION :INFERIOR goods refers to those goods whose DEMAND DECREASES with an increase in INCOME. For example : If demand of 'Toned Milk' decreases with increase in income, then Toned Milk' is an inferior good.
Discussion
6062.

On the basic of data in Example of Section 9.5 of Chapter 9 ,calculate the value of coefficient of Quartile Deviation.

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SOLUTION :`V_(Q) = (Q_(3) - Q_(1))/(Q_(3) + Q_(1)) = (359.375 - 154.170)/(359.375 + 154.170) = (205.205)/(513.545) = 0.40` (or 40%)
Discussion
6063.

Explain the meaning of opportunity cost with an example

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SOLUTION :“opportunity cost” of a resource, means the value of the next-highest-valued alternative use of that resource. If, for example, you SPEND time and money going to a movie, you cannot spend that time at home reading a book, and you can't spend the money on something ELSE.
Discussion
6064.

Derive MU from the total utility (TU) schedule given below: {:("Units",1,2,3,4,5,6,),(TU,4,7,9,10,10,8,):}

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SOLUTION :MU: 4,3,2,1,0,-2
Discussion
6065.

Can there be some fixed cost in the long run? If not, why?

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SOLUTION :Fixed cost can EXIST only in short RUN. In the long run, all COSTS become VARIABLE. Hence, there can be no fixed cost in the long run.
Discussion
6066.

Identify positive or normative statements from the following : Government should be concerned with how to reduce unemployment

Answer»

SOLUTION :NORMATIVE STATEMENTS
Discussion
6067.

Law of Demand states the ______ relationship between price of quantity demanded.

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Inverse
Positive
Proportional
None of these

Answer :A
Discussion
6068.

Price elasticity of supply measure shows :

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RESPONSE of SUPPLY to change in price
Response of price to change in supply
The rate at which supply responds to one PERCENT change in price.
The rate at which price responds to one percent change in supply.

Answer :C
Discussion
6069.

At a certain output level, the total revenue and total cost of a firm a equal. What is this situation termed as? Whether the firm is earning normal profits or not.

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Solution :The SITUATION when TOTAL REVENUE is equal to total cost is TERMED as Breack-even Point. YES, the firm is earning profits as normal profit is that amount which is included in total cost.
Discussion
6070.

There are twogoods X and Y. Both are being sold at the same price but the quantities sold are not known. In this situation :

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We cannot CALCULATE SIMPLE aritmetic MEAN of prices.
We cannot calculate weighted aritmetic mean of prices.
We can calculate both and both will be EQUAL.
We calculate both and both will be unequal.

Solution :C
Discussion
6071.

If the demand for good Y increases as the price of good X increases, how are the two goods related ?

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SOLUTION :GOODS X and Y are SUBSTITUTE to each other.
Discussion
6072.

In 'more than' ogive we begin from lower limit of the first class interval (True / False)

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SOLUTION :TRUE
Discussion
6073.

Derive the law of demand from the single commodity equilibrium condition ''Marginal utility = Price''. OR Derive the inverse relation between price of a good and its demand from the single commodity equilibrium condition 'Marginal utility = Price'.

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Solution :According to single commodity equilibrium condition, consumer purchases that MUCH quantity of a good at which marginal utility (MU) is EQUAL to price. Given, MU = price. Now suppose, price falls. It will make MU GREATER than the price and will encourage the consumer to BUY more. It shows that when price falls demand RISES.
Discussion
6074.

Amit wants to purchase two goods which are available in integer units only. If his income is Rs 40 and both the goods and priced at Rs 10 each, then write the bundles which cost exactly Rs 40.

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SOLUTION :(0,4),(1,3),(2,2),(3,1) and (4,0)
Discussion
6075.

Can r lies outside the -1 and 1 range depending on the type of data ?

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SOLUTION :No. When r LIES outside the range -1 and 1 , it only INDICATES error in calculation.
Discussion
6076.

Calculate average of the following discrete series. Use Short-cut Method by taking 25 as assmed average. {:("Size",30,29,28,27,26,25,24,23,22,21),("Frequency (f)",2,4,5,3,2,7,1,4,5,7):}

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ANSWER :AVERAGE = 24.925
Discussion
6077.

Discuss the relationship between TR and MR when: Price remains same at all level of output (ii) Price falls with rise in output

Answer»
Discussion
6078.

Comment upon the shape of the demand curve if the price of a commodity rises by 10% and there is no change in its quantity demanded.

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SOLUTION :Demand curve will be parallel to the Y axis as there is no change in QUANTITY DEMANDED DUE to RISE in the price of the commodity.
Discussion
6079.

Graphs are always drawn with reference to :

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scale
origin
both (a) and (B)
NONE of these

Solution :A
Discussion
6080.

Why MP curve curs AP curve at maximum point ?

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ANSWER :It happens because when AP rises, MP is more than AP. When AP falls, MP is LESS than AP so, when AP is constant and at its MAXIMUM point MP is equal to AP. THEREFORE, MP curve cuts AP curve at its maximum point.
Discussion
6081.

A consumer consumers only two goods X and Y whose prices are Rs 5 and Rs 4 per unit respectively. If MU_(Y) = 16 at the point of consumer's equilibrium, calculate MU_(X).

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<P>

Solution :A CONSUMER in consumption of two commodities is at equilibrium when, `(MU_(X))/(P_(X)) = (MU_(Y))/(P_(Y))`
Putting the GIVEN values in the equilibrium condition :
`(MU_(X))/(5) = (16)/(4)`
`(MU_(X))/(5) = 4`
`MU_(X) = 20`
Discussion
6082.

Name the characteristic which makes monopolistic competition different from perfect competition,

Answer»

SOLUTION :FIRMS PRODUCE DIFFERENTIATED PRODUCTS.
Discussion
6083.

Area under marginal cost curve is

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TVC
TFC
AFC
AVC

Answer :A
Discussion
6084.

What are the sources of data?

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Solution :There are TWO sources of data:
(i) Primary source of data , which implies collected of data from its source of ORIGIN. It OFFERS you first-hand quantitative information relating to your statistical study.
(ii) SECONDARY source of data, which implies collected of data from some agency or INSTITUTION which already happens to have collected the data through statistical survey.
Discussion
6085.

Which of the following does not cause shift of suppply curve of a good? (Choose the correct alternative)

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PRICE of input
Price of the GOOD
Goods and SERVICES Tax
Subsidy

Solution :Price of the good.
Discussion
6086.

A firm is a price take under :

Answer»

PERFECT competition
OLIGOPOLY
monopolistic competition
monopoly

ANSWER :A
Discussion
6087.

Define quartile.

Answer»

Solution : If a statistical series is DIVIDED is into FOUR equal PARTS , the end VALUE of each part is called a QUARTILE . It written as Q.
Discussion
6088.

Equilibrium price of an essential medicine is too high. Explain what possible steps can be taken to bring down the equilibrium pirce but only through the market force. Also explain the series of changes that will occur in the market.

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Solution :As medicine is an ESSENTIAL GOOD, its demand will be perfectly inelastic.
Equilibrium price determined with market forcesof demand and supply is too HIGH.
Increase in price will not cause fall in its demand as it is an essential, so government should increase its supply. To increase its supply, the governement should
reduce taxes or
provide subsidy
Due to increase in the supply curve shifts to tis right and the new equilibrium point is

determined at point `E_(1)`.
It causes fall in equilibrium price from OP to `OP_(1)` and no change in equilbrium quantity (OM) as it is an essential good.
Discussion
6089.

What will likely be the impact of large scale outflow of foreign capital of production possibilities curve of the economy and why ?

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Solution :Large scale outflow of foreign capital from the economy will REDUCE resources and THUS PRODUCTION potential of the country will fall. Fall in production potential in turn will SHIFT the PP curve downwards.
Discussion
6090.

Define range.

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Solution :Range is the DIFFERENCE between the highest value and the LOWEST value in a SERIES. Thus,
Range = Highest value in the series - Lowest value in the series
Discussion
6091.

The sum of squared deviations of the items from the mean :

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is MAXIMUM
is minimum
is equal to the SUM of square of variables
is eqal to ZERO

SOLUTION :B
Discussion
6092.

Cost in Economics as compared to cost in business accounts is:

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Same
Narrower
Wider
Not comparable

Answer :C
Discussion
6093.

What is meant by tabulation? What are the main objectives of tabulation?

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SOLUTION :N/a
Discussion
6094.

What happens to the supply curve in case of an increase in supply?

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SOLUTION :SUPPLY Curve SHIFTS to the right INDICATING the increase in QUANTITY supplied as price increases.
Discussion
6095.

Explain 'black marketing' as a direct consequence of price ceiling.

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Solution :Black marketing may be termed as a DIRECT consequence of PRICE ceiling as it implies a situation where the COMMODITY under the government's control policy is illegally sold at a price higher than the one fixed by the government. It may primarily arise due to the presence of consumers who may be WILLING to pay higher price for the commodity than to GO without it.
Discussion
6096.

A rise in price of tea will lead to an upward movement in the demand curve of coffee.

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Solution :Rise in price of tea LEAD to a rightward shift in DEMAND curve of coffee as coffee will become RELATIVELY cheapter in comparison to tea.
Discussion
6097.

Which is the relative measure of dispersion?

Answer»

Range
MEAN deviation
Coefficient of standard deviation
NONE of these

SOLUTION :C
Discussion
6098.

What is the effect on price when a monopoly firm tries to sell more ?

Answer»
Discussion
6099.

Whien two variables change in a constant proportion, it is called :

Answer»

LINEAR correlation
non-linear correlation
partial correlation
none of these

Solution :A
Discussion
6100.

Range is estimated as the ………………………. Of highest and lowest values of the series. (difference/multiplicatin)

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SOLUTION :DIFFERENCE
Discussion