7498 + Interview Questions in Economics in Class 11 Page 126 InterviewSolution

6251.	Define convenience sampling.
Answer» Solution :In convenience SAMPLING, sampling is DONE by the investigator in such a MANNER that suits his convenience.

Discussion

6252.	The rotation of budget line in the following diagram is due to:
Answer» DECREASE in PRICE of Apples Increase in price of Apples Increase in price of Bananas Decrease in price of Bananas Answer :A

Discussion

6253.	Which one of the following statements is incorrect:
Answer» Higher numerical value of elasticity INDICATES larger effect of a PRICE change on the quantity demanded. Elasticirty of DEMAND can vary only between -1 and +1. The demand curves for all commodities which have unitary elastic demand will be rectangular hyperbola. Elasticity of demand establishes a QUANTITATIVE relationship between quantity demanded of a commodity and its price. While other factors remain constant. Solution :N/a

Discussion

6254.	What are the shapes of AR and MR curves, when each unit is sold at the same price. ?
Answer» Solution :When PRICE is same at all the OUTPUT levels, the price/AR curve COINCIDES with the MR curve. The curve will be a horizontal STRAIGHT line PARALLEL to the X-axis.

Discussion

6255.	What is meant by averge variable cost (AVC) ? Why is AVC curve U-shaped ?
Answer» Solution :The average VARIABLE cost (AVC) is the TOTAL variable cost per unit of output. This is found by dividing total variable cost (TVC) by total output (Q). Total variable cost (TVC) is all the costs that vary with output, such as materials and labor.The average cost is U-shaped because an increase in output increases the RETURNS and reduces the total cost. As the curve continues to SLOPE downwards, it ENTERS a phase of constant returns where the returns and output are at their optimum level. .

Discussion

6256.	Find the mode from the following series : What is special in this question? Can you solve this question orally? If yes, how ? (Hint: See 8.8)
Answer» ANSWER :30

Discussion

6257.	Demand curve under monopolistic competition is
Answer» more ELASTIC as COMPARED to monopoly unitary elastic PERFECTLY elastic perfectly inelastic. Answer :A

Discussion

6258.	what is price elasticity of demand on the following demand curves: (i)Straight line parallel to X-axis (ii) straight line parallel to Y-axis.
Answer» SOLUTION :

Discussion

6259.	Price Floor can also be described as:
Answer» MINIMUM SUPPORT PRICE Minimum price above the equilibrium price Price at which quantity SUPPLIED EXCEEDS the quantity demanded All of these Answer :(d)

Discussion

6260.	Which of the following is a cause of economic problem?
Answer» Scarcity of Resources Unlimited WANTS Alternative Uses All of these Solution :D. Central problems of an economy arise due to the following reasons :(a) Limited or Scarce Resources: Resources are scarce in relation to our wants and economy cannot produce all what people want. It is the principal reason for existence of economic problems in all ECONOMIES.(B) Alternative uses: Resources can be put to alternative uses. For example, land is used not only for the production of crops but also for construction buildings and factories. As a result, the economy has to make a choice between the alternative uses of the given resources.(c) Unlimited wants: Human wants are unlimited in number. They are never-ending and they can never be FULLY satisfied.

Discussion

6261.	What is minimum price ceiling. Explain its implications.
Answer» SOLUTION :N/a

Discussion

6262.	Under monopoly price elasticity of demand is:
Answer» LESS than one Equal to one Greater than one Inifinity Solution :N/a

Discussion

6263.	Name any four determinants of individual demand
Answer» Solution :(i) Price of the COMMODITY (ii) Price of related goods (iii) INCOME of an individual (iv) TASTES and PREFERENCES of an individual

Discussion

6264.	What is the relation between market price and marginal revenue of a price-taking firm ?
Answer» SOLUTION :Market price is equal to MARGINAL revenue (MR). It happens because the price-taking firm can SELL more QUANTITY of OUTPUT at the same price. It means, revenue from every additional unit (MR) is equal to price or average revenue (AR) as Price = AR.

Discussion

6265.	Which of the following is an economic activity ?
Answer» Production Consumption Distribution All of these Solution :D

Discussion

6266.	Price floor is fixed to protect the interest of
Answer» consumers government producers NONE of these Solution :N/a

Discussion

6267.	The total expenditure to be incurred by a family on a good is bound to increase when price of such good rises. Comment.
Answer» Solution :The given statement is not correct. As the price rises, the total EXPENDITURE by the family may either increase, decrease or remain same depending upon elastically of DEMAND: (i) In case of less elastic demand, spending will increase if the price rises (like in case of necessity goods such as salt, medicines, etc.). (II) In case of highly elastic demand, spending will decrease if the price rises (like in case of luxury goods such as AC, Curved LED TV. etc.). (iii) In case of unitary elastic demand, spending will not change with rise in price like in case of normal goods such as SCOOTER, refrigerator, etc.).

Discussion

6268.	Utility is directly linked with the usefulness of a commodity.
Answer» SOLUTION :A commodity may not be useful, yet it may have utility for a PARTICULAR PERSON. For example, chewing tobacco is harmful for health, yet many people derive HIGH degree of utility from it.

Discussion

6269.	In the order of sequence, the points of 'Underutilisation' and 'Unattainable' are:
Answer» A and F F and E D and E E and F Solution :D.POINT E is being underutilized and Point F is UNATTAINABLE.

Discussion

6270.	has no control over price of his product.
Answer» Solution :An individual FIRM under perfect competition is a PRICE TAKER and has to accept the price fixed by the market forces of DEMAND and supply

Discussion

6271.	Demand of a commodity by a consumer falls by 10% as its price rises fromâ‚¹ 10 per unit toâ‚¹12 per unit. What is price elasticity of demand?
Answer» ANSWER :0.5

Discussion

6272.	The Indian Government imposed heavy taxes on commodity to reduce its consumption by the pubic such heavy taxes will decrease the deamand of the commodity only when:
Answer» `E_(d)=0` `E_(d) gt 1` `E_(d) LT 1` `E_(d)=1` SOLUTION :N/a

Discussion

6273.	How is the equilibrium price of a good determined? Explain with the help of diagram a situation when both demand and supply curves shift to the right but equilibrium price remains the same.
Answer»

Discussion

6274.	Explain why an indifference curve is convex to the origin ?
Answer» Solution :The indifference curves are convex to the origin because of the diminishing marginal rate of SUBSTITUTION. The MRS diminishes because of the decline in the marginal utility, which means with more and more CONSUMPTION of one commodity, the customerâ€™s utility starts declining and he is not willing to consume it more at the cost of the other commodity.For EXAMPLE, letâ€™s say there are two chocolates, dairy milk, and NESTLE, with more and more consumption of dairy milk chocolates the utility continues to decline, and the customer will no more give up the Nestle chocolates to BUY the dairy milk. Here, MRS shows the slope of the indifference curve.

Discussion

6275.	From the following data, compute Karl Pearson coefficient of correlation : Summation of product of deviation of X and Y series from their respective means is 46
Answer» Solution :We are given `N=7,bar(X)=4,bar(Y)=8,SUMX^(2)=28,sumy^(2)=76,sumxy=46` `r=(sumxy)/(sqrt(sumx^(2)xxsumy^(2)))` Substituting the values, we get `r=(46)/(sqrt(28xx76))=(46)/(sqrt(2,128))=(46)/(sqrt(46.13))=0.997` Coefficient of Correlation (r)=0.997

Discussion

6276.	Which of these is a normative economics:
Answer» 30% population of INDIA is below poverty line. Increase in FDI has increases GDP of India Govt. increased REPO rate of check inflation Equal distribution of income in India will SOLVE the problem of poverty. Solution :Equal distribution of income in India will solve the problem of poverty.

Discussion

6277.	When is the supply of a commodity called 'elastic'?
Answer» SOLUTION : When the percentage change in its SUPPLY is more than the percentage change in its price, i.e. when ELASTICITY of supply is GREATER than ONE.

Discussion

6278.	Explain price elasticity of demand
Answer» Solution :PRICE Elasticity of Demand MEANS the degree of responsiveness of demand for a commodity with REFERENCE to CHANGE in the price of such commodity. It is measured as: Price Elasticity of Demand `(E_(d))= ("percentatge change in Quantity DEMANDED")/("percentage Change in price")`

Discussion

6279.	When average product increases, the marginal product is :
Answer» LESS than AVERAGE product Equal to the average product More THA average product None of these Answer :C

Discussion

6280.	How is an economic problem, a choice-making activity ?
Answer» Solution :An economic PROBLEM is a choice-making activity because it requires a DECISION to MAKE the best possible USE of limited resources to satisfy unlimited HUMAN wants.

Discussion

6281.	Define non-viable industry.
Answer» Solution :It refers to an INDUSTRY in which the demand curve and SUPPLY curve NEVER intersect each other in the POSITIVE axis for the positive QUANTITY.

Discussion

6282.	Consider the following table {:("Production Possibilities",A,B,C,D,E),("Guns (Units)",0,1,2,3,4),("Butter(Units)",10,9,7,4,0):} If the above points A to E are depicated on a graph, then such PPF would be:
Answer» Convex to the origin Concave to the origin STRAIGHT line Rectangular hyperboal SOLUTION :B.

Discussion

6283.	Monopolistic Competition is competition with differentiated products? Explain
Answer» Solution :An important CHARACTERISTIC of MONOPOLISTIC competition is product differentiation. The competing firms produce products which are CLOSE but not perfect substitutes of each other. The products are DIFFERENTIATED on the BASIS of brand, size, colour, shape, etc. It is on account of this product differentiation, firms have to impur huge selling costs to complete with other firms. So, it is rightly said that 'Monopolistic Competition is compettion with diferentiated products'

Discussion

6284.	Equilibrium for a firm is determined when it :
Answer» EARNS MAXIMUM revenue maximises the difference between TR and TC maximises its cost None of these. Answer :B

Discussion

6285.	Freedom of entry and exit takes place in
Answer» SHORT RUN very short run LONG run all of these. Answer :C

Discussion

6286.	The price of a good falls from Rs. 6 to Rs. 5. As a result, supply by a firm falls by 600 units. If Es = 2 , find out the quantity suupplied at Rs. 6.
Answer» ANSWER :1800 UNITS

Discussion

6287.	Distinguish between a centrally planned economy and a market economy.
Answer» Solution :A centrally planned economy is an economic system in which the state or government makes economic decisions. Under a centrally planned economy, GOVERNMENTS own all of the factors of production such as land, capital, and resources, and government officials DETERMINE when, where and how much is produced at any one time. This is also SOMETIMES referred to as a "command economy."In a planned economy, the decision-making is centralized so the government controls all of the supply and sets all of the demand. Prices are set by government officials.Socialism and communism need a command economy to create a central plan that guides economic decisions.The examples of centrally planned economy are – China, North Korea, etcA market economy is a system where the laws of supply and demand direct the production of goods and services. Prices are fixed in a market economy on basis of the equilibrium of supply and demand.Consumer preferences and resource scarcity determine which goods are produced and in what quantity; the prices in a market economy act as SIGNALS to producers and consumers who use these price signals to help make decisions. Governments play a minor role in the direction of economic activity.A free market economy is an economy which the government plays a small role in.The two FUNDAMENTAL features of market economics are:1. Private ownership of the means of production2. Voluntary exchanges / contractsThe perfect example for market economy is United States of America.

Discussion

6288.	The distinction between short and long run is based on a fixed time period.
Answer» SOLUTION :False. It DEPENDS on production CONDITIONS and is not BASED on FIXED time period.

Discussion

6289.	Defice monopolistic competition.
Answer» Solution :It REFERS to a market SITUATION in which there are large NUMBER of firms which sell closely reated but DIFFERENTIATED products. Firms have partial CONTROL over price.

Discussion

6290.	Discuss various factors that affect price elasticity of demand .
Answer» Solution :Availability of Substitute Goods:If close substitutes for a particular good are available in the market, then the demand for the good would be relatively more elastic. For example, SINCE tea, a close substitute for coffee, is available in the market, a rise in the price of coffee would result in a considerable FALL in its demand and a consequent rise in the demand for tea.2. Price of the Good:The elasticity of demand for a good also depends on its own price. As price changes, quantity DEMANDED of the good changes, owing to the law of demand. Also, at different PRICES of the product, i.e., at different points on the demand curve for a good, the COEFFICIENT of price-elasticity of demand for the good would be different

Discussion

6291.	Define a PPC.
Answer» Solution :PPC is the locus of VARIOUS combinations of maximum production of two GOODS that can be produced with available technological and with GIVEN RESOURCES, assuming all resources are FULLY and efficiently utilised.

Discussion

6292.	When TR is constant MR is ________.
Answer» ANSWER :ZERO

Discussion

6293.	Marginal utlity can never be negative
Answer» SOLUTION :When consumption is INCREASED BEYOND the point of SATIETY (saturation point), the MARGINAL becomes negative

Discussion

6294.	AR curves under perfect competitionis a downwards sloping curve. Defendor refute. Give reason
Answer» Solution :The statement is refuted. In PERFECT competition more OUTPUT is sold at uniform price. HENCE AR curve is STRAIGHT line curve parallel to x-axis.

Discussion

6295.	Slope of demand curve will be infinity when degree of price elasticity of demand is infintiy. Defend or Refute.
Answer» Solution :The statement is REFUTED. `P.e_(D) = P/Qxx(DeltaQ)/(DeltaP)` and slope of demand curve = `(DeltaP)/(DeltaQ)` `P.e_(D)= P/Qxx 1/("Slope of DD curve")` or Slope of demand curve = ` P/Qxx1/(P.e_(D)` when `P.e_(D)=OO` Then slope of demand curve = `P/Qxx 1/oo= ` Zero when `P.e_(D) is oo` , slope of demand curve will be zero.

Discussion

6296.	Formula of standard deviation is:
Answer» `sigma=(SUM(X-X))/(N)` `sigma=sqrt((sum(X-X)^(2))/(N))` `sigma=sqrt((sum(X-X))/(N))` `sigma=sqrt((SUMX)/(N))` SOLUTION :B

Discussion

6297.	Define market equilibrium.
Answer» SOLUTION :It REFERS to the SITUATION when the QUANTITY demanded of a commodity becomes equal to the quantity SUPPLIED.

Discussion

6298.	Given total utility schedule of a good, how many units of tha good the consumer will buy if the price per unit is rupees 4 .
Answer» 1 unit 2 units 3 units 0 unit Answer :D

Discussion

6299.	Suppose the price elasticity of demand for a good is -0.2 if there is a 5% increase in the price of the good, by what percentage will the demand for the good go dowm ?
Answer» Solution :Given % Change (Rise)in price =5% Elasticity of Demand `(E_(d))= (-)0.2` Elasticirty of Demand `(E_(d))= ("PERCENTAGE Change in QUANTITY DEMANDED")/("Percentage Change in price ")` `(-) 0.2 = ("Percentage Change in QunatityDemanded")/5` Percentage fall in demand =1%

Discussion

6300.	Microeconomics is the study of:
Answer» A consumer An industry A producer All of these Solution :Microeconomics is the study of individuals, households and firms' behavior in decision making and allocation of RESOURCES. It generally applies to markets of goods and services and deals with INDIVIDUAL and ECONOMIC ISSUES.

Discussion

Explore topic-wise InterviewSolutions in .

Define convenience sampling.

The rotation of budget line in the following diagram is due to:

Which one of the following statements is incorrect:

What are the shapes of AR and MR curves, when each unit is sold at the same price. ?

What is meant by averge variable cost (AVC) ? Why is AVC curve U-shaped ?

Find the mode from the following series : What is special in this question? Can you solve this question orally? If yes, how ? (Hint: See 8.8)

Demand curve under monopolistic competition is

what is price elasticity of demand on the following demand curves: (i)Straight line parallel to X-axis (ii) straight line parallel to Y-axis.

Price Floor can also be described as:

Which of the following is a cause of economic problem?

What is minimum price ceiling. Explain its implications.

Under monopoly price elasticity of demand is:

Name any four determinants of individual demand

What is the relation between market price and marginal revenue of a price-taking firm ?

Which of the following is an economic activity ?

Price floor is fixed to protect the interest of

The total expenditure to be incurred by a family on a good is bound to increase when price of such good rises. Comment.

Utility is directly linked with the usefulness of a commodity.

In the order of sequence, the points of 'Underutilisation' and 'Unattainable' are:

has no control over price of his product.

Demand of a commodity by a consumer falls by 10% as its price rises fromâ‚¹ 10 per unit toâ‚¹12 per unit. What is price elasticity of demand?

The Indian Government imposed heavy taxes on commodity to reduce its consumption by the pubic such heavy taxes will decrease the deamand of the commodity only when:

How is the equilibrium price of a good determined? Explain with the help of diagram a situation when both demand and supply curves shift to the right but equilibrium price remains the same.

Explain why an indifference curve is convex to the origin ?

From the following data, compute Karl Pearson coefficient of correlation : Summation of product of deviation of X and Y series from their respective means is 46

Which of these is a normative economics:

When is the supply of a commodity called 'elastic'?

Explain price elasticity of demand

When average product increases, the marginal product is :

How is an economic problem, a choice-making activity ?

Define non-viable industry.

Consider the following table {:("Production Possibilities",A,B,C,D,E),("Guns (Units)",0,1,2,3,4),("Butter(Units)",10,9,7,4,0):} If the above points A to E are depicated on a graph, then such PPF would be:

Monopolistic Competition is competition with differentiated products? Explain

Equilibrium for a firm is determined when it :

Freedom of entry and exit takes place in

The price of a good falls from Rs. 6 to Rs. 5. As a result, supply by a firm falls by 600 units. If Es = 2 , find out the quantity suupplied at Rs. 6.

Distinguish between a centrally planned economy and a market economy.

The distinction between short and long run is based on a fixed time period.

Defice monopolistic competition.

Discuss various factors that affect price elasticity of demand .

Define a PPC.

When TR is constant MR is ________.

Marginal utlity can never be negative

AR curves under perfect competitionis a downwards sloping curve. Defendor refute. Give reason

Slope of demand curve will be infinity when degree of price elasticity of demand is infintiy. Defend or Refute.

Formula of standard deviation is:

Define market equilibrium.

Given total utility schedule of a good, how many units of tha good the consumer will buy if the price per unit is rupees 4 .

Suppose the price elasticity of demand for a good is -0.2 if there is a 5% increase in the price of the good, by what percentage will the demand for the good go dowm ?

Microeconomics is the study of: