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6451.

Explain the meaning of change in demand. How does it affect demand curve?

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Discussion
6452.

Explain the conditions of producer's equilibrium with the help of a numerical example.

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SOLUTION :N/a
Discussion
6453.

What is meant by economic problem ?

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Solution :Economic problem is a problem of CHOICE involving satisfaction of unlimited wants out of LIMITED resources having ALTERNATIVE uses.
Discussion
6454.

(a)What is the relation between average production and marginal production ? (b)What should be an ideal measure to determine wage rate of labour in a competitive economy

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Solution :(a) (i) AP rises as long as MP`gt`AP.
(ii) When MP is equal to AP, AP is at its maximum and constant.
(iii) When MP is less than AP, AP FALLS.
(b) In a competitive economy, when we need to minimise COST of production and improve overall efficiency, wage rate should be DETERMINED on the basis of work efficiency of an individual which ULTIMATELY can be measured by marginal production.
Discussion
6455.

The government has started promoting foregin capital. What is its economic value in the context of Production Possibilities Frontier?

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Solution :It will increases inflow of foregin capital. Its ECONOMIC value is the RISE in PRODUCTION potential DUE to increase in resources.
Discussion
6456.

Why is average curve of a firm

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SOLUTION :N/a
Discussion
6457.

Why is minimum wage legislation adopted by the government.

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Solution :Government fixes minimum wages of labour above the equilibrium RATE of wages which is determined by the free interaction between demand and supply forces. It is done with a view to PROTECT the interest of labour, since they do not have strong bargaining power. Therefore, government fixes minimum wage rate at a LEVEL higher than equilibrium level of wage rate. Minimum wage legislation is undertaken to ensure that wages paid to WORKERS do not FALL beyond a certain level. Hence in the labour market, a floor is set on wages i.e., wages are not allowed to fall beyond a certain level.
Discussion
6458.

Explain the meaning functioning of any economy?

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Solution :An economy is the large set of inter-related production and consumption activities that AID in determining how scarce resources are allocated. The production and consumption of goods and services are used to fulfill the needs of those living and operating WITHIN the economy, which is also REFERRED to as an economic SYSTEM.
Discussion
6459.

From the following table, calculate the coefficient of correlation by Karl Pearson's method: Arithmetic means of X and Y series are 6 and 8 respectively.

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Solution :Let us first and MISSING value of Y and let us denote it by a .
`bar(Y)=(sumY)/(N)=(9+11+a+8+7)/(5)=(35+a)/(5)`
`implies 8=(35+a)/(5)`
`:. 35+a=40`
`implies a=5`
Thus, the complete SERIES is :

Now we find the coefficient of correlation.

`R=(sumxy)/(sqrt(SUMX^(2)xxsumy^(2)))`
The table shows that ` sumxy=-26,sum x^(2)=40,sumy^(2)=20`
Substituting the values, we get
`r=(-26)/(sqrt(10xx20))`
`=(-26)/(sqrt(800))=(-26)/(28.28)`
`=-0.92`
Coefficient of Correlation (r)= -0.92
Discussion
6460.

What are the different phases in the Law of Variable Proportions in terms of Total Product ? Give reason behind each phase. Use diagram.

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Solution :The Phases are :
Phase I : TP rises at increasing rate, i.e. upto A.
Phase II : TP rises at decreasing rate, i.e. between A and B.
Phase III : TP falls i.e. after B.
Reasons :
Phase I : Initially variable is too small as compared to the fixed input, As production starts, there is efficient use of the fixed input, LEADING to rise in productivity of the variable input on ACCOUNT of DIVISION of labour. As a result, TP rises at increasing rate.
Phase II : After a level of output, pressure on fixed input leads to fall in productivity of the variable input. As a result, TP continues to rise but at a decreasing rate.
Phase III : The AMOUNT of variable input becomes too large in comparison to the fixed input causing decline in TP.
Discussion
6461.

Give meaning of 'retuns to a factor'.

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Solution :Returns to a FACTOR relate to the SHORT period production FUNCTION when one factor is varied KEEPING the other factor fixed in ORDER to have more output, the marginal returns of the Variable factor diminish.
Discussion
6462.

What is meant by monopoly? Discuss the features of monopoly

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Solution :Monopoly refers to a market situation where there is a single seller selling a product which has no close substitutes.For examples, Railways in India.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.3) Restrictions on entry and exit: 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 inthe 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,4) Price Discrimination: A monopolist may charge different prices for his product from different sets of consumers at the same time. It is known as ' Price Discrimination'.5) Price Maker: In case of monopoly, firm and industry are one and the same thing. So, firm has complete control over the industry OUTPUT. As a result, monopolist is a price maker and fixes its own price. It can influence the market price by changing the supply of the product.
Discussion
6463.

Production in an economy is below its potential due to unephloyment. Government starts employment generation schemes. Explain its effect using production possibilities curve. or As a result of various programmes started by the government, more employment opportunities have been created. What will be its effect on production possibilities frontier? Explain.

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Solution :PRODUCTION below the potential meansthat TOTAL production in the economy is somewhere below the production possiblility curve PP', for EXAMPLE at point U in the diagram.

When government starts employment generation schemes, and since the below potential production is due to UNEMPLOYMENT, the economy moves forward its attempt to remove unemployment and reach the potential. The movement forward is towards the PP' curve.
Discussion
6464.

In the following diagram, the situation of Consumer's Equilibrium and Point of Satiety are represented by the points:

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POINT C and Point E
Point E and Point B
Point B and Point E
Point B and Point C

Answer :B
Discussion
6465.

Explain, in brief, the various points of difference between fixed cost and variable cost.

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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.
Discussion
6466.

Under which market form a firm is called a 'price taker' and why?

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Solution :Perfect competition refers to a MARKET situation where there are very large no. of buyers and sellers dealing in a HOMOGENEOUS product at a price fixed by the market.The no. of sellers is so large that the SHARE of each seller is insignificant in the total supply. Hence, an individual seller cannot influence the market price. Similarly, a single buyer's share in total purchase is so insignificant because of their large no. that an individual buyer cannot influence the market price. Under such conditions, price of a commodity is DETERMINED by the market forces of demand and supply and each buyer and seller has to accept the same price. As a result, uniform price prevails in the market.
Discussion
6467.

State the distinction between explicit cost and implicit cost. Give an example of each.

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SOLUTION :Based on payment, costs are classified into two categories; they are Explicit Costs and Implicit Costs. Explicit Cost is the cost which is actually incurred by the ORGANIZATION, during production.Salaries, wages and rent are few of the examples of the explicit cost. On the other HAND, Implicit Cost, are just OPPOSITE to the explicit cost, as the organization does not directly incur them, but they are implied in nature which does not involve a cash payment. The former is an out of pocket cost, while the LATTER is an opportunity cost.Explicit Cost refers to the one paid to the factors outside the firm. the interest on owner's capital, or the salary to the owner are the prominent examples of the implicit cost. Conversely, Implicit Cost are the one that arise from using the asset rather than renting it out.
Discussion
6468.

Almost one-third of Indians consume some form of tobacco and many use more than one type of tobacco product. The consumption of tobacco is a reason for almost 40% of non-communicable diseases like cancer, cardiovascular diseases and lung disorders. What can be done to come out of this situation ?

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SOLUTION :`**` The most effective way to reduce tobacco use is to raise the price to tobacco through increase in taxes. Higher prices discourage YOUTH from intiating cigarette smoking and ENCOURAGE current smokers to quit.
`**` Tobacco users should be made fully aware of high risks of disease and premature death caused by tobacco use.
`**` Laws relating to RESTRICTION on smoking in public should be more strictly applied.
Discussion
6469.

In singular sense Statistics means :

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STATISTICAL science
statistical law
both (a) and (B)
NONE of these

Solution :C
Discussion
6470.

Explain 'Perfect knowledge about the markets' feature of perfect competition.

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Discussion
6471.

Explain the implications of the following in a perfectly competitive market {:((a)"Large number of sellers",(b)"Homogeneous products"):} Or Explain the implications of the following in an oligopoly market {:((a)"Barriers to entry of new firms",(b)"A few or few big sellers"):}

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Discussion
6472.

Only variable factors are used for production in the short period.

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SOLUTION :False. In the SHORT period, both VARIABLE and fixed factors are used for PRODUCTION.
Discussion
6473.

Calculate Karl Pearson's coefficient of correlation between the values of X and Y for the following data: Assume 69 and 112 as the mean values for X and Y respectively.

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SOLUTION :
`r=(sumdxdy-((sumdx) xx(sumdy))/(N))/(SQRT(sumdx^(2)=((sumdx)^(2))/(N))xx sqrt(sumdy^(2)-((sumdy)^(2))/(N)))`
`=(2,116-((47)xx(108))/(8))/(sqrt(1,475-((47)^(2))/(8))xxsqrt(3,468-((108)^(2))/(8)))`
`=(2,116-634.5)/(sqrt(1,475-276.125)xxsqrt(3,468-1,458))=(1,481.5)/(sqrt(1,198.875)xxsqrt(2,010))=(1,481.5)/(34.62xx44.83)=(1,481.5)/(1,552.0146)=0.955`
Coefficient of Correlation (r)=0.955
Discussion
6474.

Suppose a consumer wants to consume two goods which are available in integer units only. If the income of the consumer is Rs 20 and both the goods are equally priced at Rs 4, write the bundles which cost exactly Rs 20

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Solution :BUNDLES, which COST EXACTLY RS 20, are: `(0,5), (1,4), (2,3), (4,1), (5,0)`
Discussion
6475.

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):} The opportunity cost of increasing guns production form 2 to 3 units is ____ units of butter.

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7
2
7
3

Solution :D.
Discussion
6476.

Define variance.

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SOLUTION :Variance is ANOTHER measure of dispersion. Variance is the SQUARE of the standard DEVIATION. SYMBOLICALLY,
Variance`=(SD)^(2)=sigma^(2)`
Discussion
6477.

Underutilisation and unutilisation of resources will shift the Production Possibility Frontier to the left. Defend or refute.

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SOLUTION :The given statement is refused. Underutilisation and UNUTILISATION does not DECREASE the capacity of economy to PRODUCE. So, there will be shift of Production Possibility Frontier (PPF). However, economy will operate at some point INSIDE the PPF.
Discussion
6478.

What is meant by normal good in economics?

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Solution :Normal GOODS are the goods which have INCOME effect POSITIVE i.e as the income of the consumer increases the DEMAND for the commodity rises and vice-versa.
Discussion
6479.

Discuss the relationship between TVC and MC. OR Draw a diagram showing TVCin terms of the area under MC curve.

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Solution :we know, MC is ADDITION to TVC when ONE more unit of output is produced. So, TVC can be OBTAINED as addition of all or sumation of MC’s of all the UNITS produced. If output is assumed to be perfectly divisible, then total AREA under the MC curve will be equal to TVC.
Discussion
6480.

Average Product falls only when marginal product is less than average product.

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Solution :FALSE. Low of Variable Proportions operates in the short period and not in the LONG period as in the short period, a FIRM can not vary all the inputs, as some of the them REMAIN fixed. Under this law, output is increased by CHANGING only one input while keeping other inputs unchanged.
Discussion
6481.

As per determination of consumer's equilibrium theory, in order to arrive at consumer's equilibrium consumer can

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DECREASE the PRICE of the commodity
increase the price of the commodity
change the QUANTITIES of both the goods
increase the CONSUMPTION of both the goods

Solution :C
Discussion
6482.

What do you mean by homogenous product?

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Solution :HOMOGENEOUS product REFERS to a product which in all respects like quality, colour, size,design, brand NAME ETC.
Discussion
6483.

Individual supply curves are steeper as compared to market supply curve.

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Solution :True. It happens because with a change in PRICE, the PROPORTIONATE change in market supply is more than the proportionate change in INDIVIDUAL supply and hence , the price ELASTICITY of supply of market supply schedule is greater and thus the STEEPER the curve.
Discussion
6484.

What is the effect of unequal distribution of income on market demand of a commodity? Explain using a diagram. What is the implication of unequal distribution of income for the society?

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Solution :If there is unequal distribution of income, all sections of the society will not be able to DEMAND goods and SERVICES. Hence market demand of the commodity would fall and the demand CURVE will shift LEFTWARDS from DD to `D_(2)D_(2)`.

Unequal distribution of income implies inequality which is not socially DESIRABLE. It is against social justive and reduces economic and social welfare
Discussion
6485.

Define dispersion.

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Solution :DISPERSION is the MEASURE of the EXTENT to which different items tend to disperse away from the CENTRAL TENDENCY.
Discussion
6486.

In case of less elastic supply, supply curve:

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Makes an intercept on the postive X-axis
is a vortical STRAIGHT line parallel to the Y-axis
Makes an intercept on the positive Y-axis
s a horizontal straight line parallel to the X-axis

Solution :no change in PRICE , even then QUANTITY suplied is INCREASING. thus, SUPPLY curve makes an intercept on x-axis.
Discussion
6487.

Trendz produces both Jeans and Shirts. How will an increase in the price of jeans affect the supply curve of shirts?

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SOLUTION : An INCREASE in the price of JEANS will make the production of jeans more attractive. As a result, Trendz will shift its RESOURCES from shirts to jeans. It will shift the SUPPLY curve of shirts towards left.
Discussion
6488.

Economic problem arises due to

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scarcity of resources
UNLIMITED WANTS
resources can be put to ALTERNATIVES uses
all of these

Solution :Economic problem arises DUE toscarcity of resources,unlimited wants,resources can be put to alternatives uses .
Discussion
6489.

Wat is the general shape of MPP curve ?

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ANSWER :The GENERAL shape of MPP curve is INVERSE U
Discussion
6490.

What is the price elasticity of dmeand for following demand curves, : (i) Straight line demand curve parallel to X -axis, (ii) Straight line demand curve parallel toY-axis.

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Solution :The PRICE ELASTICITY of demand in the FOLLOWING CASES will be : (i) Perfectly Elastic Demand, (ii) perfectly lnelastic Demand.
Discussion
6491.

Define price floor. Explain the impications of price floor OR Market of a good is in equilibrium. Demand for the good 'decreases'. Explain the chain of effects of this change

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Solution :Price Floor' is the minimum price fixed by the government below which sellers cannot SELL their product. Since this price is normally set above the equilibrium price, there is excess supply in the market. As the SELLER may not be able to sell all that he wants to sell, he may ILLEGALLY attempt to sell the product at a price below the floor price.
OR
Market of a good is in equilibrium. If the demand for the good decreases, this creates an excess supply of the good at the existing price in the market.
`**` The excess supply creates competition among sellers, resulting in fall in price, because sellers will not be able to sell all that they want to sell at the existing price.
`**` Fall in price leads to RISE in demand and fall in supply.
`**` These changes continue TILL the market reached new equilibrium.
Discussion
6492.

What is economics all about ?

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SOLUTION :Ecomomics is all about MAKING CHOICES in the PRESENCE of SCARCITY.
Discussion
6493.

What are the Central Problem of an Economy?

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SOLUTION :(i) What to PRODUCE, (II) How to Produce, (III) For whom to produce.
Discussion
6494.

What is the behaviour of average fixed cost as output is increased ? Why is it so ?

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Solution :Average fixed cost is fixed cost per unit of output. As the TOTAL number of units of the GOOD produced increases, the average fixed cost DECREASES because the same amount of fixed costs is being spread over a LARGER number of units of output.
Discussion
6495.

A monopolist can sell any quantity he likes at a price.

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SOLUTION :A MONOPOLIST can sell more quantity only by LOWERING the price because the monopolist CONTROLS only the supply and not the DEMAND.
Discussion
6496.

What do you mean by average value?

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Solution :An AVERAGE VALUE refers to a central value or REPRESENTATIVE value of a STATISTICAL series.
Discussion
6497.

An increase in income will lead to the following change in Bundget Line :

Answer»




ANSWER :D
Discussion
6498.

Mention the four main merits of the sample method.

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Solution :1. Economical:It is economical, because we have not to collect all data. Instead of getting data from 5000 FARMERS, we get it from 50-100 only.2. Less Time Consuming:As no of UNITS is only a fraction of the total universe, time consumed is ALSO a fraction of total time. Number of units is considerably SMALL, hence the time.3. Reliable:If sample is taken judiciously, the RESULTS are very reliable and accurate.4. Organisational Convenience:As samples are taken and the number of units is smaller, the better (Trained) enumerators can be employed by the organisation.
Discussion
6499.

Production function estabilishes a relation between inputs and output, which is technical and not economical in nature.

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SOLUTION :True. Production function establishes only a technical RELATION between inputs and output. It is not economical in nature as we do not CONSIDER the VALUE of inputs and output.
Discussion
6500.

When is rank correlation method used ?

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SOLUTION :Rank CORRELATION method is used when variables are QUALITATIVE in nature, such as beauty, bravery, WISDOM, virtue etc.
Discussion