7498 + Interview Questions in Economics in Class 11 Page 132 InterviewSolution

6551.	Given values of elasticities of demand , spot ' elastic' demand :
Answer» `-0.8` `-0.9` `-1.0` `-11` ANSWER :d

Discussion

6552.	Distinguish between:(i)Variable factors and fixed factors(ii) Short run and long run
Answer» Solution :(i) Variable factors are the factors of production which vary with the level of OUTPUT. For example, Labour and Raw material. Fixed factors are the factors which remain fixed throughout the production PROCESS. For example, LAND and Machinery. (ii) Short RUN is a TIME period where some factors of production are fixed and some are variable whereas long run is a time period wherein all the factors of production are variable.

Discussion

6553.	A consumer consumes only two goods X and Y whose price are Rs 4 and Rs 5 per unit respectively. If the consumer choose a combination of the two goods with marginal utility of X equal to 5 and that of Y equal to 4, is the consumer in equilibrium ? Give reasons. what will a rational consumer do in this situation ? Use utility analysis.
Answer» Solution :Given `P_(x) = 4, P_(y) = 5 " and " MU_(x) = 5, MU_(y) = 4`. A consumer will be in equilibrium when `(MU_(x))/(P_(x)) = (MU_(y))/(P_(y))` Substituting values, we find that: `(5)/(4) gt (4)/(5) " or " (MU_(x))/(P_(x)) gt (MU_(y))/(P_(y))` Since per RUPEE `MU_(x)` is higher than per rupee `MU_(y)`, consumer is not in equilibrium. The consumer will buy more of `x` and less of `y`. As a RESULT `MU_(x)` will fall and `MU_(y)` will rise. The REACTION will CONTINUE TILL `(MU_(x))/(P_(x)) " and " (MU_(y))/(P_(y))` are equal and consumer is in equilibrium.

Discussion

6554.	How does the nature of a commodity influence its price elasticity of demand.
Answer» Solution :i. When a commodity is a necessity like food grains, vegetables, MEDICINES, etc., its demand is generally inelastic as it is required for human survival and its demand does not fluctuate much with CHANGE in price. ii. When a commodity is a comfort like FAN, refrigerator, etc., its demand is generally elastic as consumer can postpone it. (iii) When a commodity is a luxury like AC, DVD player, etc., its demand is generally more elastic as compared to demand for comforts. iv. The term ‘luxury’ is a relative term as any item (like AC), may be a luxury for a POOR person but a necessity for a RICH person. consumption.

Discussion

6555.	Calculate arithmetic mean of the following frequency distribution: {:("Class","less than 10",10-20,20-30,30-40,40-50,50-60,"more than 60"),("Frequency",""5," "12," "18," "22," "6," "4,""3):}
Answer» ANSWER :ARITHMETIC MEAN = 30. 14

Discussion

6556.	Distinguish between : (i) Movement along supply curve and Shift in supply curve (ii) Change in supplied and Change in supply (iii) Contraction in supply and Decrease in supply (iii) constraction in supply and Decrease in supply (iv) Expansion in supply and Increase in supply (v) Individual supply and Market Supply (vi) Individual Supply Curve and Market Supply Curve
Answer»

Discussion

6557.	Assumed mean is taken in which method?
Answer» DIRECT method Step-deviation method Karl PEARSON's method Spearman's method Answer :B

Discussion

6558.	What are the factors affecting elasticity of supply?
Answer» Solution :The factors AFFECTING elasticity of SUPPLY are LTBR. (i) Nature of the commodity. (II) Cost of production. ltbr. (iii) TIME period. (iv) Techniques of production. (v) Nature of the inputs used. (vi) Natural constrains.

Discussion

6559.	Highly elastic negatively sloped demand curve is related to
Answer» PERFECT competition Monopolistic Competition Both (a) and (B) NONE of these Solution :N/a

Discussion

6560.	Find out quartile deviation and coefficient of quartile deviation of the following series: 28,18,20,24,30,15,47,27
Answer» ANSWER :QD=5.5, COEFFICIENT of QD=0.23

Discussion

6561.	How will a decrease in the prive of the pen affect the demand of ink?
Answer» Solution :Since these are COMPLEMENTARY goods, with DECREASE in price of pen, demand of ink will increase because consumer will demand more of pens due to FALL in price of pens. There will be rightward shift in demand curve of ink from DD - `D_(1)D_(1)`. There is rightward shift in demand curve of ink due to decrease in price of pens.

Discussion

6562.	How is the demand for a good affected by a rise in the prices of other goods ? Explain OR Does a rise of other good have same effect on demand for a commondity ?
Answer» Solution :No, RISE in prices of other goods does not have same effect on demand for a commodity. (i) In CASE of rise in price of substitude goods, demand for the GIVEN commodity rises (ii) In case of rise in price of complementary goods, demand for the given commodity falls. (iii) In case of rise in price of UNRELATED goods, there is no change in demand for the given commodity.

Discussion

6563.	If one burger gives you satisfaction of 15 utils and 2 burgers generate total satisfaction of 25 utils, then caculate the marginal utility of second burger.
Answer» SOLUTION :10 UTILS.

Discussion

6564.	What is theprice elasticityof supplymean ? How dowe measureit ?
Answer» SOLUTION :PRICE Elasticityof supply means THEDEGREE of responsiveness ofsupplyfor a commditywithreferenceto changein THEPRICE of suchcommodity.It is measuredas : Price Elasticity of Supply `E_(s)) = (" Percentage change in QuantitySupplied ")/(" Percntage change in Price")`

Discussion

6565.	What happens to the demand of a good when consumer's income change ?
Answer» Solution :If the good is a NORMAL good, then an increase in income of the consumer leads to an increase in DEMAND of the commodity and vice-versa WHEREAS if the good is an INFERIOR good an increase income of the consumer leads to a DECREASE in demand of the commodity and vice-versa.

Discussion

6566.	What is perfect oligopoly?
Answer» Solution :If in an OLIGOPOLY market, the firms PRODUCE HOMOGENOUS PRODUCTS, it is called oligopoly,

Discussion

6567.	Will the monopolist firm continue to produce in the short run if a loss is incurred at the best short run level of output ?
Answer» Solution :If the monopolist cirm INCURS LOSS in the short run, then it will STOP PRODUCTION in the LONG run.

Discussion

6568.	What is the opportunity cost of an input which has no alternatives use?
Answer» SOLUTION :The OPPORTUNITY COST of such INPUT is ZERO.

Discussion

6569.	What is the relation between marginal cost and average cost when average cost in constant is constant ?
Answer» SOLUTION :MARGINAL COST is EQUAL to AVERAGE cost.

Discussion

6570.	Name two important sources of secondary data.
Answer» Solution :(i) Government Publications: Ministries of the Central and State GOVERNMENTS in India publish a variety of Statistics as their routine activity. (II) Semi-Government Publications: Semi-Government bodies (such as MUNICIPALITIES and Metropolitan Councils ) publish data relating to education, HEALTH, births, and deaths.

Discussion

6571.	A rise in the income of the consumer of a good X leads to a fall in the demand for that good. What is the good X called ?
Answer» 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

6572.	Explain through a diagram the effect a rightward shift of both the demand and supply curves on equilibrium price and quantity.
Answer»

Discussion

6573.	A consumer wants to consume two goods. The prices of the two goods are Rs 4 and Rs 5 respectively. The consumer's income is Rs 20 (i) Write down the equation of budget line. (ii) How much of good 1 can the consume, if she spends her entire income on that good ? (iii) How much of good 2 can she consume, if she spends her entire income on that good ? (iv) What is the slope of the budget line ?
Answer» Solution :Let the two goods be x and y given : Price of `x (P_(x)) = Rs 4`, Price of `y (P_(y)) = Rs 5`, Income of the CONSUMER = Rs 20. Now, the equation of budget line will be: `4 x + 5y = 20` (II) If the entire income is spent on good 1 (say, good x), then the quantity consumed of goody y will be zero. The REVISED budget line will be: `4x + 5 (0) = 20 " or " 5` units. So, the consumer will buy 5 units of good 1 (good x) (iii) If the entire income is spent on good 2 (say, good y), then the quantity consumed of good x will be zero. The revised budget line will be: `4(0) + 5y = 20 " or " y = 4` units So, the consumer will buy 4 units of good 2 (good y) (iv) The slope of a budget line measure the amount of change in good 2 required per unit of change in good 1 along the budget line. It is measured as follows: Slope `= (-P_(1))/(P_(2)) = (-P_(X))/(P_(Y)) = -0.8`

Discussion

6574.	What is meant by explicit cost ?
Answer» Solution :EXPLICIT is the ACTUAL money expenditure on inputs or payment made to outsiders for hiring their factor services. For example, WAGES paid toemployees, payment for raw MATERIAL .

Discussion

6575.	What does the value of first quartial indicate about a series ?
Answer»

Discussion

6576.	"The gap between Average Variable Cost and Average Fixed Cost falls when output rises". Defend or refute.
Answer» Solution :The given statement is refuted. The gap between the TWO costs RISES with rise in output as average variable cost TENDS to rise after a particular level of output, whereas, average FIXED cost continuosly FALLS.

Discussion

6577.	Give the meaning of cost.
Answer» SOLUTION :COST in economics includes actualexpenditure on inputs and the IMPUTED VALUE of the inputs SUPPLIED by the owners.

Discussion

6578.	What is the general shape of the TP, AP and MP curves ?
Answer» Answer :TP, AP and MP curves are INVERSELY U-shaped

Discussion

6579.	Why is theAR curve of a monopolist less elastic than the AR curve of a firm under monopolistic competition ? Explain.
Answer»

Discussion

6580.	What is saving?
Answer» Solution :SAVING is that part of income which is not CONSUMED. It is an act of ABSTINENCE from CONSUMPTION.

Discussion

6581.	Explain, giving examples. the problem of 'for whom to produce’.
Answer» Solution :This studies the problem of distribution of final goods and services or the problem of distribution of income.It has two aspects. The first aspect relates to personal distribution and the second aspect relates to functional distribution.Personal distribution refers to output/income share of individuals or households in society.Functional distribution refers to income share of different FACTORS of production.Here, the problem is whether ALLOCATION of resources is promoting equality or not.Equality is a social VIRTUE, and INEQUALITY may induce high saving, INVESTMENT and hence high rate of growth.

Discussion

6582.	Define an indifference map
Answer» Solution :INDIFFERENCE MAP REFERS to the family of indifference curves that REPRESENT consumer preferences over all the bundles of the TWO goods.

Discussion

6583.	Calculate weighted mean of the following data by using Direct and Short-cut Methods: {:("Items",81,76,74,58,70,73),("Weight",2,3,6,7,3,7):}
Answer» ANSWER :WEIGHTED MEAN = 70.04

Discussion

6584.	Government reduces the price of inputs used in the production of commodity X. Describe the chain of effects of this change in the market.
Answer» Solution :The chain of effects of this change can be summarised as under: Reduction in prices of inputs lowers the cost of production. Revenues remaining unchanged, profits increase. Increase in profits INDUCES the producers to supply more. Demand remaining unchanged, excess supply emerges. This leads to competition among SELLERS because they are not able to sell as they want to sell. As a result, price starts falling. DUE to FALL in price, demand expands and supply contracts till demand equals supply, creating new equilibrium at a LOWER price.

Discussion

6585.	Dividing a series into equal is called :
Answer» DECILE quartile percentile None of these Solution :DIVIDING a SERIES intoten EQUALPARTS is CALLED :decile

Discussion

6586.	Sachin made the following runs in different matches: {:("Runs",5-15,15-25,25-35,35-45,45-55),("Frequency"," "10," "12," "17," "19," "22):} Calculate the average mean of the runs by Step-deviation Method.
Answer» ANSWER :AVERAGE MEAN = 33.875 RUNS

Discussion

6587.	When marginal utility is zero, total utility is:
Answer» Zero Minimum Maximum Negative Answer :C

Discussion

6588.	Nature of demand curve under oligopoly :
Answer» PERFECTLY ELASTIC perfectly inelastic LESS elasitc Indeterminate Answer :D

Discussion

6589.	Discuss the nature of demand curve under: (a) Perfect competition, (b) Monopolistic competition, (c ) Monopoly,(d) Oligopoly
Answer» SOLUTION :a) Demand curve under perfect competition: In case of perfect competition, there are very large no. of BUYERS and sellers SELLING a homogeneous product at a price fixed by the market. Therefore, each firm is a price taker and faces a perfectly elastic demand curve.b) Demand curve under monopolistic competition: Under monopolistic competition, large no. of firms selling closely related but differentiated products makes the demand curve downward sloping. It implies that a firm can sell more output only by reducing the price of its product.c) Demand curve under monopoly: A monopoly firm islike an industry as the single seller constitutes the entire market for the product, which has no close SUBSTITUTES. So, a monopolist has full freedom and power to fix price for the product. However, demand of the product is not in the control of monopoly firm. In ORDER to increase the output to be sold, the monopolist will have to reduce the price. Therefore, monopoly firm faces a downward sloping demandcurve.d) Demand curve under oligopoly: The demand curve for an oligopoly firm is indeterminate, i.e. it cannot be drawn accurately as exact behavior pattern of a producer cannot be ascertained with certainty.

Discussion

6590.	What is meant by cumulative frequency series?
Answer» SOLUTION :CUMULATIVE frequency SERIES is that series in which the frequencies are continuously added corresponding to each CLASS INTERVAL in the series.

Discussion

6591.	Name the economic value achievable when attempts are made to increase resources in the country.
Answer» SOLUTION :ECONOMIC GROWTH.

Discussion

6592.	Difference between perfect competition and monopoly.
Answer» Solution :~ In perfect COMPETITION. there are very large no. of sellers and no individual seller has control over activities of other firms where as in monopoly, there is a single seller and the monopolist has full control over the supply.~The product is homogeneous i.e it is identical in all respects in perfect competition while there are no close substitutes off the product in monopoly.~In perfect competition, there is freedom of entry and exit. It leads to absence of abnormal profits and losses in the long run. Where as in monopoly, there is restriction on entry and exit. So a FIRM can earn abnormal profits and losses in the long run.~Perfect competition: Firm is the price taker as price is determined by the industry.Monopoly: Monopolist is a price-maker as firm and industry are ONE and the same thing.~Perfect competition: Buyer and sellers have perfect knowledge about market conditions.Monopoly: Buyers and sellers do not have perfect knowledge.~Perfect competition: Demand CURVE is perfectly elastic as price remains same at all levels of output.Monopoly: Demand curve slopes downward as more output can be sold only at less price.~Perfect competition: No selling costs are incurred as buyers and sellers have perfect knowledge about market conditions.Monopoly: Selling costs are incurred for informative purposes DUE to lack of perfect knowledge.

Discussion

6593.	What iscost ineconomics?
Answer» Solution :Cost in economics is the SUMOF ACTUAL moneyexpendingon inputs and ESTIMATED VALUEOF inputs provided by THEOWNER.

Discussion

6594.	The class mid-point is equal to
Answer» the AVERAGE of the UPPER CLASS LIMIT and the lower class limit the product of upper class limit and the lower class limit the ratio of the upper class limit and the lower class limit none of the above Answer :A

Discussion

6595.	The Production Possibility Frontier is generally,
Answer» Convex Shaped Downward Sloping CONCAVE Shaped Downward Sloping Either (a) or (B) Neither (a) nor (b) Solution :B. We normally draw a PPF on a diagram as concave to the origin i.e. as we move down the PPF, as more RESOURCES are allocated towards Good Y the extra output gets smaller – so more of Good X has to be given up in ORDER to produce Good YThis is an explanation of the law of diminishing returns and it occurs because not all factor inputs are equally suited to producing items

Discussion

6596.	If there is no change in demand for commodity 'X' even after rise in its price, then it demand is:
Answer» PERFECTLY ELASTIC Pecfectly Inelastic Less Elastic HIGHLY Elastic Solution :N/a

Discussion

6597.	The title of the table should be:
Answer» CAREFULLY WORDED BRIEF CLEAR All the above. SOLUTION :D

Discussion

6598.	Production Possibility Frontier is:
Answer» Downward Sloping Concave Shaped Both (a) and (b) Either (a) or (b) SOLUTION :The two BASIC CHARACTERISTICS or features of PPF are:1. PPF slopes downwards:PPF shows all the maximum possible combination of two goods, which can be produced with the available resources and technology. In such a case, more of one good can be produced only by taking resources away from the production of another good.2. PPF is Concave Shaped:PPF is concave shaped because of increasing marginal opportunity costs, i.e. more and more units of one commodity are sacrificed to GAIN an ADDITIONAL unit of another commodity.

Discussion

6599.	What are the fetures of monopoly ?
Answer» Solution :Following are the features of monopoly : Single SELLER and many buyers Noclose SUBSTITUTES Restriction on entry and exit of firms Price discrimination Price maker/Full control over price Downward SLOPING and less elastic demand CURVE (AR).

Discussion

6600.	What are the degrees of price elasticity of supply?
Answer» Solution :The degrees of price ELASTICITY of SUPPLY are : (i) Perfectly ELASTIC supply. When there is an infinite supply at a particular price and supply becomes zero with a slight fall in price. ltbr. (ii) Perfectly inelastic supply. When supply does not change with change in price. ltbr. (iii) Highly elastic supply. When `%` change in quantity supplied is GREATER than `%` change in price. (iv) Less elastic supply. When `%` change in quantity supplied is less than `%` change in price. ltbr. (v) UNITARY elastic supply. When `%` change in quantity supplied is equal to `%` change in price.

Discussion

Explore topic-wise InterviewSolutions in .

Given values of elasticities of demand , spot ' elastic' demand :

Distinguish between:(i)Variable factors and fixed factors(ii) Short run and long run

How does the nature of a commodity influence its price elasticity of demand.

Calculate arithmetic mean of the following frequency distribution: {:("Class","less than 10",10-20,20-30,30-40,40-50,50-60,"more than 60"),("Frequency",""5," "12," "18," "22," "6," "4,""3):}

Assumed mean is taken in which method?

What are the factors affecting elasticity of supply?

Highly elastic negatively sloped demand curve is related to

Find out quartile deviation and coefficient of quartile deviation of the following series: 28,18,20,24,30,15,47,27

How will a decrease in the prive of the pen affect the demand of ink?

How is the demand for a good affected by a rise in the prices of other goods ? Explain OR Does a rise of other good have same effect on demand for a commondity ?

If one burger gives you satisfaction of 15 utils and 2 burgers generate total satisfaction of 25 utils, then caculate the marginal utility of second burger.

What is theprice elasticityof supplymean ? How dowe measureit ?

What happens to the demand of a good when consumer's income change ?

What is perfect oligopoly?

Will the monopolist firm continue to produce in the short run if a loss is incurred at the best short run level of output ?

What is the opportunity cost of an input which has no alternatives use?

What is the relation between marginal cost and average cost when average cost in constant is constant ?

Name two important sources of secondary data.

A rise in the income of the consumer of a good X leads to a fall in the demand for that good. What is the good X called ?

Explain through a diagram the effect a rightward shift of both the demand and supply curves on equilibrium price and quantity.

What is meant by explicit cost ?

What does the value of first quartial indicate about a series ?

"The gap between Average Variable Cost and Average Fixed Cost falls when output rises". Defend or refute.

Give the meaning of cost.

What is the general shape of the TP, AP and MP curves ?

Why is theAR curve of a monopolist less elastic than the AR curve of a firm under monopolistic competition ? Explain.

What is saving?

Explain, giving examples. the problem of 'for whom to produce’.

Define an indifference map

Calculate weighted mean of the following data by using Direct and Short-cut Methods: {:("Items",81,76,74,58,70,73),("Weight",2,3,6,7,3,7):}

Government reduces the price of inputs used in the production of commodity X. Describe the chain of effects of this change in the market.

Dividing a series into equal is called :

Sachin made the following runs in different matches: {:("Runs",5-15,15-25,25-35,35-45,45-55),("Frequency"," "10," "12," "17," "19," "22):} Calculate the average mean of the runs by Step-deviation Method.

When marginal utility is zero, total utility is:

Nature of demand curve under oligopoly :

Discuss the nature of demand curve under: (a) Perfect competition, (b) Monopolistic competition, (c ) Monopoly,(d) Oligopoly

What is meant by cumulative frequency series?

Name the economic value achievable when attempts are made to increase resources in the country.

Difference between perfect competition and monopoly.

What iscost ineconomics?

The class mid-point is equal to

The Production Possibility Frontier is generally,

If there is no change in demand for commodity 'X' even after rise in its price, then it demand is:

The title of the table should be:

Production Possibility Frontier is:

What are the fetures of monopoly ?

What are the degrees of price elasticity of supply?