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6601.

Explain the distinction between budget set and budget line.

Answer»

Solution :Budget SET refers to the set of POSSIBLE combination of the TWO goods the consumer consume which he can afford from his income and given price, whereas budget line is the graphical PRESENTATION of the whole collection of the combination of the two goods which COSTS the consumer exactly his income.
Discussion
6602.

When a consumer increases consumption of a good from 2 units to 4 units, total utility rises from 9 units to 14 utils. Marginal utility is :

Answer»

5 UTILS
`2.5` utils
3 utils
Can't calculate

ANSWER :B
Discussion
6603.

Explain the distinction between budget set and budget line. When can a budget line shift ?

Answer»

Solution :Budget set refers to the set of POSSIBLE combination of the two GOODS the consumer consume which he can afford from his income and given price, whereas budget line is the graphical PRESENTATION of the whole collection of the combination of the two goods which costs the consumer exactly his income.The budget line will SHIFT when there is: A change in the prices of one or both products with nominal income (budget) REMAINING the same.
Discussion
6604.

Which of the shaded area in the diagrams below represent total utility ?

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ANSWER :C
Discussion
6605.

Distinguish between miroeconomics and macroeconomics With an example of each.

Answer»

Solution :Micro Economics talks about the actions of an INDIVIDUAL unit, i.e. an individual, firm, household, market, INDUSTRY, etcfor example- consumer equilibirium.On the other hand, the Macro Economics STUDIES the ECONOMY as a WHOLE, i.e. it assesses not a single unit but the combination of all i.e. firms, households, nation, industries, market, etc.for example- national income
Discussion
6606.

Distinguish between : (i) Increase and expansion of demand. (ii) Decreas and contraction in demand.

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Solution :(i) Increase in demand is the increase in demand of a commodity owing to any other factor affecting the demand for the commodity other than the own price of the commodity WHEREAS EXPANSION of demand is the increase in demand owing to a FALL in own price of the commodity.
Increase in demand leads to a rightward shift in the demand curve whereas expansion of demand leads to a downward MOVEMENT along the same demand curve.
(ii) Decrease in demand is the fall in demand of a commodity owing to a change in other factors affecting the demand for the commodity other than the own price of the commodity whereas contraction in demand is the fall in demand of the commodity DUE to an increase in own price of the commodity.
Decrease in demand leads to a leftward shift in the demand curve whereas contraction in demand leads to an upward movement along the same demand curve.
Discussion
6607.

Average revenue equals : (Choose the correct alternative)

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Total revenue DIVIDED by the QUANTITY produced
Price
Both (a) and (b)
NONE of the above

SOLUTION :N/A
Discussion
6608.

What is supply schedule?

Answer»

SOLUTION :If refers to a table which shows various quantities of a commodity that a produceris willing to SELL at DIFFERENT price, DUING a given period of TIME.
Discussion
6609.

Explain the implication of the following in an oligopoly market, (a) Inter-dependence between firms, (b) Non price competition.

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Solution :a) Inter-dependence between firms: Firms under oligopoly are interdependent. Interdependence means that actions of one firm affect the actions of other firms. A firm considers the action and REACTION of the RIVAL firms while DETERMINING its price and output levels. A CHANGE in output or price by one firm evokes reaction from other firms operating in the market. For example: market for cars in India is dominated by few firms( Maruti, Tata, Hyundai, Ford, Honda,etc.). A change by one firm (say, Tata) in any of its vehicle( say, Indica) will induce other firms( say, Maruti, Hyundai,etc) to make changes in their respective vehicles.b)Non price COMPETITION.: If a firm tries to reduce the price, the rivals will also react by reducing their prices. However, if it tries to raise the price, other firms might not do so. It will lead to loss of customers for the firm, which intended to raise the price. So, firms prefer non- price competition instead of price competition.
Discussion
6610.

Explain the implications of the following ina perfectly competitive market: (a) Large number of sellers (b) Homogeneous products

Answer»

Solution :(a) Large number of sellers means that number of firms are large enough so that contribution to total OUPUT of the industry by any individual firm is negligible. So, no single firm is in a position to influence the market price on its own by chaining its own output, Thus, Price REMAINS unchanged.
(b) HOMOGENEOUS products means that buyers treat products of all the firms as same in all respect as homogeneous product. As such no firm can charge a higher price because no buyer is willing to pay the same. Then market price remains the same for all the firms.
Discussion
6611.

Define total revenue

Answer»

Solution :Total REVENUE REFERS to total receipts from the SALE of a GIVEN quantity of a COMMODITY.
Discussion
6612.

Base year is also known as:

Answer»

CURRENT year
reference year
periodic year
both (a) and (C)

ANSWER :B
Discussion
6613.

The government has granted license of production of a particular commodity to one production unit leading to emergence of monopoly. Thought monopoly leads to concentration of power in few hands as per conventional belief, how in your opinion monopoly is good for us ?

Answer»

Solution :If monopoly emerges because of its competency to provide a better PRODUCT.
If it is outcome of DEVELOPMENT and resarch and USES scarce resources efficiently.
Discussion
6614.

Where does SMC curve cut AC? Give reasons to support your answer.

Answer»

Solution :SMC curve cut AC at its minimum points.When the MC is smaller the AC, the AC decreases. This is because when the extra UNIT of output is cheaper than the AVERAGE cost then the AC is pulled down. Similarly, when the MC is GREATER than the AC, the AC is pulled up. The point of intersection between the MC and AC curves is also the minimum of the AC curve
Discussion
6615.

According to the Law of diminishing marginal utility, satisfaction obtained form consumption of each successive unit:

Answer»

INCREASES
Decreases
Remains same
Either increases or decreases

Answer :B
Discussion
6616.

What is the degree of elasticity of supply in the diagram?

Answer»

zero
one
infinity
none of these.

Answer :A
Discussion
6617.

Fixation of minimum wage below the equilibrium wage rate leads to :

Answer»

Unemployment
Overemployment
Neither (a) nor (B)
EITHER (a) or (b)

ANSWER :C
Discussion
6618.

Define an indifference curve. Explain why an indifference curve is downward sloping from left to right.

Answer»

Solution :An INDIFFERENCE curve is a graph showing combination of two goods that GIVE the consumer equal satisfaction and utility. Each point on an indifference curve indicates that a consumer is indifferent between the two and all points give him the same utility.The indifference curves must slope down from left to right. This means that an indifference curve is negatively sloped. It SLOPES downward because as the consumer increases the consumption of X commodity, he has to give up certain units of Y commodity in order to maintain the same level of satisfaction.
Discussion
6619.

State the relation between marginal revenue and average revenue.

Answer»

SOLUTION :RELATIONSHIP between MR and AR : (i) When MR is greater than AR then AR increases. (ii) When MR is equal to AR then both the curves coincide with each other and are parallel to x-axis. (III) When MR is less than AR, AR decreases.
Discussion
6620.

Follwing are the marks obtained by 8 students in Statistics. Calculate the arithmetic mean. {:("Marks",15,18,16,45,32,40,30,28):}

Answer»

Solution :`{:("Marks (X)"),(""15),(""18),(""16),(""45),(""32),(""40),(""30),(""28),(sumX=224):}`
`barX=(sumX)/N=(X_(1)+X_(2)+...X_(10))/10=224/8=28`
Average marks of the 8 STUDENTS = 28.
Discussion
6621.

Under monopoly selling costs are incurred for:

Answer»

PERSUADING CUSTOMERS for not BUYING COMPETITOR's product
Inforamtion purpose
Promoting SALES of the product
None of these

Solution :N/a
Discussion
6622.

How is price elasticty related to a vertical straight line demand curve ?

Answer»

Solution :A vertical straight LINE demand CURVE is PERFECTLY inelastic `(E_(d))=0)`
Discussion
6623.

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

Answer»

SOLUTION :No, there are no FIXED cost in the long-run as all the FACTORS are VARIABLE. Fixed cost EXISTS only in the short-run.
Discussion
6624.

State the conditions of consumer equilibrium in case of indifference curve approach

Answer»


Solution :Budget line is tangent to INDIFFERENCE CURVE (CONVEX to origin) (if) MRS =PRICE RATIO
Discussion
6625.

There are 40 students in your school who are cricke players. You are to form a term of 11 players. How would you do it ? Would youresort to random sampling technique ? Give reasons in support of your answer

Answer»

Solution :We can USE the random sampling technique if and only if all the STUDENTS of the school are equally brilliant in the game of cricket, otherwise, if no such information is available non-random sampling technique can be used. In this REGARD, any of the non-random sampling, namely, judgement, QUOTA or convenience sampling technique can be used. For instance, in accordance to the judgement sampling, based on your own opinion and judgement, any 11 students that in your opinion are the BEST, can be selected out of the total 40 students.
Discussion
6626.

With regard to distrust of Statistics which of the following statements is not correct ?

Answer»

Statistics is a RAINBOW of lies
Statistical are TISSUES of falsehood
Statistics EXPRESS the FACTS in numbers
There are three kinds of lies-lies, demand lies and statistics

Solution :C
Discussion
6627.

Demand for product X is perfectly inelastic. What will be the change in demand if price falls from ₹ 10 per unit to ₹5 per unit ?

Answer»

SOLUTION :There will be no CHANGE in DEMAND as demand is PERFECTLY INELASTIC.
Discussion
6628.

In a commodity market excess demand exists when :

Answer»

MARKET price is greater than EQUILIBRIUM price .
Equilibrium price is greater than market price .
Equilibrium price is not equal to market price.
Government fixes the price.

Answer :B
Discussion
6629.

What is an economy ?

Answer»

SOLUTION :It is a system which provides PEOPLE with the MEANS to work and EARN a living.
Discussion
6630.

After reaching the point of satiety, consumption of additional units of the commodity cause:

Answer»

TU FALLS and MU increases
Both TU and MU increase
TU falls and MU falls and BECOMES NEGATIVE
TU becomes negative and MU falls

Answer :C
Discussion
6631.

Define quartile. What do the values of first and third quartiles indicate about a series ?

Answer»
Discussion
6632.

Marginal revenue and price are always equal under.

Answer»

PERFECTLY COMPETITION only
Monopolistic Competition
Oligopoly
All of these

Solution :N/a
Discussion
6633.

Microeconomics deals with economic behaviour of:

Answer»

(a) Economic System
(b) Economic ENTITIES that MAKE up the system
(C) COUNTRY
(d) Regions of a country

ANSWER :b
Discussion
6634.

Calculate mean from the following data: {:("Marks",10-20,10-30,10-40,10-50,10-60,10-70,10-80,10-90),("Number of Students"," "4," "16," "56," "97," "124," "137," "146," "150):}

Answer»

SOLUTION :The given data is in cumulative frequency form. It should FIRST be converted into simple frequency.

Mean, `barX=A+(sum fd')/(sumf)xxC`
`=45+20/150xx 10`
`=45+1.33=46.33`
THUS, Mean MARKS = 46.33.
Discussion
6635.

which of the following will have elastic demand ?

Answer»

Matchbox
NCERT textbooks
Medicines
AIR conditioners.

Solution :N/a
Discussion
6636.

Commodity 'Y' when its price rises.

Answer»


Answer :MOVEMENT from a lower POINT to an upper point on same SUPPLY CURVE
Discussion
6637.

Give the meaning of revenue

Answer»

Solution :Revenue REFERS to the amount RECEIVED by a firm from the sale of a given quantity of a COMMODITY in the MARKET.
Discussion
6638.

What is equilibrium point?

Answer»

SOLUTION :Equilibrium point is the point of INTERSECTION of the demand curve and SUPPLY curve of a commodity.
Discussion
6639.

Define market demand.

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Solution :Market demand refers to the QUANTITY of a commodity that all the consumers are WILLING and able to buy, at a particular price during a GIVEN period of time.
Discussion
6640.

What will be the effect of increase in income on demand curve of a normal good?

Answer»

Solution :The DEMAND curve of normal good will SHIFT to its RIGHT DUE to increase in income
Discussion
6641.

Define Total Product, Average Product and Marginal Product.

Answer»

Solution :Total product is the total AMOUNT of output produced by employing a particular LEVEL of inputs.
Average product is the output per unit of variable INPUT.
Marginal product is the addition to total product when ONE more unit of variable input is EMPLOYED.
Discussion
6642.

Interpret the value of r as 1, -1 and 0.

Answer»

Solution :When r = 1 , the correlation is perfect POSITIVE. In this case, PROPORTIONAL change in two variables is LINEAR and is in the same DIRECTION.
When r = -1 , the correlation is perfect negative. In this case , proportional change in two variables is linear and is in the opposite direction.
When r =0 , the two variables are uncorrelsted. There is no linear relationship between them. However, it does not IMPLY that the two variables are independent.
Discussion
6643.

The state govt. has sanctioned a certain amount to increase production in rural areas. Which technique of production will you suggest to the state government for this project?

Answer»

SOLUTION :Labour INTENSIVE technique will be appopriate.
It will generate employment OPPORTUNITIES and will HELP in solving the problem of unemployment.
Discussion
6644.

Why does the difference between ATCand AVCdecrease with increase in level of output Explain.

Answer»

Solution :GIVEN thatATC =AFC +AVC
`:.ATC -AVC =AFC`
`AFC =(TFC)/("OUTPUT ")`
`by definitionTFC is constant. Thereforeas output is increased AFC falls
SINCE AFC =ATC -AVC, thedifference between
ATC and AVC fallsas output is increased.
Discussion
6645.

The following table shows wages of the workers. Calculate the average wage of the workers.{:("Wages(Rs.)",10-19,20-29,30-39,40-49,50-59),("Number of Workers"," "8," "9," "12," "11," "6):}

Answer»


ANSWER :AVERAGE WAGE of the WORKERS = RS. 34.07
Discussion
6646.

If r=0.25,sumxy=45,sigma_(y)=3,sumx^(2)=50, where x and y denote deviation from their respective means, find the number of items.

Answer»

Solution :Given `: r=0.25,sumxy=45, sigma_(y)=3,sumx^(2)=50`
Now, ` sigma_(y)=sqrt((sumy^(2))/(N))`
when `y=Y-bar(Y)` [formula of STANDARD Deviation ]
`3=sqrt((sumy^(2))/(N))`
Squaring both sides, we GET
`9=(sumy^(2))/(N) IMPLIES sumy^(2)=9N`
Now, `r=(sumxy)/(sqrt(sumx^(2)xxsumy^(2)))`
`implies 0.25=(45)/(sqrt(50xx9N))`
Squaring both sides
`0.0625=((45)^(2))/(50xx9N)`
`0.0625=(2,025)/(50xx9N)`
`implies 0.0625=(2,025)/(450N)`
`implies (0.0625)(450)N)=2,025`
`implies (28.125)N=2,025`
`:.N=(2,025)/(28.125)=72`
Number of Items =72
Discussion
6647.

What is the behaviour of Marginal Revenue in a market in which a firm can sell any quantity of the output it produces at a given price ?

Answer»

SOLUTION :MARGINAL Revenue REMAINS CONSTANT at all levels of output.
Discussion
6648.

There are train and bus services between New Delhi and Jaipur. Suppose that the train fare between the two cities comes down. How will this affect demand curve for bus travel between the two cities ?

Answer»

Solution :DEMAND curve for BUS travel will shift TOWARDS LEFT. It happens because price of substitute (train fare) has decreased and it will make the bus travel relatively COSTLY.
Discussion
6649.

Which of the following is correct regarding Statistics ?

Answer»

AGGREGATE of facts
Numerically expressed
Affected by MULTIPLICITY of causes
All of these

Solution :D
Discussion
6650.

What is meant by diminishing returns to a factor ?

Answer»

SOLUTION :DIMINISHING returns to a FACTOR refers to a phase when total product increase at a decreasing RATE and marginal product falls, but remains positive, with increase in variable factor.
Discussion