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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 6651. |
In case of constant prices, average revenue is more than marginal revenue. |
| Answer» SOLUTION :False : AVERAGE revenue is equal to marginal revenue in CASE of CONSTANT prices. | |
| 6653. |
A producer changes supply of a commodity only when there is change in price of the given commodity |
| Answer» Solution :False: Producer willalsochangethe supply if there is CHANGE in other factors, like;in priceof FACTORSOF production, CHANGEIN stateof technology, changein TAXATION policy, change in consumer preferenceetc. | |
| 6654. |
Discuss the relationship between AR and MR when price is reduced to sell more . |
| Answer» SOLUTION :Both the CURVES will slope downwards and the MR CURVE will be more STEEPER than the AR curve or the MR curve will lie below the AR curve. | |
| 6655. |
The difference between average total cost and average variable cost isaveragefixed cost, which never becomes zeroas total cost decreases with decrease with decrease in the level of output. |
| Answer» Solution :False. THEDIFFERENCE between AVERAGE TOTAL cost (ATC) and average variable cost (AVC) is average fixed cost (AFC) , which rises with DECREASE in output level . AFC=TFC/output. So Average fixed cost decreases as output INCREASES and increases with decrease in output. | |
| 6656. |
What is meant by monotonic preferences ? |
| Answer» Solution :Monotonic preference means that a rational consumer ALWAYS prefers more of a commodity as it OFFERS him a HIGHER LEVEL of satisfaction. | |
| 6657. |
What is the main disadvantage of range ? |
| Answer» Solution :The DISADVANTAGE of using range is that it does not measure the SPREAD of the majority of values in a data set-it only MEASURES the spread between highest and LOWEST values. As a RESULT, other measures are required in order to give a better picture of the data spread. | |
| 6658. |
What happens to TPP when MPP of the variable input is negative ? |
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| 6659. |
The assumption of ''Constant marginal utility of money'' means that importance of money to consumer is: |
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Answer» Increasing |
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| 6660. |
Suppose, the market price of a commodity as determined by forces of demand and supply is Rs 12 per unit. Given this price, draw AR,MR and TR curves of a firm with different levels of output. |
Answer» SOLUTION :
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| 6661. |
As output is increased the difference between TVC and TC: |
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Answer» Increases |
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| 6662. |
How is equilibrium reached if there is excess supply at a price higher than equilibrium price ? |
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Answer» Solution :Equilibrium price refers to the price at which market DEMAND is equal to market supply (i.e., there is no EXCESS supply). So, the price with excess supply is not an equilibrium price. In the DIAGRAM, at `OP_(1)` level of price, `M_(2)M_(1)` is the excess supply. When the market supply is greater than the market demand, the COMPETITION among sellers will bring price downwards. The quantity supplied tends to contract in response to the fall in price (law of supply) leading to movement (contraction) along supply curve SS, from point B to point E. At OP, quantity supplied contracts demand, leading to movement (extension) along demand curve DD, from point A to point E. THUS, the quantity demanded rises from `OM_(2)-OM`. The equilibrium is at point E, with OP as equilibrium price and OM as equilibrium quantity. 
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| 6663. |
Massive unemployment will shift the PPF to the lift. Defend or refute. |
| Answer» Solution :The given statement is refutes. Massive UNEMPLOYMENT does not decreases the CAPACITY of economy to PRODUCE. So, there will be no shift of PPF. HOWEVER economy will OPERATE at some point inside the PPF due to utilization of human resources. | |
| 6664. |
What is the meant by random sampling ? |
| Answer» SOLUTION :RANDOM SAMPLING is that method in which the INVESTIGATOR himself makes the choice of the sample items which in his opinion in the sample | |
| 6666. |
Higher indifference curve respresent higher level of satisfaction of the consumer'. Explain the statement. Also state the underlying assumption related to this property of indifference curve. |
| Answer» Solution : The consumer derives more satisfaction from the COMBINATION of two GOODS on a higher indifference curve because more units of both the commodities are used that will surely be more satisfying than the LOWER quantity combinations. The underlying assumption here is the assumption of MONOTONIC preference which represents that a consumer will prefer a combination which contains more of at least one and no less of the other. | |
| 6667. |
Why does government intervene to affect market equilibrium ? |
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| 6668. |
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):} All possibilities A to E deal with: |
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Answer» Full USE of available resources |
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| 6669. |
Describe the shortcut method of calculating the standard deviation. |
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| 6670. |
The following table shows marks in English secured by students of Class X in your school in their examination. Calculate mean marks using Direct Method. {:("Marks",0-10,10-20,20-30,30-40,40-50),("Number of Students"," "20," "24," "40," "36," "20):} |
Answer» SOLUTION : `BARX=(sumfm)/(sumf)=(3,620)/(140)=25.86` MEAN MARKS = 25.86. |
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| 6671. |
Why is demand curve under monopolistic competition more elastic as compared to the demand curve under monopoly ? |
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| 6672. |
Which cost increases continuously with increase in production ? |
| Answer» Solution :N//A | |
| 6673. |
What tuill you say about MPP of a factor when TPP rises at an increasing rate ? |
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Answer» |
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| 6674. |
What is the nature of correlation of two variables , when they move in the same direction ? |
| Answer» SOLUTION :When TWO VARIABLES move in the same DIRECTIONS, such correlation is positive in nature. | |
| 6675. |
_______ deals with economic issues at the level of economy as a whole.(Microeconomics/Macroeconomics) |
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| 6676. |
Define fixed cost. |
| Answer» SOLUTION :It refers to those costs which do not vary directly with the LEVEL of OUTPUT. | |
| 6677. |
What are the three central problems of an economy? Why do they arise? |
| Answer» SOLUTION :The central problems of an economy are:(i) What to produce?this problem has two dimensions:(1) what good and services are to be produced2) in what quantity goods and services are to be produced(ii) How to produce?it refers to the technique of production:labour INTENSIVE technique and CAPITAL intensive technique.(iii) For whom to producethis problem relates to the distribution of output in the economy.It has two aspects:Factoral distribution of income and inter-personal distribution of income.The central problems of an economy arises due to three REASONS:a) The wants of the people are unlimited.b) The resources to satisfy these wants are limited.c) These limited resources have alternative uses. | |
| 6678. |
If with the rise in price of good Y, demand for goof X rises, the two goods are : (Choose the correct alternatives) |
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Answer» Substitutes |
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| 6679. |
When marginal product rises, total product : (Choose the correct alternative) |
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Answer» Falls |
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| 6680. |
In case of giffen goods, demand curve slope upwards. |
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| 6681. |
Calculate coefficient of correlation, given the following data : |
Answer» Solution : `R=(sumxy)/(sqrt(sumx^(2)xxsumy^(2))),x=(X-bar(X)),y=(Y-bar(Y))` The table shows that , `sumxy=58,sumx^(2)=28,sumy^(2)=130` Substituting the values, we get `r=(58)/(sqrt(28xx130))=(58)/(sqrt(3,640))=(58)/(60.33)=+0.96` COEFFICIENT of Correlation (r)=+0.96. It is a SITUATION of high positive correlation. |
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| 6682. |
What is meant by coefficient of variation? How will you calculate it in case of a discreate series? |
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Answer» Solution :COEFFICIENT of variation is the PERCENTAGE variation in the mean, the standard deviation being considered as the TOTAL variation in the mean. CV = (`sigma`/`BARX`) X 100 |
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| 6683. |
Which measures of dispersion is thebest and how? |
| Answer» Solution :Standard deviation is considered to be the best measure of DISPERSION and is thereore, the most WIDELY used measure of dispersion.(i) It is based on all values and thus, provides information about the complete series. Because of this reason, a change in even one value affects the value of standard deviation.(ii) It is independent of ORIGIN but not of scale.(iii) It is USEFUL in advance statistical calculations like comparison of variability in two data sets.(iv) It can be used in testing of hypothesis.(v) It is capable of further ALGEBRAIC treatment. | |
| 6684. |
Construct histogram, frequency polygon and frequency curve from the following data : |
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| 6685. |
An increase in price of inputs will shift the supply curve |
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Answer» to its left |
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| 6686. |
Idnentify the three phases of the Law of Variable Proportions from the following and also give reason behind each phase. |{:("Units of","Total physical Product"),("Variable Input","(Units)"),(1,10),(2,22),(3,30),(4,35),(5,30):}| |
Answer» SOLUTION :
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| 6687. |
Tota product will increase only when marginal product increases. |
| Answer» Solution :False. Total product ALSO INCREASES when marginal Product DECREASES but REMAINS POSITIVE. | |
| 6688. |
What is meant by equilibrium output of a producer? |
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| 6689. |
Name the attainable combinations are : |
Answer» Solution :The attainablecombinations are : POINTS are A, B, C, D, P and R. 
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| 6690. |
At zero level of output TC is equal to |
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Answer» TVC |
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| 6691. |
Explain briefly, similarities and dissimilarities between median and quartiles. |
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| 6692. |
Expansion of Demand is associated with : |
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Answer» RISE in PRICE, Rise in QUANTITY demanded |
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| 6693. |
Explain the method of calculating coefficient of quartile deviation . |
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| 6694. |
If the economy is operating inside the production possibility frontier, it indicates that the economy is saving resources for growth and expansion in future. |
| Answer» SOLUTION :It INDICATES that there is UNDERUTILISATION or ineffcient USE of RESOURCES. | |
| 6695. |
"Change in quantity demanded" of a good is on account of change in: |
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Answer» PRICE of the realted GOOD |
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| 6696. |
What is consumer equilibrium ? |
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| 6697. |
State 3 features of monopoly market. Describe any one. |
| Answer» SOLUTION :N/a | |
| 6698. |
Define budget line and indifference cuve. Also explain why the two are downward sloping form left to right.? |
| Answer» Solution :Budget line is a graphical REPRESENTATION of all possible combinations of two goods which can be purchased with GIVEN income and prices, such that the cost of each of these combinations is equal to the money income of the consumer.Indifference CURVE is a curve on a graph (the axes of which represent quantities of two COMMODITIES) linking those combinations of quantities which the consumer regards as of equal value.Budget line is downward sloping because when more and more units of one good can be bought, it leads to decrease some units of other good with the given income.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. | |
| 6699. |
Explain why the demand curve facing a firm unde monopolistic competition is negatively sloped. |
| Answer» Solution :The demand curve of a firm under monopolistic COMPETITION is NEGATIVELY sloped because of product differentiation. The product of the SELLERS are DIFFERENTIATED but close substitutes of one ANOTHER. It can sell more only be reducing the price. | |
| 6700. |
Explain the basic problem of an economy? |
| Answer» Solution :Scarcity, or LIMITED resources, is one of the most basic economic PROBLEMS we face. We RUN into scarcity because while resources are limited, we are a society with UNLIMITED wants. Therefore, we have to choose. We have to MAKE trade-offs | |