7498 + Interview Questions in Economics in Class 11 Page 135 InterviewSolution

6701.	Explain the changes that take place in total product and marginal product under increasing returns to a factor.
Answer» Solution :Under increasing returns to a factor, total PRODUCT increases at increasing RATE as more and more units of a variable input are EMPLOYED. As a result, MARGINAL product also increases.

Discussion

6702.	Which of the following are titles of the rows of a table?
Answer» TITLE Stub Caption None of these Solution :B

Discussion

6703.	Distinguish betweeen perfect oligopoly and imperfect oligopoly. Also explain the "interdependence between the firm" features of oligopoly
Answer» Solution :Pure or Perfect Oligopoly: If the firms produce homogeneous products, then it is called pure or perfect oligopoly. Though, it is rare to find pure oligopoly situation, yet, cement, steel, aluminium and cemicals producing industries approach pure oligopoly.Imperfect or differentiated oligopoly: If the firms produce differentiated products, then it is called differentiated or imperfect oligopoly. For example, passenger cars, CIGARETTES or soft drinks. The goods produced by different firms have their own distinguishing characteristics, yet all of them are CLOSE substitutes of each other.The "interdependence between the firms" feature of the oligopoly can be EXPLAINED as follows: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.

Discussion

6704.	Distinguish between census and sample surveys. List four important types of sampling method. Explain the reasons for preparing sample surveys in the collection of Statistic.
Answer» Solution :Census: It is an official count or a survey, especially that of a population.Sample survey: It is a survey which is carried out using a sampling method. This means a portion of the population is chosen, not the full population. TYPES of sampling methods:1- Simple RANDOM Sampling (SRS)2- Stratified Sampling.3- Cluster Sampling.4- SYSTEMATIC Sampling.5- Multistage Cluster Sampling (in which some of the methods above are combined)Examples: for statistics there are softwares used for statistical methods, like snap survey SOFTWARE.

Discussion

6705.	_________ mean is the simplest measure of central tendencies. (Arithmetic/Geometric)
Answer» ANSWER :ARITHMETIC

Discussion

6706.	Explain the concept of a production function.
Answer» SOLUTION :PRODUCTION function is an expression of the TECHNOLOGICAL relation between PHYSICAL inputs and output of a good.

Discussion

6707.	Who is a producer?
Answer» SOLUTION :A producer is an ECONOMIC AGENT who produces goods and services for sale to EARN PROFIT.

Discussion

6708.	What is meant by production ?
Answer» Solution :PRODUCTION is a PROCESS of COMBINING inputs in order to MAKE some OUTPUT.

Discussion

6709.	A company plans to expand its operations in the coming year. It is situated near a town where there is availability of labour at reasonable rates, Also the effective machinery for production can be obtained easily. The company as caught between the choice of technique of production. What do you suggest ?
Answer» Answer :Company should ANALYSE its requirements CAREFULLY. It should choose an ideal factor combination to maximise profits. Since the labour and machines both are AVAILABLE at reasonable rates, the company should use both fixed and VARIABLE FACTORS optimally.

Discussion

6710.	All the curves except"______" are U shaped curves :
Answer» AVERAGE FIXED COST Curve Average VARIABLE Cost Curve Average CostCurve Marginal Cost Curve Solution :N//A

Discussion

6711.	Explain any three sources of restricted entry under monopoly
Answer»

Discussion

6712.	Can an economy operate outside PPC with given resources and technology ?
Answer» Solution :No, an economy cannot OPERATE outside PPC with given resources and technology as the COMBINATIONS outside the PPC are UNATTAINABLE.

Discussion

6713.	What do you mean by inferior good?
Answer» SOLUTION :INFERIOR goods are the goods with income EFFECT negative i.e as the income of the consumer increases the demand for the GOOD falls and vice-versa.

Discussion

6714.	An infinitely elastic supply curve is parallel to the price axis.
Answer» Solution :False.Infinetely ELASTIC supply curve means that at the same price, QUANTITY KEEPS on increasing. So, Infinitely elastic supply curve is PARALLEL to the quantity AXIS (X-axis) and not to price axis (Y-axis).

Discussion

6715.	Define demand for a good
Answer» Solution :DEMAND is the QUANTITY of a commodity that a consumer is willing and ABLE to buy, at each possible PRICE during a given period of time.

Discussion

6716.	What causes an upward movement along a demand curve of a commodity ?
Answer» SOLUTION :RISE in the PRICE of GOOD.

Discussion

6717.	A budget set is a collection of such bundles of goods that give same satisfaction.
Answer» ANSWER :A::B::C::D

Discussion

6718.	The demand for normal good ______ with an increase in income of the consumer.
Answer» INCREASES Decreases Remains same Either increases or decreases Answer :A

Discussion

6719.	Unemploymet is reduced due to the meaures taken by the government. State its economic value in the context of production in possibilities frontier.
Answer» Solution :The economic VALUE of REDUCTION in unemployment is that it will help the ECONOMY in realizing its production POTENTIAL.

Discussion

6720.	Explain with the help of diagrams, the effect of following changes on the supply of a commodity: (i) Change in the price of other goods (ii) Change in the prices of inputs (iii) Change in the state of technology (iv) Change in taxation policy (v) Change in the number of firms
Answer»

Discussion

6721.	A good is inferior good for one and at the same time, normal good for another consumer. Do you agree? Explain.
Answer» Solution :It is true as it is the income of a CONSUMER which determines whether the good is INFERIOR or normal. A good which is a normal good for the consumer having LOWER income, may BECOME an inferior good for the consumer having HIGHER income.

Discussion

6722.	Which economic problem involves selection of category of people who will ultimatly consume the goods?
Answer» How to produce For whom to produce What to produce None of these. Solution :B. For Whom to Produce: This problem is concerned with the distribution of income in an economy. It is concerned with whether to produce goods for high-income groups or low-income groups. The capacity of people to pay for goods DEPENDS upon their level of income. Thus, this problem is concerned with distribution of income among factors of production who CONTRIBUTE in the production process.It has two ASPECTS :(i) Personal distribution: It means how the national income of an economy is distributed among different groups of people in the society.(ii) FACTORIAL distribution: It RELATES to income share of different factors of production such as wages for labour, interest for capital, rent for land etc.

Discussion

6723.	Government introduces a new tax on production of cigarettes causing hike prices. What impart it will have on different sets of consumers ? What is the rationale behind imposition of tax by the government ?
Answer» Solution :SINCE, cigarette smoking is injurious to health, government has imposed this tax with a vew to discourage the DEMAND of cigarettes among consumers. However the imposition of this tax would be dfferent on different sets of consumers. Demand would fall for those consumers whose demand for cigarettes is ELASTIC. Demand would not change for those consumers who are habituated towards it implying INELASTIC demand for CIGARETTERS.

Discussion

6724.	Identify positive or normative statements from the following : Prices have been rising in India
Answer» SOLUTION :POSITIVE STATEMENTS because it is FACT

Discussion

6725.	If a fall in price of Good X leads to a rise in demand for Good Y, then X and Y are substitude goods.
Answer» Solution :In case of SUBSTITUDE goods, fall in price of ONE good reduces the DEMAND for ANOTHER good. X and Y are COMPLEMENTARY goods and not substitude goods.

Discussion

6726.	Define fixed cost. Give an example. Explain with reason the behaviour of AFC as output is increased.
Answer» Solution : fixed costs are defined as EXPENSES that do not change as a function of the activity of a business, within the relevant period. For EXAMPLE, a retailer must pay rent and UTILITY bills irrespective of sales. It shows that AFC DECREASES as output increases. It is a rectangular HYPERBOLA curve. It means that the product of AFC and output is equal to TFC which remains constant at all levels of output.

Discussion

6727.	The demand curve of a good shifts from DD' to dd' This shift can be caused by : (Choose the correct alternative)
Answer» FALL in the PRICE of the good rise in the price of the good rise in the price of SUBSTITUTE goods rise in the price of COMPLEMENTARY goods Answer :C

Discussion

6728.	If average revenue curve is a horizontal straight line, then marginal revenue curve will be :
Answer» Downward SLOPING Horizontal STRAIGHT LINE Upward Sloping INVERSELY S-shaped Solution :N/A

Discussion

6729.	Explain the difference between cardinal utility and ordinal utility. Give example
Answer» SOLUTION :Cardinal utility is the utility wherein the satisfaction derived by the consumers from the consumption of GOOD or service can be measured NUMERICALLY. For example, utility derived from the consumption of a glass of milk is 3 utils.Ordinal utility states that the satisfaction which a consumer derives from the consumption of product or service cannot be measured numerically.For example, a glass of milk is RANKED 1st while a glass of soda is ranked 2nd.

Discussion

6730.	Define marginal cost. Explain its relations with average variable cost.
Answer» Solution :The COST added by producing one ADDITIONAL unit of a product or SERVICE. If the average cost falls due to an increase in the output, the marginal cost is LESS than the average cost. If the average cost rises due to an increase in the output, the marginal cost is more than the average cost. Marginal cost is EQUAL to the average cost when the marginal cost is minimum.

Discussion

6731.	Define short-run production function.
Answer» SOLUTION :Short-run production function REFERS to a SITUATION when output is INCREASED by changing only one input while keeping other INPUTS unchanged.

Discussion

6732.	Average income of 50 families is Rs. 3,000. Of these average income of 12 families is Rs. 1,800. Find out the average income of the remaining families.
Answer» Answer :Average INCOME of the REMAINING FAMILIES = Rs. 3,378.95

Discussion

6733.	What is the importanve of elasticity of demand .
Answer» Solution :The practical IMPORTANCE of `P.e_(D)` can be made clear with the help of following point., 1. Importance for a producer if demand for his product is inelastic, he will keep price high to earn maximum profit. if dd is elastic, he would fix a lower price. 2. Improtance to a monopolist The CONSUMERS for whom deamand is inelastic, can be charged a higher price. the consumers for whom dd is elastic , can be charged relatively lower price. 3. Importance for formulating govt, policies. Government can impose higer taxes on goods with inelastic dd ( specially for RICH class so that burdento taxation falls on this class) low rate of taxes can be IMPOSED on commodities which have elastic demand. 4. Useful in determination of factor pricing The factors having inelastic demand can obtain a higher price. Factors having elastic having elastic demand can obtain lower price. 5. Useful in international trade If demand for the good in other countries is inelastic, higher price can be fixed, If demand for the good in other countires is elastic the exporting COUNTRY will have to fix lower price.

Discussion

6734.	Production function refers to functional relationship between inputs and ________.
Answer» cost output revenue profit. Answer :B

Discussion

6735.	Discuss in brief the following concepts: (i) Indifference curve: (ii) Indifference map, (iii) Marginal rate of substitution, (iv) Monotonic Preferences, (v) Budget Line, (vi) Budget Set.
Answer»

Discussion

6736.	Weight of 15 persons is as follows: {:("Weight(kg)",20,28,34,39,42,50,53,54,59,64,72,74,74,78,79):} Find out mean weight, using Direct Method as well as Short-cut Method.
Answer» ANSWER :WEIGHTED MEAN = 54.67 KG

Discussion

6737.	If the proportionatechangein thequantitysuppliedof a commodityis lessthantheproportionatechangein itsprice, price elasticityis greater than unity.
Answer» SOLUTION :FALSE: In such a CASE, PRICE elasticityis LESSTHAN unity.

Discussion

6738.	When does MR curve falls below AR curve ?
Answer» SOLUTION :When AR CURVE is FALLING.

Discussion

6739.	What does production possibility curve look concave to the origin?
Answer» Solution :PRODUCTION possibility curve LOOKS concave looks concave to the ORIGIN because of increasing marginal rate of transformation.

Discussion

6740.	Find out the values of TP and MP : \|{:("Variable Factor",1,2,3,4,5),("AP (in units)",8,10,8,6,4):}\|
Answer» SOLUTION :

Discussion

6741.	Why does the problem of' what to produce' arise ? Explain.
Answer» Solution :It arises because resources are SCARCE and have alternative USES. Since many GOODS and services can be produced form these resources, the PROBLEM is that which of these should be produced.

Discussion

6742.	Using diagram, discuss the effect on equilibrium price and quantity in the following cases: (i) Increase in supply (ii) Decrease in supply. (iii) Change in demand. (iv) Increase in demand is equal or less than or more than increase in supply (v) Decrease in demand is equal to or less than or more than decrease in supply (vi) Change in demand when supply when supply is perfectly elastic. (vii) Change in demand when supply is perfectly inelastic ltrbgt (viii) Change in supply when demand is perfectly elastic. (ix) Change in supply when demand is perfectly inelastic
Answer»

Discussion

6743.	The word "economy" standsfor:
Answer» (a) Government institutions (B) People (C) Income earning ACTIVITES of the people (d) all of the above Answer :C

Discussion

6744.	Which of the following is an assumption of Prduction Possibility Frontier?
Answer» Resource ar not FULLY employed. Resouces ar not EQUALLY EFFICIENT for production of the two goods. Resource ar not efficiently employed. Resource available are not fixed. Answer :B

Discussion

6745.	What is production ?
Answer» Solution :Production is the PROCESS of converting raw material into useful things. Things BECOME useful when they ACQUIRE utility VALUE in the process of production.

Discussion

6746.	Define a budget line.
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.

Discussion

6747.	Market demand curve is obtained by ______ summation of the individual demand curves.
Answer» Vertical Horizontal Both (a) and (B) NEITHER (a) or (b) ANSWER :B

Discussion

6748.	If productivity of a commodity improves due to technological upgradation, then equilibrium price tend to increase.
Answer» Solution :IMPROVEMENT in PRODUCTIVITY will INCREASE the supply of the COMMODITY, which will REDUCE the equilibriurm price.

Discussion

6749.	Mollie derives total utility of 10 utils after having 4 mangoes and total utility on consuming 5 mangoes is 9. What is her marginal for the 5^(th) mango ?
Answer» `+1` UTIL `0`util `-1` util `9` utils Answer :C

Discussion

6750.	which of het following types of market structure isthe exact opposite of perfect competition?
Answer» MONOPOLY Competition Monopoly Duopoly Oligopoly Solution :N/a

Discussion

Explore topic-wise InterviewSolutions in .

Explain the changes that take place in total product and marginal product under increasing returns to a factor.

Which of the following are titles of the rows of a table?

Distinguish betweeen perfect oligopoly and imperfect oligopoly. Also explain the "interdependence between the firm" features of oligopoly

Distinguish between census and sample surveys. List four important types of sampling method. Explain the reasons for preparing sample surveys in the collection of Statistic.

_________ mean is the simplest measure of central tendencies. (Arithmetic/Geometric)

Explain the concept of a production function.

Who is a producer?

What is meant by production ?

All the curves except"______" are U shaped curves :

Explain any three sources of restricted entry under monopoly

Can an economy operate outside PPC with given resources and technology ?

What do you mean by inferior good?

An infinitely elastic supply curve is parallel to the price axis.

Define demand for a good

What causes an upward movement along a demand curve of a commodity ?

A budget set is a collection of such bundles of goods that give same satisfaction.

The demand for normal good ______ with an increase in income of the consumer.

Unemploymet is reduced due to the meaures taken by the government. State its economic value in the context of production in possibilities frontier.

Explain with the help of diagrams, the effect of following changes on the supply of a commodity: (i) Change in the price of other goods (ii) Change in the prices of inputs (iii) Change in the state of technology (iv) Change in taxation policy (v) Change in the number of firms

A good is inferior good for one and at the same time, normal good for another consumer. Do you agree? Explain.

Which economic problem involves selection of category of people who will ultimatly consume the goods?

Government introduces a new tax on production of cigarettes causing hike prices. What impart it will have on different sets of consumers ? What is the rationale behind imposition of tax by the government ?

Identify positive or normative statements from the following : Prices have been rising in India

If a fall in price of Good X leads to a rise in demand for Good Y, then X and Y are substitude goods.

Define fixed cost. Give an example. Explain with reason the behaviour of AFC as output is increased.

The demand curve of a good shifts from DD' to dd' This shift can be caused by : (Choose the correct alternative)

If average revenue curve is a horizontal straight line, then marginal revenue curve will be :

Explain the difference between cardinal utility and ordinal utility. Give example

Define marginal cost. Explain its relations with average variable cost.

Define short-run production function.

Average income of 50 families is Rs. 3,000. Of these average income of 12 families is Rs. 1,800. Find out the average income of the remaining families.

What is the importanve of elasticity of demand .

Production function refers to functional relationship between inputs and ________.

Discuss in brief the following concepts: (i) Indifference curve: (ii) Indifference map, (iii) Marginal rate of substitution, (iv) Monotonic Preferences, (v) Budget Line, (vi) Budget Set.

Weight of 15 persons is as follows: {:("Weight(kg)",20,28,34,39,42,50,53,54,59,64,72,74,74,78,79):} Find out mean weight, using Direct Method as well as Short-cut Method.

If the proportionatechangein thequantitysuppliedof a commodityis lessthantheproportionatechangein itsprice, price elasticityis greater than unity.

When does MR curve falls below AR curve ?

What does production possibility curve look concave to the origin?

Find out the values of TP and MP : |{:("Variable Factor",1,2,3,4,5),("AP (in units)",8,10,8,6,4):}|

Why does the problem of' what to produce' arise ? Explain.

The word "economy" standsfor:

Which of the following is an assumption of Prduction Possibility Frontier?

What is production ?

Define a budget line.

Market demand curve is obtained by ______ summation of the individual demand curves.

If productivity of a commodity improves due to technological upgradation, then equilibrium price tend to increase.

Mollie derives total utility of 10 utils after having 4 mangoes and total utility on consuming 5 mangoes is 9. What is her marginal for the 5^(th) mango ?

which of het following types of market structure isthe exact opposite of perfect competition?