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6751.

Why is the number of firms small of an oligopoly market? Explain

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Solution :The main reason for small number of FIRMS under oligapoly is the 'Barriers to Entry', which prevent entry of new firms to the industry Patents, requirement of large capital, control over cruclal raw materials epic are some of the other reasons, which prevent new firms from entening into industry As a RESULT, there ANP fow firms in an OLIGOPOLY market.
Discussion
6752.

which features of monopolistic competition are monopolistic in nature?

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SOLUTION : (i) PRODUCT diffierentiation (II) DOWNWARD sloping AR and MR curves..
Discussion
6753.

Market period is a timeperiodduringwhich :

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Rigtward shift in supplu curves
Leftward shift in supply curve
Expansion in supply
Contraction insupply

SOLUTION : The market period is a very short period in which the supply of a commodity is FIXED. It is the variations in demand that determine the price in such a market period. The TIME period is so short that supply is not responsive to demand. Thus , there is a leftward shift in supply of a commodity and the correct OPTION is (B).
Discussion
6754.

How is price = demaned = MR, under perfect competition ?

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Discussion
6755.

What is revenue in microeconomics ? State the relation between marginal revenue and average revenue under perfect competition using usitable diagram or schedule OR Dfine supply. Distinguish between ''increase in supply'' and ''extension in supply''

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Solution :REVENUE refers to the AMOUNT RECEIVED by a firm from the sale of a given QUANTITY of a commodity in the market.

OR
Supply refers to quantity of a commodity that a firm is willing and able to offer for sale at a given price during a given PERIOD of time.
Discussion
6756.

When a consumer has got equality between marginal utility and price for a good, what is this condition known as ?

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SOLUTION :CONSUMER EQUILIBRIUM.
Discussion
6757.

Discuss the importance of the following factors in determing the nature of the market you have studied: (a) Number of firms, Selling costs, (c ) Price Discrimination, (d) Interdependence of firms.

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Solution :(a) When the number of firms is very large, it is a CASE of perfect COMPETITION. When the number of firms is no as large as under perfect competition, the situation is that of monopolistic competition. When there are only a few firms in THEMARKET, it is a case of oligopoly. When there is only one firm in the market,it is a case of monopoly
(b) Heavy selling cost arise under oligopoly and monopolistic competion. Under monopoly low selling costs are incuried for INFORMATIVE purposes only and there is no selling cost are incurred for information purpose only by and there is no selling cost under perfect competition,
(c )Price discrimination is possible only under monopoly
(d) The interdependence of firms is a characteristic which beiangs to oligopoly
Discussion
6758.

Draw a production possibility curve and show the following situtions: (i) Fuller utillsation of resources, (ii) Economic growth, (iii) Decrease in resources, (iv) Under utilisation of resources

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Discussion
6759.

In case of _____ the points are joined using a foot-rule. (frequency polygon/ frequency curve)

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SOLUTION :FREQUENCY POLYGON
Discussion
6760.

Why does the government of India fix 'support price' for some crops? Explain.

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SOLUTION :For some CROPS, fall in PRICE below a certain level is not GOOD for the farmers. Hence, the government fixes minimum price for these crops.
Discussion
6761.

Total fixed cost curve is a vertical straight line, parallel to Y-axis.

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Solution :FALSE. TFC curve is a horizontal STRAIGHT LINE parallel to the X-axis
Discussion
6762.

What are the reasons for shift in supply curve?

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Solution :The reasons for shift in supply curve are as follows :
(i) Change in price of related goods. ltbr. (II) Change in price of factors of PRODUCTIONS.
(iii) Change in state of technology.
(IV) Change in excise tax rate.
(v) Change in the number of FIRMS.
Discussion
6763.

Market for a good is in equilibrium. There is simultaneous ''decrease'' both in demand and supply but there is no change in market price. Explain with help of a schedule how it is possible.

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Solution :A simultaneous decrease in both demand and supply may not influence the market PRICE. This can be illustrated with the help of following SCHEDULE:

As seen in the GIVEN table, INITIALLY, the equilibrium (market) price is RUPEE 6 per unit and the equilibrium demand and supply is rupee 60 units.
When both demand and supply decrease by 10%, then both demand and supply fall from 60 units to 54 units. It means, at market price of rupee 6, both demand and supply are equal. So, a simultaneous decrease in both demand and supply may not change the market price.
Discussion
6764.

Average fixed costs:

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Remainsame at all LEVELS ofoutput
Increase as OUTPUT INCREASES
Decreases as output increases
Initially increases and thendecreases

Solution :N//A
Discussion
6765.

What is mean by price being rigid ? How can oligopoly behaviour lead to such an autcome ?

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SOLUTION :Rigid prices means that even if cost or demand changes there will be no change in the PRICE of the commodity. Oligopoly behaviour LEADS to such rigid prices because firms try to avoid price competition, OTHERWISE there will be price wars.
Discussion
6766.

Which of the following diagram correctly depicts the relation between AR and MR when price falls with rise in output ?

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SOLUTION :N/A
Discussion
6767.

Whichone ofthe followingis nota determinat of Individulasupply ?

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Price of the commodity
taxation policy
STATE oftechnology
No. of FIRMS

Solution :As there is only one firm supplying the good, the number of firms is not a DETERMINANT of individual SUPPLY.
Discussion
6768.

Withdrawl of subsidy on LPG has increased its price. The production of LPG cannot be increased due to scarcity of resources. Suggest how in two ways the probles of scarcity of LPG can be solved?

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Solution :(i) We should make judicious use of this scarce RESOURCE by OPTIMISING its USAGE and avoiding wastage.
(ii) Establishing bio-gas plants to SUPPLY biogas (METHANE) for cooking purposes.
Discussion
6769.

Define cost or What does cost mean in economics?

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Solution :An AMOUNT that has to be paid or given up in order to GET something. In business, cost is usually a monetary valuation of (1) effort, (2) material, (3) RESOURCES, (4) time and utilities consumed, (5) risks incurred, and (6) opportunity forgone in production and delivery of a good or service.Economic cost is the combination losses of any GOODS that have a value attached to them by any one individual. Economic cost is used mainly by economists as MEANS to compare the prudence of one course of action with that of another.
Discussion
6770.

What is meant by mean deviation? What are the methods to calculate it? Give its merits and demerits.

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Solution :MEAN deviation is the arithmetic average of the deviations of all the values taken from some average value (mean, MEDIAN, mode) of the series, ignoring signs ( + or - ) of deviations.
Merits :-
1. SImple.
2. BASED on all values.
3. LESS effect on EXTREME Values.
Demerits :-
1. Inaccuracy.
2. Not capable of Algebraic Treatment.
3. Unreliable.
Discussion
6771.

Price Elasticity of Demand of a good is (-) 3 it shows that:

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When PRICE falls by 1% demand rises by 3%
when price rises by 1% demand its falls by 3%
EITHER a or b
Neither a nor b

Solution :N/a
Discussion
6772.

Give meaning of "Returns to a Factor".

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Solution :Returns to factor REFERS to the resultant INCREASE in the total product when only ONE factor is increased, KEEPING all other factors fixed.
Discussion
6773.

How will a consumer react when he finds that MRS_(XY) lt (P_(X))/(P_(Y))?

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<P>

Solution :The CONSUMER will start buying more of Y and LESS of X till `MRS_(XY) = (P_(X))/(P_(Y))`
Discussion
6774.

In the long run, equilibrium price is equal to

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AR
AC
MR
none of these.

Answer :B
Discussion
6775.

Mention the situation in which an increase in demand will lead to rise in equilibrium quantity, but no change in equilibrium price.

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Solution :When the SUPPLY is perfectly ELASTIC, an INCREASE in DEMAND will just lead to an increase in equilibrium qunatity demanded but there will bo no change in equilibrium PRICE.
Discussion
6776.

the demand for meals at a medium- priced restaurant is elastic. If the management of the restaurant is considering raising prices, it can expect a relatively:

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PROPORTIONATELY LARGE fallin quantity demanded
No CHANGE in quantity demanded
Proportionately small FALL in quantity demanded
infinite change in quantity demanded

Solution :N/a
Discussion
6777.

When MP is zero, what can you say about TP?

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TP is increasing
TP is MAXIMUM
TP is falling
None of these

Solution :B. When MP is ZERO, TP is maximum.
Discussion
6778.

Multiple bar diagrams are those diagrams which show…………..sets of data simultancolusly. (one or more/two of more)

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SOLUTION :TWO or more
Discussion
6779.

Energy like electricity is scarce and can be used for various purposes like cooking, heating, lighting etc. What would be the problem when chosen for one use_________.

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Solution :The PROBLEM is that when chosen for one use, the other use of ELECTRICITY will have to be either rejected or POSTPONED due to its SCARCITY.
Discussion
6780.

if (DeltaP)/P =0.2 and price elasticity is (-) 2. calculate the percentage fall in demand. Also calculate the original expenditure if new expenditure is₹ 180 at price of₹ 6.

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SOLUTION :N/a
Discussion
6781.

"The demand curve of a commodity will not obey the law of demand, i.e., it will not slope downwards if there is a rise in the price of substitute goods". Comment.

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Solution :The given statement is correct. With rise in PRICE of substitutes, the demand CURVE of the commodity MAY not OBEY the law of demand because demand curve is drawn on an assumption that there is not change in other determinates of demand.
Discussion
6782.

Define perfect competition.

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Solution :It refers to a MARKET situation where there are very large number of buyers and selles dealing in a HOMOGENEOUS product at a PRICE FIXED by the industry. The firm is a price TAKER.
Discussion
6783.

Why does the budget line slope downward ?

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SOLUTION :BUDGET line SLOPES downward because with the GIVEN money income, more of one GOOD can be bought only by decreasing some units of the other good.
Discussion
6784.

Arrange the following coefficients of price elasticity of demand in ascending order: -0.7, -0.3, -1-1, -0.8.

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Solution :Ascending Order : -0.3,-0.7,-0.8,-1.1 ( minus SIGN only repersents the INVERSE RELATION between price and quantity demanded)
Discussion
6785.

Cut of 1st,2nd and 3rd phases, which phase of production will the producer stop at ? Or Till which point should a producer keep increasing the variable factor to get maximum profit ?

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Answer :The producer will not stop in phase I, as by employing an additional unit of variable FACTOR marginal product increases, so he will continue to produce as there is SCOPE for additional profits.
The producer will not enter phase III of production as by employing an additional unit of variable factor, TP decreases and MP is negative implying LOSSES.
THUS, the producer will stop in phase II as producer will find his equilibrium when TP is maximum and constant and MP becomes zero. Though MP falls but still positive addition is made to TP and the producer is ABLE to obtain a bigger TP compared to TP in the first phase.
Discussion
6786.

Define unitary elastic demand and draw a demand curve for it. What is the significance of a unitary elastic demand curve ?

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SOLUTION :N/a
Discussion
6787.

Data represented through arithmetic line graph help in understanding: (i) long term trend(ii) cyclicity in data (iii) seasonality in data(iv) all of the above

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SOLUTION :i) LONG TERM TREND
Discussion
6788.

When is a firm called 'price-taker' ?

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Discussion
6789.

Children are the future policy makers of our country. However, many of the poor children are ill-trearted and are forced to work at a tender age. Discuss the steps that need to be taken to reduce child labour?

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Solution :The following steps can be taken to reduce child labour:
(i) GOVERNMENT should take SERIOUS steps against employers who hire child labour.
(ii) Government should be MAKE education compulsory and accessible to the poorest of the poor.
Discussion
6790.

Draw the AR curve of a firm under (i) Monopoly and (ii) Perfect competition. Explain the difference in these curves, if any.

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Solution :
DEFFERENCE. AR curve in perfect COMPETITION is perfectly elastic due to uniformity in price WHEREAS in monopoly, it is less elastic and downward sloping due to reduction in price.
Discussion
6791.

When does government intervene to fix minimum price of a commodity (Price floor) ?

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Solution :Government resorts to price floor when the market equilibrium price is considered to be unremunerative for the producers which doesnot PROVIDE incentives to the producers to expand their PRODUCTION. Government in order to PROTECT the interest of producers announces the minimum price of the commodity to provide reasonable prices to the producers or farmers for certain agricultural goods and increase their income. Unsold surplus of goods is bought by the government. In India food corporation of India on behalf of the government producers surplus of wheat and rice production CREATED as a result of fixation of minimum SUPPORT prices of wheat and rice.
Discussion
6792.

On what type of goods, Maximum Price Ceiling is normally imposed by the government?

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Solution :MAXIMUM Price Ceiling is normally imposed by the GOVERNMENT on GOODS needed by masses, like wheat, RICE, sugar etc.
Discussion
6793.

Explain producer's equilibrium in terms of total cost and total revenue.

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SOLUTION : the OUTPUT level at which the total revenue MINUS the total cost is MAXIMUM is the equilibrium level of the output.Producer will be in equilibirium when the difference between TR and TC is maximum.
Discussion
6794.

State two characteristics of the economic resources which give rise to economic problem.

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SOLUTION :(i) Economic RESOURCES are scarce, (ii) Economic resources have ALTERNATIVE uses.
Discussion
6795.

What is tabulation? Describe functionsal parts of a statistical table. Draw the specimen of a tabel.

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SOLUTION :N/a
Discussion
6796.

At a particular level of output, a producer finds that MC gt MR. What will a producer do to maximise his profit ?

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Solution :All profit-maximizing FIRMS produce where their MARGINAL cost (MC) (the cost of producing ONE more unit) is equal to their marginal revenue (MR) (the revenue received from selling an ADDITIONAL unit). This MR=MC rule is the same for MONOPOLISTS as is it is for perfectly competitive firms
Discussion
6797.

What is mean by average variable cost ?

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SOLUTION :Average variable COST REFERS to the per unit variable cost of production.
Discussion
6798.

Marginal revenue is zero when every additional unit is sold at the same price.

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SOLUTION :False : In such CASE, marginal revenue = AVERAGE revenue (or PRICE).
Discussion
6799.

It is expected that replacement of all existing taxes on good X by the proposed single Goods and Services Tax (GST) will bring down overall tax on good X substantially. Explain its likely chain of effects on price and quantity of good X. Use diagram.

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Solution :With DECREASE in overall taxes, keeping other factors constant, TOTAL supply in the market willl increase due to reduction in the cost of production. It will LEAD to EXCESS supply. This leads to COMPETITION among sellers, which reduces the price. Fall in price leads to decrease in supply and rise in demand. These changes continue till supply and demand become equal at a new equilibrium price. As there is an increase in supply only, equilibrium quantity will rise, but equilibrium price will fall.
Discussion
6800.

What is perfect oligopoly ?

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Discussion