7498 + Interview Questions in Economics in Class 11 Page 141 InterviewSolution

7001.	Multiple bar diagrams are those diagrams which show two or more seta of data simulaneously. (True/False)
Answer» SOLUTION :TRUE

Discussion

7002.	Why does an economic problem arise? Explain the problem of ‘how to produce?
Answer» Solution :Central problems of an economy arise due to the following reasons : (a) Limited or Scarce Resources: Resources are scarce in relation to our wants and economy cannot produce all what PEOPLE want. It is the principal REASON for existence of economic problems in all economies.problem of how to produce-This STUDIES how to organise production. It is the second basic economic problem of resource allocation.It is concerned with the choice of technique production. For EXAMPLE, production of cloth is possible either by handlooms or by MODERN machines.This problem is concerned with the efficient use of resources which implies more production with low cost.Thus, one needs to decide the efficient technique of production which uses the least amount of scarce resources to provide the same amount of output.

Discussion

7003.	What is the difference between histogram and frequency polygon?
Answer»

Discussion

7004.	If a household buys more of a commodity due to rise in income, then the given commodity must be an inferior one.
Answer» SOLUTION :The GIVEN COMMODITY will be a NORMAL GOOD.

Discussion

7005.	Distinguish between perfect competition and monopolistic competition.
Answer» Solution :~Perfect Competition: The product is homogeneous, i.e. it is identical in all respects LIKE size, shape, quality, etc.Monopolistic Competition: The product is differentiated on the BASIS of brand, size, color, shape,etc.~Perfect Competition: No selling costs are incurred as buyers and sellers have perfect KNOWLEDGE about market conditions.Monopolistic Competition: Heavy selling costs are incurred on sales promotion due to lack of perfect knowledge among buyers and sellers.~Perfect Competition: Firm is a price taker as price is determined by the industry.Monopolistic Competition: Firm has partial control over price due to product differentiation.~Perfect Competition: Buyers and sellers have perfect knowledge about market conditions.Monopolistic Competition: Buyers and sellers do not have perfect knowledge due to product differentiation and selling costs incurred by sellers.~Perfect Competition: Demand curve is perfectly ELASTIC as price REMAINS the same at all levels of output.Monopolistic Competition: Demand curve slopes downwards as more output can be sold only at less price.

Discussion

7006.	Which of the following is not a characteristic of a price taker firm?
Answer» `TR=PxxQ` `AR="PRICE"` NEGATIVELY sloped demand curve Marginal Revenue=Price Solution :N/a

Discussion

7007.	X and Y are complementary goods. The price of Y falls. Explain the chain of effects of this change in the market of X.
Answer» Solution :A fall in PRICE of Y lead to an increase in demand of good X. As a result, the demand curve for X will SHIFT RIGHTWARDS. The increase in demand leads to competition among buyers causing a PUSH in the market price. The increased price leads to an increase in the qunatity suppied and a fall in quantity demanded leading to a new equilibrium where both the price and quantity demanded of X are higher.

Discussion

7008.	Explain the effect of 'Maximum Price Celling' on the market of a good. Use diagram
Answer» Solution :Maximum Price Ceiling refers to imposition of UPPER limit on the price of a good by the government. For example, in the diagram, OP is Price Ceiling, while equilibrium price is `OP_(1)`. At this price, the PRODUCERS are WILLING to supply only `PA (Or OQ_(1))`, while consumers demand `PB (Or OQ_(2))`. The effect of the ceiling is that shortage, EQUAL to `AB (Q_(1)O_(2))`, is created, which may further lead to BLACK marketing.

Discussion

7009.	What is a price make firm?
Answer» SOLUTION :A PRICE MAKERS firm is a firm which is in a position to determine the MARKET price of the product on its own.

Discussion

7010.	Define budget set
Answer» SOLUTION :A budget set or opportunity set includes all possible CONSUMPTION bundles that someone can afford given the PRICES of goods and the PERSON's income level. The budget set is BOUNDED above by the budget line.

Discussion

7011.	Can there be an economy without central problems?
Answer» Solution :No, as in all economics MEANS are scarce in RELATION to WANTS.

Discussion

7012.	The pricipal component of a table is:
Answer» table NUMBER title head note all of these Solution :D

Discussion

7013.	Define derived table.
Answer» Solution :A derived table is that in which data are not PRESENTED in the FORM in which these are collected. INSTEAD the data are first CONVERTED into ratios of PERCENTAGE and then presented.

Discussion

7014.	What does the area under the marginal cost curve show ?
Answer» Solution :AREA under the MARGINAL cost CURVE shows total VARIABLE cost.

Discussion

7015.	When MR is negative TR_________.
Answer» ANSWER :DECRESES

Discussion

7016.	Find equilibrium for a producer if :
Answer» 2 units 5 units 4 units 3 units Answer :B

Discussion

7017.	Which of the followingis true with respect to relationship between AC and MC?
Answer» When `MC GT AC`, AC falls AC CURVE intesects MC curve at minimum MC MC curve intersects AC curve at minimum AC When MC LT AC, ATC` rises Solution :N//A

Discussion

7018.	Calculate the marginal opportunity cost (MOC) of commodity X for the given combinatons: {:("Commodity X",0,1,2,3,4,5),("Commodity Y",100,95,85,70,50,25):}
Answer» Answer :(MOC;-; 5;10;15;20;25)

Discussion

7019.	What is efficient technique of production ?
Answer» Solution :EFFICIENT TECHNIQUE is the one which produces maximum at MINIMUM COST.

Discussion

7020.	Discuss the effect of: (i) Clean India Mission, or (ii) Outflow of Foregn Capital, or (iii) Make in India, or (iv) Edcution for All campagin or any other activity on Production Possibility Frontier.
Answer»

Discussion

7021.	Give the relationship between AVC and MC.
Answer» Solution :(i) When MC LT AVC, AVC FALLS. (ii) When MC = AVC, AVC is at its minimum point. (III) When MC gt AVC, AVC rises. (iv) MC increases at a faster rate as COMPARED to AVC.

Discussion

7022.	So long as Average product is increasing:
Answer» MARGINAL PRODUCT is falling Marginal product is rising Marginal product is greater than average product Marginal product is SMALLER than average product Answer :C

Discussion

7023.	In thefollowing frequency distribution, the frequency of the class interval (40-50) is not known. Find it, if the arithmetic mean of the distribution is 52. {:("Wages(Rs.)",10-20,20-30,30-40,40-50,50-60,60-70,70-80),("Number of Workes"," "5," "3," "4," "?," "2," "6," "13):}
Answer» Solution : `BARX=(sumfm)/(sumf)` `52=(1,765+45f)/(33+f)` `Or, 52(33+f)=1,765+34f` `1,716+52f=1,765+45f` `52f-45f=1,765-1,716` `rArr""7f=49` `rArr""f=7` MISSING FREQUENCY =7.

Discussion

7024.	Define Production Possibilities Curve. Explain why it is downward sloping from left to right.
Answer» Solution :PPC is the curve which shows the combinations of two GOODS and services that can be PRODUCED with fuller the utilisation of a GIVEN amount of resources in the most efficient way and with a given production technology.PPC curve is downward sloping from LEFT to right. This is because the production of every additional unit of one GOOD, more and more units of other goods has to be sacrificed.

Discussion

7025.	Suppose the demand and supply curves of a Commodity-X is given by the following two equations simultaneously : Qd = 200-P""Qs=50+2P (i) Find the equilibrium price and equilibrium quantity. (ii) Suppose that the price of a factor of production producing the commodity has changed, resulting in the new supply curve given by the equation : Qs'=80+2P. Analyse the new equilibrium quantity as against the original equilibrium price and equilibrium quantity.
Answer» Solution :Equilibrium price and equilibrium quantity are determined at a POINT where quantity demanded is equal to quantity supplied `Qd=200-P"(given)and"Qs=50+2P"(given)"` At equilibrium : Qd = Qs Hence `200-P=50+2P"or"3P=150""P=50` `therefore` Equilibrium price = 50 and equilibrium quantity `= 200 - 50 "or"50+(2xx50)` `=150"unitsor"=150 "units"`. (II) If the price of factor of production has changed and NEW supply curve is 80 + 2P then at equilibrium : Qd = Qs `200-P=80+2P"or"3P=120""P=40` `therefore` Equilibrium price = 40 and equilibrium quantity =`200-40"or"80+2(40)` =160 unitsor=160 units. Thus as the equilibrium price falls from Rs.50 toRS.40, equilibrium quantity rises from 150 units to 160 units.

Discussion

7026.	Arithmetic line-graphs are also known as:
Answer» LINEAR graphs non-linear graphs time SERIES graphs none of these Solution :C

Discussion

7027.	Which of the following can be referred to as 'point of satiety?
Answer» MARGINAL UTILITY is NEGATIVE Total Utility is rising Marginal Ulitlity is ZERO Total Utility is falling Answer :C

Discussion

7028.	Inspection method to find out mode is possible only when there is _________ in the seres.
Answer» Solution :Inspection method to FIND out MODE is possible only when there is _homogeneity________ in the SERIES.

Discussion

7029.	Define economics.
Answer» Solution :ECONOMICS is the STUDY of economy issues (or economic problems) arising out of the FACT that resources are scare in relation to our needs/desires and the SCARCE resources have ALTERNATIVE uses.

Discussion

7030.	Discuss the subject matter of economics.
Answer» SOLUTION :The subject-metter of ECONOMICS is MICROECONOMICS and MACROECONOMICS.

Discussion

7031.	What is meant by the problem of allocation of resources?
Answer» SOLUTION :The problem of allocation of RESOURCES arises due to the SCARCITY of resources, and refers to the question of which wants should be SATISFIED and which should be left unsatisfied. In other words, what to produce and how much to produce.

Discussion

7032.	Through the minimum wage legislation the government protects the interest of ________
Answer» SOLUTION :N/a

Discussion

7033.	Explain the changes that take place in total product and marginal product under increasing/diminishingreturns to a factor.
Answer» Solution :The LAW of diminishing returns to a factor states that Marginal Product of a factor initially rises with its employment level, but after a certain level of employment it starts falling and ultimately becomes negative. The total product initially increases at an INCREASING rate, then increases but at a diminishing rate and ultimately starts falling as more and more UNITS of a variable factor are employed.

Discussion

7034.	Which of the following factor(s) are considered when comparision between sampling and census method is made ?
Answer» AREA of SURVEY ACCURACY of data Cost of collection All of these Solution :D

Discussion

7035.	The demand for a commodity always increases with increase in the price of other goods.
Answer» Solution :The demand for commodity will increases with INCREASE in the price of other GOODS, only when such other goods are SUBSTITUTE goods. However, demand for the commodity will FALL with increase in the price of other goods, if such other goods are complementary goods.

Discussion

7036.	Why does government adopt rationing technique ?
Answer» Solution :Price CEILING refers to fixing price below the equilibrium price (as equilibrium price is presumed to be too high). When government intervenes and lowers the price , the quantity demanded exceeds the quantity supplied. This means everyone's demand at this price, cannot be satisfied. Though the intention of the government was to protect the consumer but it would end up creating shortage or the CONSUMERS. So, there has to be rationing- an UPPER limit on the amount which can be purchased within a given time period. The stipulated amount of good is sold through the fair price shops. This also explains why one cannot buy a LARGE quantity at a time from a fair price or ration shop.

Discussion

7037.	An increase in excise tax leads to faill in supply of the given commodity, without any change in its market price.
Answer» SOLUTION :True: It happens becauseincrease in excise tax INCREASES thecostof production and REDUCES the profit MARGIN of that particular commodity. It leads to the fall in supply even at the same market price.

Discussion

7038.	Define Price Ceiling. What is the common purpose for the price ceiling imposed by the government? Explain any one likely consequence of this nature of intervention by the government in the price determination process.
Answer» Solution :Price ceiling refers to fixing the maximum price of a COMMODITY that is lower than the equilibrium price. It is generally imposed on essential ITEMS and necessities. As a result of price ceiling, the market price falls below the equilibrium price leading to excess demand. This often leads to "black marketing" where the GOODS are SOLD at a higher price than the price set by the government.

Discussion

7039.	What is the nature of government inervention which leads to excess supply ?
Answer» Solution :The NATURE of government intervention which leads to excess supply is CALLED price floor. In which, the government intervenes in the market if it feels that the price is too low for the producers to SELL their produce. Government fixes the minimum price which is greater than the equilibrium price on which the producers can sell their GOODS and services. Since, this price is higher than the equilibrium price it creates excess supply on that very level.

Discussion

7040.	Calculate (a) Implicit cost (b) Explicit cost and (c ) Econimic cost from the following: {:(,"Paticulars","(Rs. in Lakh)"),((i),"Payment of salaries",5000),((ii),"Expenditure of raw material",2000),((iii),"Rent of owner occupied building",1000),((iv),"Donations to charitable trust",500),((v),"Estimated value of salary of owner who worked as manager",200),((vi),"Minimum profit (expected)",400),((vii),"Super Normal profit (estimated)",700):}
Answer» Solution :(a) EXPLICIT COST: (i)+(II)=5000+2000=7000 (b) IMPLICIT cost: (III)+(v)+(vi)=1000+200+400=1600 (c ) Economic cost: (a) + (b)=7000+1600=86000

Discussion

7041.	How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other ?
Answer» Solution :TOTAL REVENUE = Price x Quantity.

Discussion

7042.	If MU_(y) = 20, MU_(x) = 60, Price of Y = Rs 4, then what will be the price of X at Equilibrium
Answer» `Rs 14` `Rs 3` `Rs 12` `Rs 4` ANSWER :C

Discussion

7043.	Arithmetic mean makes comparison __________ .(easy/difficult)
Answer» ANSWER :EASY

Discussion

7044.	There are three different supply curves passing through the origin. Curve A makes an angle of 60^(@) Curve B makes an angle of 45^(@) and curve C makes an angle of 30°. What will be the price elasticily of curves A, B and C?
Answer» Solution : All the THREE curves: A, B and C will have unitary elastic SUPPLY as they all are PASSING through the origin.

Discussion

7045.	Explain the percentage method to measure price elasticity of demand with the help of an example.
Answer»

Discussion

7046.	Demand curve of a firm is perfectly elastic under :
Answer» PERFECT COMPETITION Monopoly Monopolistic competition Oligopoly Answer :A

Discussion

7047.	Classification of data on the basis of time period is called:
Answer» GEOGRAPHICAL classification chronological classification qualitative classification quantitative classification Answer :B

Discussion

7048.	Explain why a Production Possibility Curve is: (i) Concave Shaped, (ii) Downward sloping
Answer»

Discussion

7049.	Explain the implications of following features: (i) 'Freedom of entry and exit of firms' under Perfect competition. (ii) 'Large number of buyers and sellers' under Perfect Competition. (iii) 'Homogeneous Product' under Perfect Competition (iv) 'Perfect Knowledge among Buyers and Seller's under Perfect competition. (v) 'Differentiated product' feature of Monopolistic competition
Answer»

Discussion

7050.	(a) What is the effect of technological advancement on supply curve? (b) How can a developing country prepare itself to achieve economic progress ?
Answer» Solution :(b) Production and supply should be increased to achieve economic progress. In ECONOMICALLY backward countries, there is SHORTAGE of resources, so effeorts should be made to USE available resources OPTIMALLY and avoid their wastage and UNUTILISATION.

Discussion

Explore topic-wise InterviewSolutions in .

Multiple bar diagrams are those diagrams which show two or more seta of data simulaneously. (True/False)

Why does an economic problem arise? Explain the problem of ‘how to produce?

What is the difference between histogram and frequency polygon?

If a household buys more of a commodity due to rise in income, then the given commodity must be an inferior one.

Distinguish between perfect competition and monopolistic competition.

Which of the following is not a characteristic of a price taker firm?

X and Y are complementary goods. The price of Y falls. Explain the chain of effects of this change in the market of X.

Explain the effect of 'Maximum Price Celling' on the market of a good. Use diagram

What is a price make firm?

Define budget set

Can there be an economy without central problems?

The pricipal component of a table is:

Define derived table.

What does the area under the marginal cost curve show ?

When MR is negative TR_________.

Find equilibrium for a producer if :

Which of the followingis true with respect to relationship between AC and MC?

Calculate the marginal opportunity cost (MOC) of commodity X for the given combinatons: {:("Commodity X",0,1,2,3,4,5),("Commodity Y",100,95,85,70,50,25):}

What is efficient technique of production ?

Discuss the effect of: (i) Clean India Mission, or (ii) Outflow of Foregn Capital, or (iii) Make in India, or (iv) Edcution for All campagin or any other activity on Production Possibility Frontier.

Give the relationship between AVC and MC.

So long as Average product is increasing:

In thefollowing frequency distribution, the frequency of the class interval (40-50) is not known. Find it, if the arithmetic mean of the distribution is 52. {:("Wages(Rs.)",10-20,20-30,30-40,40-50,50-60,60-70,70-80),("Number of Workes"," "5," "3," "4," "?," "2," "6," "13):}

Define Production Possibilities Curve. Explain why it is downward sloping from left to right.

Arithmetic line-graphs are also known as:

Which of the following can be referred to as 'point of satiety?

Inspection method to find out mode is possible only when there is _________ in the seres.

Define economics.

Discuss the subject matter of economics.

What is meant by the problem of allocation of resources?

Through the minimum wage legislation the government protects the interest of ________

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

Which of the following factor(s) are considered when comparision between sampling and census method is made ?

The demand for a commodity always increases with increase in the price of other goods.

Why does government adopt rationing technique ?

An increase in excise tax leads to faill in supply of the given commodity, without any change in its market price.

Define Price Ceiling. What is the common purpose for the price ceiling imposed by the government? Explain any one likely consequence of this nature of intervention by the government in the price determination process.

What is the nature of government inervention which leads to excess supply ?

How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other ?

If MU_(y) = 20, MU_(x) = 60, Price of Y = Rs 4, then what will be the price of X at Equilibrium

Arithmetic mean makes comparison __________ .(easy/difficult)

There are three different supply curves passing through the origin. Curve A makes an angle of 60^(@) Curve B makes an angle of 45^(@) and curve C makes an angle of 30°. What will be the price elasticily of curves A, B and C?

Explain the percentage method to measure price elasticity of demand with the help of an example.

Demand curve of a firm is perfectly elastic under :

Classification of data on the basis of time period is called:

Explain why a Production Possibility Curve is: (i) Concave Shaped, (ii) Downward sloping

(a) What is the effect of technological advancement on supply curve? (b) How can a developing country prepare itself to achieve economic progress ?