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7051.

A consumer consumes only two goods X and Y. let P_(x) and P_(y) be their prices and Q_(x) and Q_(y). The qunatities of these two goods respectively . Let m be the income. The budget line equationis

Answer»

`P_(X).Q_(x)+P_(y).Q_(x)=m`
`P_(x).Q_(x)+P_(y).Q_(x) GT m`
`P_(x).Q_(x)+P_(y).Q_(x) ge m`
`P_x.Q_(x)+P_(y).Q_(x) le m`

Answer :A
Discussion
7052.

Which of the following is not an essential condition of "Pure Competition"?

Answer»

LARGE NUMBER of BUYERS and sellers
Homogenous Product
Freedom of entry
Absence of TRANSPORT Cost

Solution :N/a
Discussion
7053.

Give the formula for estimating mode in case of continuous series.

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Solution :The following formula is used to calculate the exact value of the MODE in case of continuous series after finding the modal CLASS.
`Z=l_(1)+(f_(1)-f_(0))/(2f_(1)-f_(0)-f_(2))xxi`
Here , Z= Value of the mode , `l_(1)` = LOWER LIMIT of the modal class , `f_(1)` = The frequency of the modal class , `f_(0)` = The frequency of pre- modal class , `f_(2)` =Frequency of the next higher class or post - modal class , i = Size of the modal group.
Discussion
7054.

Can AC and AVC curves touch each other ?

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SOLUTION :No, because difference betweenAC and AVC is AFC and AFC can never be ZERO.
Discussion
7055.

An increase in theprice of Limca mayreduce the supplyof cake .

Answer»

SOLUTION :TRUE:INCREASE in PRICES of Limca (other good of the sameproducer) will makeits productionmore profitable in comparison to Coke ( GIVENCOMMODITY). It will lead to fall in supply of coke as coke and limca are substitute goods.
Discussion
7056.

State the main merits and demerits of range.

Answer»

Solution :Merits :-
1. Simple.
2. Widely used.
Demerits :-
1. Unstable.
2. Not BASED on all values.
3. No knowledge of the FORMATION of the series.
4. Irrelevant for open-ended FREQUENCY DISTRIBUTION.
Discussion
7057.

Demand curve under Oligopoly is

Answer»

LESS Elastic
Perfectly Elastic
Highly Elastic
Interminate

Solution :N/a
Discussion
7058.

Name any two mathematical averages.

Answer»

Solution :The two MATHEMATICAL AVERAGES are:
(i) Arithmetic MEAN, and (II)Geometric mean
Discussion
7059.

State any one assumption for the construction of the curve that shows the possibilities of potential production of two goods in an economy.

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SOLUTION :RESOURCES are FULLY and EFFICIENTLY UTILISED.
Discussion
7060.

Define excess demand.

Answer»

Solution :It REFERS to a SITUATION when the quantity supplied is more than the quantity supplied at the PREVAILING market price.
Discussion
7061.

Explain the price elasticity of demand.

Answer»

Solution :Price ELASTICITY of demand is a measure of DEGREE of responsiveness of demand as a RESULT of change in price of the COMMODITY.
Discussion
7062.

Define price ceiling.

Answer»


SOLUTION :Price Ceiling refers to the maximum price the PRODUCERS are ALLOWED to charge by selling their goods and services. This intervention is USUALLY done in the situations of "shortages" as if not controlled, this may LEAD to high market price of the good.
Discussion
7063.

What is the objective of a producer?

Answer»

SOLUTION :The OBJECTIVE of a producer is ALWAYS to MAXIMISE his profits.
Discussion
7064.

Economic problem arises because:

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(a) RESOURCES are limited
(b) Most resources have ALTERNATIVE USES
(c) Wants are unlimited
(d) All the above

Answer :D
Discussion
7065.

What happens to the difference between Total Cost and Total Variable Cost as output is increased ?

Answer»

SOLUTION :The difference between TotalCostand Total VARIABLE COST remains CONSTANT.
Discussion
7066.

A lot of people died and many resources were destroyed due to floods in Kashmir. How will it affect the PPF of the economy?

Answer»

SOLUTION :PPF of the economy will SHIFTS to the LEFT because the number of possible COMBINATION available with the economy has DECREASED.
Discussion
7067.

State the behaviour of marginal product in the law of variable proportions. Explain the causes of this behaviour.

Answer»

Solution :N/AThe 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.
Reasons behind Phase-1
(i) BETTER utilisation of fixed factor.
(ii) Effecient utilisation of variable factor.
(iii) Better co-ordination between factors.
Reasons behind Phase-2
(i) Over-utilisation of the fixed factor.
(ii) Imperfect Substitution of factors.
(iii) Poor Coordination.
Reasons behind Phase-3
(i) FIXITY of fixed factor.
(ii) Overcrowding of fixed factor.
(iii) DEFECTIVE factor ratio.
Discussion
7068.

Goods X and Y are substitutes. Explain the effect of fall in price of Y on demand for X.

Answer»

Solution :Since good X and good Y are substitues, there exists a POSITIVE RELATIONSHIP between price of good Y and DEMAND for good X. So, with a fall in price of good Y, the demand for good X will ALSO fall.
Discussion
7069.

The difference between total cost and total variable cost falls with increase in output.

Answer»

Solution :False. The DIFFERENCE between total variable COST is total fixed cost, which remains same with INCREASE in OUTPUT.
Discussion
7070.

Complete the following table : |{:("Units of Labout","Average Product","Marginal Product"),("(Units)","(Units)","(Units)"),(1,8,-),(2,10,-),(3,-,10),(4,9,-),(5,-,4),(6,7,-):}|

Answer»

SOLUTION :
Discussion
7071.

A consumer consumes only two goods X and Y with preices rupees 4 and rupees 5 per unit respectively. On making a plan of spending his whole of income he finds MU_(x)=12 utils and MU_(y)=15 utils. The consumer:

Answer»

Is in equilibrium.
Is not in equilibrium nor can REACH equilibrium.
Can reach equilibrium by BUYING LESS of X and more of Y.
Can reach equilibrium by buying more of X and less of Y.

Answer :A
Discussion
7072.

What will happen to PPF if there is technological upgradation in case of both the goods?

Answer»

Rightward SHIFT in PPF
Leftward Shift PPF
Rotation of PPF
None of these.

Solution :A. The basic idea is that anything that causes ECONOMIC output to increase or decrease will shift this CURVE. When the curve SHIFTS outward, or to the right, that means output is increasing. When the curve shifts inward, or to the left, that means output is decreasing. So, if there is TECHNOLOGICAL upgradation in case of both the goods then there will be a Rightward shift in PPF.
Discussion
7073.

Define average revenue .

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SOLUTION :Average REVENUE is the revenue per unit of OUTPUT.
OR
AR = TR / Q
Discussion
7074.

what is meant by unitary elastic demand ?

Answer»

SOLUTION :When percentage change INTHE QUANTITY demanded is EQUAL to percentage change in price, then demand for such a commodity is said to ve unitary ELASTIC .
Discussion
7075.

If demand and supply curves do not intersect each other at any positive quantity, the industry is :

Answer»

MAKING profits
in PERFECT competition
not economically viable
all of these

Answer :C
Discussion
7076.

A component part chart can be presented in the form of :

Answer»

CIRCLE
Bars
Both circles and bars
TRIANGLES.

Solution :C
Discussion
7077.

Equilibrium price remains the same when :

Answer»

INCREASE in DEMAND = Increase in Supply
Increase in Demand `GT` DECREASE in Supply
Decrease in demand `gt` increase in Supply
Increase in demand = Decrease in Supply

Answer :(a)
Discussion
7078.

Central tendency refers to a central value of a statistical series.

Answer»


SOLUTION :A measure of central tendency is a single value that describes the way in which a group of DATA cluster around a central value. To PUT in other words, it is a way to describe the CENTER of a data set.
Discussion
7079.

Explain, in brieef, the meaning of opportunity cost.

Answer»

Solution :A benefit, PROFIT, or value of SOMETHING that must be given up to acquire or achieve something else. Since every resource (land, money, TIME, etc.) can be put to ALTERNATIVE uses, every action, choice, or decision has an associated opportunity cost.
Discussion
7080.

When price of a good falls from ₹ 15 per unit to ₹ 12 per unit, its demand rises by 25% , calculate P.e_(D)

Answer»


ANSWER :1.25
Discussion
7081.

Discuss the relationship between TR and MR when prices is reduced to sell more.

Answer»

Solution :(i) TR INCREASES as LONG MR is POSITIVE.
(ii) TR is MAXIMUM and constant when MR is zero.
(iii) TR falls when MR becomes NEGATIVE.
Discussion
7082.

What policy initiatives can the government undertake to increase the demand of milk in the country? Mention any one

Answer»

Solution :In ORDER to increase the demand the demand of milk in the country government can take FOLLOWING MEASURES:
(a) can give subsidies to REDUCE price.
(b) can undertake health CAMPAIGNS to promote the positive effects of consumption of milk.
(c) can reduce taxes on sale of milk.
Discussion
7083.

"An economy always operates on production possibility frontier and not inside it". Do you agree with the given statement?

Answer»

Solution :No, I do not AGREE with the given statement. An economy operates on production possibility frontier (PPF) only when resources are fully and EFFICIENTLY UTILISED. However, if resources are not fully and efficiently utilized, then economy operates at any point inside PPF.
Discussion
7084.

Which of the following diagram represent the situation of 'Expansion in Demand' ?

Answer»




ANSWER :A
Discussion
7085.

According to Law of Variable Proportions, when we increase quantity of only one input keeping other inputs fixed, _______ initially increases at an increasing rate, then at a decreasing rate and finally at a negative rate.

Answer»

TOTAL Product
Average Product
Marginal Product
None of these

Answer :A
Discussion
7086.

Explain frequency polygon.

Answer»
Discussion
7087.

The demand curve slopes downwards because of

Answer»

LAW of DMU
income EFFECT
substitution effect
all of these

Answer :D
Discussion
7088.

Define the following concepts: (i) Marginal Utility, (ii) Total Utility, (iii) Law of Diminishing Marginal Utility

Answer»
Discussion
7089.

When total revenue is constant average revenue will also be constant.

Answer»

Solution :FALSE : When total REVENUE is CONSTANT, AVERAGE revenue will fall.
Discussion
7090.

There is no difference between a firm and an industry in :

Answer»

PERFECT COMPETITION
monopoly
monopolistic competition
oligopoly.

Answer :D
Discussion
7091.

Give formula to measure P.e_(D) by Percenatage method

Answer»

SOLUTION :Percentage METHOD:
` P.e_(D) = (" Percentage CHANGE in quantity demanded")/("Percentage change in price")`
Discussion
7092.

The demand curves facing a seller under conditions of pertect competition, monopolistic compettion and monopoly difer in their price elasticities of demand. Draw demand curves of all the three market situations in a single diagram.

Answer»

Solution :Perfect competition has a perfscty ELASTIC DEMAND CURVE (DD) parallel to the X-axis Monopolistic competition has a HIGHLY elastic demand curve `(D_(1),D_(1)). Manopoly has a LESS elastic demand curve `(D_(2)D_(2))`
Discussion
7093.

Identify which of the following is not true for the Indifference Curves. Give valid reasons for choice of your answer. (a) Lower indifference curve represents lower level of satisfaction (b) Two regular convex to origin indifference curves can intersect each other. (c) Indifference curve must be convex to origin at the point of tangency with the budget line at the consumer's equilibrium. ltbr. (d) Indifference curves are drawn under the ordinal approach to consumer equilibrium

Answer»

Solution :Out of the given options. (b) is incorrect. Indifference Curves have a property that two ICs cannot intersect. Suppose, there are any two ICs INTERSECTING each other. As per the FIGURE:

`A = C ("on " IC_(1))`
`D = E ("on " IC_(2))`
But if we see the peculiarity of point B (the point of intersection), this would result into absurd situation of `A = C = B " & " D = C = B`, which is not possible, as they are violating the basic definition of the indifference curves.
Discussion
7094.

Why do economic problems arise ?

Answer»

Solution :ECONOMIC PROBLEMS ARISE because the available RESOURCES are scarce in relation to the unlimited wants for goods and SERVICES.
Discussion
7095.

In weightedindex, weights are accorded to different items depending on their relative importance."" (True/False)

Answer»


ANSWER :1
Discussion
7096.

Explain coefficient of range with the help of a formula.

Answer»

Solution :RANGE is an ABSOLUTE MEASURE of dispersion. As such it cannot be used for comparisons. To make it comparable we find its COEFFICIENT.
Coefficient of Range = H-L`/`H+L
Discussion
7097.

Under monopoly, the barriers to entry and exit of firms lead to absence of competition in the market. Do you think this is necessary in certain strategicareas like in the case of production of defense goods and atomic energy?

Answer»

Solution :Yes, BARRIERS to entry and exit of firms is necessary in certain strategic areas (defense GOODS, atomic energy, etc.) because these areas are of national SECURITY and production of such goods cannot be left open for COMPETITION.
Discussion
7098.

Suppose a consumer can afford to buy 6 units of good 1 and 8 units of good 2, if she spends her entire income. The prices of two goods are Rs.6 and Rs.8 respectively. What is the consumer's income ?

Answer»


Solution :EQUATION of budget LINE =`P_1x_1+P_2x_2=M`
Here `P_1=Rs.6, P_2=Rs.8, x_1=` 6 units, `x_2`=8 units
HENCE `P_1x_1+P_2x_2=6xx6+8xx8`
Total expenditure=36+64=100
Hence, total INCOME (M) of the consumer is
Rs.100 as `P_1x_1+P_2x_2=M`
Discussion
7099.

A budget set is the collection of all bundles of goods that a consumer wants to buy

Answer»

Solution :Budget SET CONSISTS of all those bundles of two goods, which a CONSUMER can afford, given his INCOME and prices in the market
Discussion
7100.

If decrease in supply is less than the decrease in demand, then:

Answer»

Both EQUILIBRIUM PRICE and QUANTITY increase.
Both equilibrium price and quantity decrease.
Equilibrium price INCREASES and quantity decreases.
Equilibrium price increases and quantity increases.

Answer :(B)
Discussion