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7401.

Give equations for budget set and budget constraint.

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Solution :BUDGET SET
(i)`P_1x_1+P_2x_2=M` and (II)`P_1x_1+P_2x_2 LT M`
Budget constraint =`P_1x_1+P_2x_2 gt M`
Discussion
7402.

What are the characteristics of a perfectly competitive market?

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SOLUTION :DISCUSS "FEATURES of PERFECT COMPETITION".
Discussion
7403.

A shift in demand curve of the given commodity may be caused by change in any determinant of demand function.

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SOLUTION :It cannot be CAUSED by change in price of the GIVEN commodity. Change in all other determinants LEAD to shift in demand curve.
Discussion
7404.

Pocket allowance of 5 students respectively are: 125, 75, 150, 175, 200 Find out arithmetic mean.

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ANSWER :ARITHMETIC MEAN = RS. 145
Discussion
7405.

When is a good considered a normal good ?

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SOLUTION :A GOOD is considered NORMAL when with rise/fall in INCOME of its consumers, its demand rises/falls.
Discussion
7406.

What are the shapes of AR and MR curves, when each unit is sold at the same price ?

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Solution :AR and MR CURVES coincide in a HORIZONTAL straight line PARALLEL to X-axis.
Discussion
7407.

Normal curves are also known as:

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J-shaped curve
L-shaped curve
U-shaped curve
bell-shaped curve

Solution :D
Discussion
7408.

Suppose there exist only four in a market. Each wants to miximise its market shar and increase profits. An incompetent economic analyst advices one of the firms to reduce price to increase its sales. Would this be a correct measure to increase market share ? What alternative ways would you suggest to the firm to increase sales ?

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Solution :SINCE the market from under CONSIDERATION is oligopoly, a reduction in PRICE by one firm may lead to price war which would make all firms worse off.
Sales can be increased by non price competition through advertising, discounts, free gifts etc.
Discussion
7409.

When the marginal utility starts falling, total utility also start decreasing

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SOLUTION :Total utility starts decreasing only when MARGINAL utility is NEGATIVE
Discussion
7410.

Calculated coefficient of correlation between the price and quantity demanded.

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Solution :
`R=(sumdx'dy'-((sumdx') XX(sumdy'))/(N))/(SQRT(sumdx'^(2)=((sumdx')^(2))/(N))xx sqrt(sumdy'^(2)-((sumdy')^(2))/(N)))`
`=(-10-(0)/(5))/(sqrt(10-(0)/(5))xxsqrt(10-(0)/(5)))`
`=(-10)/(sqrt(10)xxsqrt(10))=(-10)/(10)=-1`
Coefficient of Correlation (r)=-1.
This is a situation of perfectly negative correlation between price and quantity demanded.
Discussion
7411.

Whose formula is considered ideal for the construction of index number?

Answer»

PAASCHE's formula
Laspeyer'sformula
Fisher'sformula
None of these

Answer :C
Discussion
7412.

Giving reason, state whether the following statements are true or false (i) AP will increase only when MP increases. (ii) Under diminishing returns to a factor TP continues to increase till MP reaches zero.

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Solution :(i) False. AP increases as long as MP is greater than AP. It does not MATTER whether MP is increasing or decreasing.
(II) TRUE. TP increases as long as MP reaches 0. When MP becomes negative, TP starts FALLING.
Discussion
7413.

What is budget set ? Explain what can lead to change in budget set.

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Solution :Budget set is the set of all possible COMBINATIONS of the two goods which a consumer can afford, given his income and PRICES in the market.
Budget set is BASED on the assumptions of constant income of consumer and constant PRICE of the commodities. Any change in the income of the consumer or/and price of the commodity, will lead to change in the budget set.
Discussion
7414.

Ceteris paribus means :

Answer»

HOLDING SUPPLY constant
Holding DEMAND constant
Price being constant
Other FACTORS being constant

Answer :D
Discussion
7415.

What are the three phases of law of variable proportions?

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ANSWER :(i)Increasing returns to a factor. TP increases at an increasing RATE and MP increases
(ii) DIMINISHING returns to a factor. TP increases at a diminishing rate and MP falls, but REMAINS positive. Then MP becomes zero when TP is maximum and CONSTANT.
(iii) Negative returns to a factor. TP falls and MP becomes negative.
Discussion
7416.

Arithmetic mean is not a suitable measure in case of __________ values. (absolute/percentage)

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ANSWER :PERCENTAGE
Discussion
7417.

What is the basis for classifying a market ?

Answer»

Solution :`{:("NUMBER of buyers and sellers","NATURE of TEH commodity"),("Freedom of entry and exit of FIRMS","Knowledge of the market conditions"),("Mobility of goods and factors","Price policy"),("SHAPES of AR and MR curves.",):}`
Discussion
7418.

For consumer's equilibrium to be stable, the requirement is:

Answer»

CONSTANT MRS
Increasing MRS
Diminishing MRS
None of these

Answer :C
Discussion
7419.

The supplycurveof a goodshiftsto therightwhenpricesofother goods rise.

Answer»

Solution :False: Whenpriceof othergoods rise, it BECOMES more PROFITABLE to produce them in PLACE of thegivengood, so supply CURVE will shift to LEFT.
Discussion
7420.

A diagram is:

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EXACT alternative to data
CLOSE SUBSTITUTE of data
An AID to understanding of data
All the above.

SOLUTION :C
Discussion
7421.

In case__ , Supply cvrveis a verticalstraingline parallel to theY-axis.

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PERFECTLY elastic SUPPLY.
unitaryelastic supply.
perfectlyinelastic supply.
lesselastic supply.

Solution :when Es=infinity , i.e., in case of perfectly INELASTIC supply , supply curve is VERTICAL straight line parallel to Y-axis.
Discussion
7422.

Can a consumer go beyond the budget line ?

Answer»


SOLUTION :No, a CONSUMER cannot go beyond the budget line with his given income and prices of two goods. Any Feasible point towards the right of budget line shows non- COMBINATIONS attainable or non-feasible combinations.
Discussion
7423.

Following is the pocket allowance of 10 students. Find out arithmetic mean using Short-cut Method. {:("Pocket Allowance(Rs.)",15,20,30,22,25,18,40,50,55,65):}

Answer»

Solution :
The SUM of '+' deviations = + 50
The sum of '-' deviations = - 110
The net sum of deviations, `sum d =-110+ 50 = -60`
Dividing the aggregate of deviations `(sum d)` by the number of
items (N), ` (sum d)/N =(-60)/10 = - 6`
Substituting this value of` (sum d)/n`in the following formula:
` barX = A+(sum d)/N `
We have,
`barX = 40 +(-) 6`
=40-6
=34
Arithmetic Mean = Rs. 34.
Discussion
7424.

Base year in an index number should be an year in which these are :

Answer»

Nocyclical FLUCTUATIONS
MINIMUM CYCLICAL fluctuations
Average cyclical fluctuations
Maximum cyclical fluctuations

Solution :B
Discussion
7425.

Inflation hits the common man the most, Which branch of economics tries to find solution of this problem?

Answer»
Discussion
7426.

How is TU derived from MU ?

Answer»

Solution :Relationship Between Total Utility (TU) and MARGINAL Utility (MU): When a consumer goes on to consume the units of a commodity CONTINUOUSLY the marginal utility derived from the SUCCESSIVE units of the commodity goes on to fall constantly while other factors are held CONSTANT.
Discussion
7427.

Suppose we have to prepare a price index number constituting three goods A, B and C. For the year 2008 and 2009. We are given the followinginformation:

Answer»

Solution :
`L=sum(p_(1)q_(o))/(p_(o)q_(o)) xx100=(440)/(380)xx100=116 " approx".`
`P=sum(p_(1)q_(1))/(p_(o)q_(1)) xx100=(490)/(370)xx100=132 " approx".`
`F=sqrt("L P")=sqrt(116xx132)=124" approx". `
Discussion
7428.

The situation of consumer's disequilibrium (MU_X)/P_X gt (MU_Y)/P_Y arise :

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due to increase in CONSUMPTION of GOOD X
due to increase in price of good X
due to decrease in price of good Y
due to increase in price of good Y

Solution :D
Discussion
7429.

What is relationship between AR and MR , when price remains constant ?

Answer»

SOLUTION :AR=MR and both the CURVES coincide in a horizontal straight LINE which is parallel to the X-axis
Discussion
7430.

Define individual demand curve

Answer»

Solution :Individual DEMAND curve is a graphical representation of individual demand SCHEDULE i.e it SHOWS the negative relation between PRICE and qunatity demanded of a commodity by an individual, other things being EQUAL.
Discussion
7431.

Suppose a consumer's preferences are monotonic. What can say about her preference ranking over the bundles (10,0), (10,9) and (9,9) ?

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Solution :If a consumer has monotonic preferences, then her preferences will rank as FOLLOWS:
`1^(st) (10, 0) "" 2^(nd) (10,9) "" 3^(RD) (9,9)`
Discussion
7432.

The 2^(nd) phase (diminishing returns to a factor) is exhibited by the following total product sequence:

Answer»

`50, 50, 50, 50`
`50, 110, 180, 260`
`50, 100, 150, 200`
`50, 90, 120, 140`

Answer :D
Discussion
7433.

Few large firms collectivley decide the level of output and prices and still retain their individual identity. Identigy the type of market form.

Answer»

Monopoly
Oligopoly
Perfect COMPITION
Monoplistic competition

Solution :B.
Discussion
7434.

If thequnatity supplieddoes not changeat all as prices change ,whatwill bethe elasitcity of supply ?

Answer»

SOLUTION :Perfectly inelastic Supply `(E_(s) = 0)`.becausethere is no EFFECT of change in price on QUANTITY SUPPLIED.
Discussion
7435.

What does the averge fixed cost curve look like ? Why doesit look so ?

Answer»

Solution :The AVERAGE fixed cost (AFC) curve looks like a rectangularhyperbola. Ithappens because same AMOUNT of fixed cost is divided by increasing output. As a result, , AFC curve slope downwardsand is a RECTANGULAR HYPERBOLA, i.e., area under AFC remains same at different points.
Discussion
7436.

What is the shape of TR curve, when price remains same at all output levels ?

Answer»

SOLUTION :TR curve is a positively SLOPED straight LINE, ORIGINATING from the origin.
Discussion
7437.

The demand curve of a commodity may not obet the law of demand if price of its substitude rises.

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SOLUTION :With rise in price of substitutes, the demand CURVE of the COMMONDITY MAY not obey the law of demand because demand curve is drawn on an assumption that there is no CHANGE in other determinants of demand.
Discussion
7438.

Distinguish between individual's demand and market demand. Name the factors affecting demand for a good by an individual.

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SOLUTION :Individual demand refers to the quantity of a commodity that a consumer is willing and able to buy, at different possible prices during a specific period of time.On the other hand, Market Demand refers to the quantity of a commodity that all consumers are willing and able to buy, at each possible PRICE during a specific period of time.
Market demand is horizontal SUMMATION of all the individual demands.
Factors affecting demand for a good by an individual are :-
(i) Price of related goods.
(ii) Income of the consumer.
(iii) Tastes and Preferences.
(iv) Own price of the commodity.
Discussion
7439.

Demand curveof a firm is perfectively Elastic under:

Answer»

PERFECT competition
Monopoly
Monopolistic Competition
Oligopoly

Solution :N/a
Discussion
7440.

Explain the conditions of producer's equilibrium with help of a numerical example. Use marginal cost and marginal revenue approach.

Answer»


SOLUTION :N/a
Discussion
7441.

A country 's resources are fully andefficiently employed. The problem of scarcity exist. What advice will be given to rise the efficiency level of the human resources to fight scarcity?

Answer»

SOLUTION :SPREAD of EDUCATION and TRAINING.
Discussion
7442.

Define excess supply.

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Solution :It REFERS to a situation when the QUANTITY SUPPLIED is more than the quantity demanded at the PREVAILING MARKET price.
Discussion
7443.

Marginal cost refers to additionto the total cost whenone more unitof output is "______",

Answer»

WASTED
Produced
Employed
Sold

Solution :N//A
Discussion
7444.

All numerical information is not Statistics. (True/False)

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SOLUTION :TRUE
Discussion
7445.

The following table shows marks secured by the students of a class in an examination in English: {:("Marks",0-10,10-20,20-30,30-40,40-50),("Number of Students"," "20," "24," "40," "36," "20):} Calculte mean marks using Short-cut Method.

Answer»

SOLUTION :
`(sumfd)/(sumf)=(120)/(140)=0.86`
`barX=A+(sumfd)/(sumf)`
`=25+0.86`
`=25.86`
MEAN MARKS = 25.86.
Discussion
7446.

Explain the central problem of ’choice of technique’?

Answer»

Solution :Choice of technique” REFERS to the central problem of "HOW TO PRODUCE‟ that relates to the central issue of which technique of production should be EMPLOYED to produce a GOOD. The problem is to use capital intensive technique or LABOUR intensive technique for the production of goods in the economy.
Discussion
7447.

Why is average total cost greater than average variable cost?

Answer»

Solution :AVERAGE TOTAL cost (ATC) isgreater than averagevariable cost (AVC) because ATC also INCLUDES average fixed cost (AFC) in additionto AVC at all LEVEL of output.
Discussion
7448.

A firm can maximise its sales either by selling low quantity at a higher price or by selling higher at a lower price ? Both yields the same revenue to the firm. Which one in youropinion will be right for him ?

Answer»

Solution :In my opinion he should sell a higher quantity by reducing PRICE because by doing so he is following a policy which is socially desirable. It will be affordable for all the consumers as his REVENUES are not falling using this strategy, his business ETHICS will ALSO be promoted.
Discussion
7449.

Raw data are collected by investigator during the investigation. (True/False)

Answer»


ANSWER :1
Discussion
7450.

What change will take place in MR, when (i) TR increases at an increasing rate ,(ii) TR increases at a diminishing rate , (iii) TR increases at a constant rate.

Answer»

SOLUTION :The following change will TAKE PLACE in MR :
(i) MR will increase.(II) MR will decrease positively.(iii) MR is constant
Discussion