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4351.

What is rationing?

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Solution :To ensure availability of goods at a maximum PRICE FIXED by government an UPPER limit on the QUANTITY that can be purchased through fair price shopes is fixed. This maximum quantity fixed by government is called RATIONING.
Discussion
4352.

Represent the following frequency distribution graphically :

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Discussion
4353.

What is meant by " price discrimination"?

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Solution :Price DISCRIMINATION refers to the practice of charging DIFFERENT price from different buyers at the same TIME for the same PRODUCT.
Discussion
4354.

Which of the following errors is more serious and why ? (a) Sampling error. (b) Non-sampling error.

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ANSWER :Non-sampling ERROR is more SERIOUS than a sampling error. Because a sampling error can be minimised by opting for a larger SAMPLE SIZE. No such possibility exists in case of non-sampling errors.
Discussion
4355.

What is the differnce between universe and sample ?

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Solution :The collection of all elements POSSESSING common CHARACTERISTICS that comprise universe is known as the population. ... The population consists of each and every element of the ENTIRE group. On the other HAND, only a handful of ITEMS of the population is included in a sample
Discussion
4356.

The equality of marginal cost and marginal revenue is a condition necessary for equilibrium , but it is not by itselt sufficient to assure the attainment of producer's equilibrium . Comment.

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Solution :The given statement is correct. EQUALITY of marginal revenue (MR) and marginal cost (MC) is only one conditions for the equilibrium of the firm. Another conditions also NEEDS to be fulfilled for the ESTABLISHMENT of the firm's equilibrium and that is , MC mustbe GREATER than MR after MC=MR OUTPUT level'.
Discussion
4357.

Define quartile deviation.

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Solution :Quartile DEVIATION is half of INTER quartile range. It is also called semi-inter quartile range. Thus,
Quartile Deviation `=(Q_(3)-Q_(1))/(2)`
Discussion
4358.

Explain three properties of indifference curve

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SOLUTION :Property I. Indifference CURVES slope downward to the right:
This property implies that an indifference CURVE has a negative slope.Indifference curve being downward sloping means that when the amount of one good in the combination is increased, the amount of the other good is reduced. This must be so if the level of satisfaction is to REMAIN the same on an indifference curve.
Property II: Indifference curves are convex to the origin:Another important property of indifference curves is that they are usually convex to the origin. In other words, the indifference curve is relatively flatter in its right-hand portion and relatively steeper in its left-hand portion.
Property III: Indifference curves cannot intersect each other:Third important property of indifference curves is that they cannot intersect each other In other words only one indifference curve will PASS through a point in the indifference map 1 his property can be easily proved by first making the two indifference curves cut each other and then showing the absurdity or self-contradictory result it leads to.
Discussion
4359.

What is a price taker firm?

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Solution :A PRICE TAKER firm is a firm which has no option but to sell at a price DETERMINED at the industry LEVEL.
Discussion
4360.

Define deviation bar diagram.

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SOLUTION :The deviation are used to compare the net deviation of related VARIABLES with RESPECT to time and location. Bars REPRESENTING POSITIVE and negative deviations are drawn above and below the base line.
Discussion
4361.

Define economic problem.

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Solution :ECONOMIC problem is a problem of making a choice. Choice of the MANNER in which limited resources are DISPOSED off to satisfy unlimited HUMAN wants.
Discussion
4362.

Twenty students of Class XI have secured the following marks : Present the data as a frequency array.

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Solution :Following table presents these data in the form of a frequency array. The table shows that 3 students secured 11 marks, 4 students secured 14 marks, again 4 students secured 20 marks, and the like.As it is CLEAR from the table, in such series the items are arranged in the ASCENDING (or descending) order. Frequencies are noted infront of each item to signify the number of times that the itemoccurs in the series. In this table, the marks secured are shown in ascending order. Against these marks are shown their frequencies,that is, the number of students who have secured these marks.

Thus, 3 is the frequency for 11, so 3 is written against it. This means 11 is occurring 3 times in the series, or 3 students have secured 11 marks. Likewise, 5 is written against 17, 5 is the frequency of 17 or 5 students have secured 17 marks.
Discrete series present the data in a very brief form. However, this type of presentation of the data becomes difficult when there is a large mass of data and a large number of small frequencies. In such situations, data are to be distributed in different classes.
Discussion
4363.

Define Statistics as a singular noun.

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Solution :In the singular SENSE, Statistics means science of Statistics or STATISTICAL METHODS. It refers to techniques or methods relating to collection, classification, presentation, ANALYSIS and interpretation of QUANTITATIVE data.
Discussion
4364.

Average product will increase only when marginal product increases.

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Solution :False. AVERAGE product will increase only when marginal product is greater than average product whether MP is RISING or FALLING.
Discussion
4365.

When does a consumer buy less of a commodity at a given price?

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SOLUTION :When other factors affecting the demand of a commodity other than the price changes, a CONSUMER may buy less of the commodity. For example, a FALL inincome of the consumer in CASE of a NORMAL good.
Discussion
4366.

Size and composition of population affect the demand for an individual.

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SOLUTION :It AFFECTS the MARKET DEMAND and not the INDIVIDUAL demand.
Discussion
4367.

MC is minimum at point where TCstart increasing at an increasing rate.

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SOLUTION :False. MC is minimum when the rate of increase in TC stops DIMINISHING.
Discussion
4368.

Higher indifference curve represents higher level of satisfaction to the consumer'. Explain The statement also state the underlying assumption related to this property of indifference curve

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Solution :Higher indifference CURVE represents higher level of satisfaction. In other words, any combination of goods which lie on a higher indifference curve represents higherlevel of satisfaction as consumer is able to buy more of goods on a higher IC.
In the diagram Bgt A as consumer is able to buy more of `IC_2` both the goods on as COMPARED to `IC_1`
The underlying assumption is Monotonic Preference i.e., a consumer prefers a combination which contains more of Good at least one good and no less of the other good.
Discussion
4369.

The following change in PPC is due to:

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Massive Unemployment
Destruction of Resources
Increase in Resouces
Fuller UTILISATION of Resources

Solution :The PPC of an economy shifts outward if: Resources used in production such as COAL, oil, and population in the economy increase. The economy sees improvements in technology which make production more EFFICIENT; more goods can be produced with the same resources.
Discussion
4370.

What conditions must hold if a profit maximising firm produces positive output in a competitive market ?

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Solution :(i) MR = MC ` "" ` (ii) MC GT MR after equilibrium
(iii) In the short RUN, `P GE AVC` and In the long run `P ge AC`.
Discussion
4371.

Why is the equality between marginal cost and marginal revenue necessary for a firm to be in equilibrium ? Is it sufficient to ensure equilibrium ? Explain.

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Solution :The producer's equilibrium conditions are `(i) MC=MR and (II) MC gt MR` after equilibrium.
SUPPOSE `MC gt MR:` in this situation it will be profitable for the firm to produce more or less depending upon relative CHANGE in MC and MR till MC=MR.
Suppose `MC lt MR:` it will be profitable for the producer to producer more till MC=MR.
MC =MR is not a sufficient CONDITION to ensure equilibrium. GIVEN MC=MR suppose the behaviour of MC and MR is such that if one more unit is produced, MC becomes less than MR.
Then in this case it will be profitable for the firm to producemore . therefore INTHIS case though MC=MR , the producer is notin equilibrium However, if after MC=MR output. ,MC becomes greater than MR It will be most advantageous for thefirm to produce only upto MC=MR.
Discussion
4372.

When MR is falling but positive, TR will also be falling and positive.

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Solution :FALSE : When MR is falling but positive, TR will be rising.
Discussion
4373.

Calculate coefficient of correlation between the price and quantitysupplied.

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SOLUTION :
`r=(sumdxdy-((sumdx) xx(sumdy))/(N))/(sqrt(sumdx^(2)=((sumdx)^(2))/(N))xx sqrt(sumdy^(2)-((sumdy)^(2))/(N)))`
`=(205-((13)xx(0))/(5))/(sqrt(213-((13)^(2))/(5))xxsqrt(250-((0)^(2))/(5)))`
`=(205-0)/(sqrt(213-33.80)xxsqrt(250-0))`
`=(205)/(sqrt(179.20)xxsqrt(250))=(205)/(13.39xx15.81)`
`=(205)/(211.70)`
`+0.97`
coefficient of Correlation (r)=+0.97.
This is a SITUATION of a high degree of positive correlation.
Discussion
4374.

Monoatomic preference is in the indifferences Curve Analysis means that

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TOTAL utility INCREASES as quantity of goods with the consumer increases
Total utility DECREASES as quantity of goods with the COSUMER decreases
Both (a) And (b)
Neither (a) nor (b)

Answer :C
Discussion
4375.

Average variable cost falls when it is more than marginal cost.

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SOLUTION :TRUE. When average variable COST is more than marginalcost (or marginal cost curve is below average variable cost curve), average variable cost will FALL.
Discussion
4376.

A person's total utility (TU) schedule is given below. Derive marginal utility (MU) {:("Units",0,1,2,3,4,5),(TU,0,12,21,29,32,30):}

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SOLUTION :MU:-12,9,8,3,-2
Discussion
4377.

Identify the three phases of the Law of Variable Proportions from the data in question number 2.

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Solution :The three PHASES of the Law of VARIABLE Proportions are identified from the behaviour of MP.
The first phase is up to 2 UNITS because MP is increasing.
The second phase is 3 units to 4 units because MP is falling but POSITIVE.
The third phase is from 5th unit because MP is negative.
Discussion
4378.

What does a point on the Budget Line indicate in terms of prices ?

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SOLUTION :In terms of prices, a POINT on the BUDGET Line REPRESENTS the ratio of price of the good shown on the X-axis to the price of the good shown on the Y-axis.
Discussion
4379.

"In a hypothetical market of mobile phones, the brand AWAAZ was leading the market share. Its nearest competitor VAARTA suddenly changed its strategy by bringing in a new model of the mobile phone at a relatively lesser price. in response, AWAAZ too slashed its price." Based on the above information, identify the form of market represented and discuss any one featureof the market.

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Solution :The form of market represented in the question is OLIGOPOLY. Under oligopoly, firms are in a position to INFLUENCE the prices. However, they try to avoid price competition for the fear of price war. They follow the policy of price rigidity. Price rigidity refers to a situation in which price tends to stay fixed irrespective of changes in demand and supply conditions. Firms use METHODS like advertising, better services to customers,etc to compete with each other.If a firm tries to reduce the price, the rivals will also react by reducing their prices. However, if it tries to raise the price, other firms might not do so. It will lead to loss of customers for the firm, which intended to raise the price. So, firms prefer non-price competition INSTEAD of price competition.
Discussion
4380.

Give one point of differnece between law of demand and elasticity of demand.

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SOLUTION :Law of demand reflects the DIRECTION of change in demand DUE to change in price, whereas ELASTICITY of DMEAND measures the degree or magnitudeof change in demand due to change in price of the commodity.
Discussion
4381.

What do you understand by positive economic analysis?

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SOLUTION :Positive ECONOMICS DEALS with what are the ECONOMIC problems and how are they actually solved.
Discussion
4382.

Price floor is ______ the equilibrium price :

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LOWER than
higher than
equal to
all of these

Solution :N/a
Discussion
4383.

When AP falls due to increase in quantity of variable input :

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`MP lt AP`
`MP = AP`
`MP GT AP`
None of these

Answer :A
Discussion
4384.

If with the rise in price of good Y, demand for good X rises, the two good are :

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Substitutes
Complements
Not related
Jointly demanded

Answer :A
Discussion
4385.

Explain vital aspects of functioning of an economy?

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Discussion
4386.

How do the equilibrium price and quantity of a commodity change when price of input used in its production changes?

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Solution :A change in price of INPUTS will directly influence the equilibrium price and quantity of the commodity.
An INCREASE in price of inputs will raise the PRODUCTION COST and it will lead to decrease in supply of the commodity. It will lead to excess demand.
On the other hand, a decrease in price of inputs will increase the supply due to fall in cost of production and rise in profit margin. It will lead to excess supply.
Discussion
4387.

A straight-line supply curve cuts the Y-axis in its positive range. What is the elasticity of supply?

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Solution :Highly elastic `(Es GT 1)` because quantity supplied is more RESPONSIVE to the change in PRICE
Discussion
4388.

Cumulative frequency indicates ' less than' or more than' value of the series.

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SOLUTION :TRUE because it is for both
Discussion
4389.

There is no selling cost under monopoly due to presence of single seller.

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SOLUTION :Selling COSTS are incurred under monopoly. HOWEVER, they are of SMALL amount as they are meant only for information purpose
Discussion
4390.

which ofthe followingdiagramcorrectlydepicts the situation of UnitaryElastic Supply ?

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All ofthese

Solution :All of these SITUATION depicts the unitary ELASTIC SUPPLY because the supply curve is PASSING through the origin irrespective of the ANGLE it makes.
Discussion
4391.

How is price elasticty of demand of a commodity affected by the number of its substitutes ?

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Solution :If the good has more SUBSTITUTES available then DEMAND is elastic as the consumer can shift to other GOODS in case of a CHANGE in price. On the other hand, if a good has less or no substitutes then its demand will be less elastic or it will INELASTIC as the consumer will have no choice available.
Discussion
4392.

What is the shape of total revenue curve under perfect competition?

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Solution :TR curve under PERFECT COMPETITION is a STRAIGHT `45^(@)` positively SLOPED line.
Discussion
4393.

if a good takes up significant share of consumers' budget, it will be

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LESS ELASTIC
HIGHLY elastic
Unitary elastic
PERFECTLY elastic

Solution :N/a
Discussion
4394.

Total utility is minimum when marginal utility is zero

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Solution :Total UTILITY is MAXIMUM when MARGINAL utility is ZERO.
Discussion
4395.

What are the properties of a good measure of dispersion?

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Solution :1. It should be rigidly DEFINED.
2. It should be based on all the items.
3. It should not be unduly affected by extreme items.
4. It should lend itself for algebraic manipulation.
5. It should be simple to understand and easy to calculate.
Discussion
4396.

Explain the meaning and need for maximum price ceiling.

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Solution :Maximum price ceiling refers to the maximum price that the producers are allowed to charge by SELLING their goods and services. These interventions is usually done in the situations of "shortages" as if not controlled, this my lead to high market price of the good. It is GENERALLY imposed on necessary items like WHEAT, rice, kerosene, sugar etc. and it is FIXED below the market-determined price SINCE at the market-determined price some section of the population will not be able to afford these goods.
Discussion
4397.

Cross price effect occurs in case of substitude goods only

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Solution :It OCCURS in complementary goods also. CROSS price effect shows effect on demand of a GIVEN commodity due to change in price of related commodity and both SUBSTITUE and complementary goods are related goods.
Discussion
4398.

Average fixed cost curve touches the Y-axis because at zero output, average fixed cost is zero.

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Solution :False. Average fixed cost can never touch the Y-axis because at ZERO output, it is infinite. AFC=TFC/Output so, TFC is a POSITIVE VALUE at zero output and any positive value divided by zero will provide infinite value.
Discussion
4399.

Explain the effect of : (a) change in own price and (b) chane in price of substitude on demand of a good.

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Solution :(a) A change in own price of the commodity will lead to change in qunatity DEMANDED or in other WORDS, expansion or contraction demand. It leads to movement ALONG the demand curve.
(b) Price of substitue goods and qunatity demanded of another subsitute has a positive relationship. HENCE, an INCREASE in price of the substitute good will lead to an increase in demand of the concerned good and vice-versa. It leads to a shift in the demand curve.
Discussion
4400.

Explainthe relationshipbetweenaverage variable cost and marginal cost with the help of a diagram.

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SOLUTION : Marginal cost (MC) is the cost of producing an extra unit of output. Review: Average variable cost (AVC) is the cost of labor PER unit of output produced. When MC is below AVC, MC PULLS the average down. You should understand the exact relationship between marginal cost (MC) and average variable cost (AVC).
Discussion