7498 + Interview Questions in Economics in Class 11 Page 90 InterviewSolution

4451.	Howis marginalproduct calculated ?
Answer» SOLUTION :`MP_(n)=TP_(n)-TP_(n-1)` `"or"MP_(n)=(Delta TP)/(DELTAQ)`

Discussion

4452.	When total revenue is maximum, marginal revenue is also maximum.
Answer» SOLUTION :FALSE : When total REVENUE is maximum, marginal revenue is ZERO.

Discussion

4453.	Define the following terms : (i) Increase in demand , (ii) Decrease in demand , (iii) Contraction in demand.
Answer» Solution :INCREASE in Demand is defined as a RISE in the demand of a commodity due to a change in any other factor of the commodity other than the own price of the commodity. Decrease in Demand is defined as a fall in demand of the commodity due to a change in any other factor of the commodity other than the own price of the commodity. Contraction in Demand is definded as a fall in the qunatity DEMANDED of a commodity caused by an increase in own price of the commodity, other factors remain CONSTANT.

Discussion

4454.	Distinguish between (i) sampling, and (ii) non-sampling errors.
Answer» Solution :Sampling error arises because of the variation between the true MEAN VALUE for the SAMPLE and the population. On the other hand, the non-sampling error arises because of deficiency and inappropriate ANALYSIS of data. Non-sampling error can be RANDOM or non-random whereas sampling error occurs in the random sample only.

Discussion

4455.	What are the two methods for determination of producer's equilibrium?
Answer» SOLUTION :(i) TR- TC APPROACH , (ii) MR -MC Approach.

Discussion

4456.	Differentiate between movement along demand curve and shift in demand curve.
Answer» Solution :(i) Movement ALONG a demand CURVE is either upwards or DOWNWARDS whereas shift in demand curve is either rightwards or LEFTWARDS. (ii) Movement along a demand curve is caused due to a CHANGE in own price of the commodity whereas shift in demand curve is caused due to a change in other factors affecting the demand of the commodity other than the price.

Discussion

4457.	What is the relationship between price and MR ?
Answer» SOLUTION :(i) In perfect COMPETION, PRICE (AR)=MR (ii) In imparfect competion, MR `LT` AR (Price).

Discussion

4458.	Distinguish between 'change in demand' and change in quantity demanded of a commodity.
Answer» SOLUTION :(i) Change in demand is caused due to a change in own price of the commodity whereas change in QUANTITY demanded is caused due to a change in other factors affecting the demand for that commodity but the price remains constant. (ii) Change in demand leads to a movement along the same demand curve whereas Change in quantity demanded leads to a shift in the demand curve. (iii) Change in demand occurs due to an increase or decrease in price of the commodity whereas change in quantity demanded occurs due to change in other factors such as price of RELATED goods, income of the CONSUMER etc.

Discussion

4459.	A consumer consumes only two goods X and Y and is in equilibrium. Price of X falls. Explain the reaction of consumer through the Utility Analysis, OR Suppose a consumer spends his entire income on two goods. X and Y. If he has attained the point of equilibrium through utility analysis, then he will not change his allocation of expenditure on the two goods X and Y, even if price of good X falls. Defend or Refute.
Answer» Solution :In case of two goods X and Y, a consumer will be at EQUILIBRIUM when `(MU_(X))/(P_(X)) = (MU_(Y))/(P_(Y))`. When price of X falls, then rupee worth of satisfaction from X will be more than Y, i.e, `(MU_(X))/(P_(X)) GT (MU_(Y))/(P_(Y))`. Therefore, he will buy more of X and less of Y. this will LEAD to fall in `MU_(X)` and rise in `MU_(Y)`. The consumer will continue to buy more of X till `(MU_(X))/(P_(X)) = (MU_(Y))/(P_(Y))`

Discussion

4460.	When AP is maximum, MP is equal to:
Answer» AP TP Zero One Answer :A

Discussion

4461.	The following news item was printed in the Indian Express: "Centre increases number of work days under MGNREGA".As per the news, the Central Government will increase the number of work days under the rural job guarantee scheme from 100 to 150 in drought-affected areas. How would it affect the PPC of the economy.
Answer» Solution :There will be no EFFECT on PPC as there is no increases in the productive capacity of the ECONOMY. HOWEVER, actual level of employment and OUTPUT will increases DUE to increase in workdays.

Discussion

4462.	A consumer, Mr. Aman is in state of equilibrium consuming two goods X and Y, with given prices P_(x) " and " P_(y). Explain what will happen if: (a) MU_(x)//P_(x) is greater than MU_(y)//P_(y), (b) P_(y) falls.
Answer» SOLUTION :If MU(x)//P(x) is greater than MU(y)//P(y), then this would INDUCE Mr. Aman to buy more of X in place of Y.b) If P(y) falls then Mr. Aman will CONSUME more of GOOD Y.

Discussion

4463.	Explain the implication of large number of buyers in a perfectly competitive market. OR What difference does it make to a perfactly competitive market when we say that there are large number of buyers in it? Explain.
Answer» SOLUTION :The large NUMBER of buyers is assumed to be so large that sn individual buyer's share in total purchases is so negligible THET he cannot influence the market PRICE on its own by purchasing more or less. The OUTCOME is that price remains unchanged.

Discussion

4464.	Personal bias is possible under :
Answer» random sampling purposive sampling STRATIFIED sampling quota sampling SOLUTION :B

Discussion

4465.	A table showing TC and TRof a firm is given . Calculate MC and MR find out the equilibrium level of output.
Answer» Solution : The producer achieves EQUILIBRIUM at 6 units of OUTPUT. It is because this level of output satisfies both the condition of producer's equilibrium : (i) MC is equal to MR, and (ii) MC becomes GREATER than MR after this level of output.

Discussion

4466.	A statement about demand of a good includes information about:
Answer» PRICE Quantity Period of TIME All the above ANSWER :D

Discussion

4467.	What is a lorenz curve?
Answer» Solution :LORENZ curve is curve that shows DEVIATION of actual DISTRIBUTION(of INCOME or wealth) from the line showing EQUAL distribution.

Discussion

4468.	Explain the relation between total utility and marginal utility
Answer» Solution :TOTAL Utility means total benefit obtained by a person from consumption of goods and SERVICES. Marginal Utility means the amount of utility a person gains from the consumption of each successive unit of a commodity. When we SAY that the total utility is increasing at a DIMINISHING rate, we mean that amount of change in total utility is decreasing with the consumption of every extra unit which is nothing but marginal utility. So, if marginal utility is decreasing, that means that next unit adds LESS utility than the previous unit.

Discussion

4469.	According to the law of supply, in what direction will the supply of a commodity move with a change in its price?
Answer» SOLUTION :SUPPLY of the cormmodity will MOVE in the same direction as its price as there exists a direct RELATION between the price of a commodity and its supply.

Discussion

4470.	Explain why does need for government intervention arise when price mechanism can itself handle the market conditions ?
Answer» SOLUTION :N/a

Discussion

4471.	What is meant by descriptive statistics ?
Answer» SOLUTION :Descriptivestatistics refers to those METHODS which are used for the collection presentation as well as analysis of data. These methods RELATE to such estimations as 'measurement of CENTRAL tendencies', 'measurement of dispersion', 'measurement of correlation', etc.

Discussion

4472.	How does a cost saving technology affect the price and quantity exchanged?
Answer» Solution :Equilibrium PRICE will fall and equilibrium QUANTITY will rise (DUE to increase in SUPPLY).

Discussion

4473.	On the basis of data in Example 2 of section 9.5 of Chapter 9 , calculate the value of coefficient of Quartile Deviation .
Answer» SOLUTION :`V_(Q) = (Q_(3) - Q_(1))/(Q_(3)- Q_(1)) = (20-9)/(20+9) = (11)/(29) = 0.38` (or 38%)

Discussion

4474.	Define simple index numbers.
Answer» SOLUTION :Simple INDEX NUMBERS are the index numbers in which all items of the series are accorded equal weightage or IMPORTANCE.

Discussion

4475.	Give an example each of substitute goods and complementary goods.
Answer» Solution :SUBSTITUTE GOODS : TEA and coffee. Complementary goods : camera and film ROLL.

Discussion

4476.	From the following data, compute the coefficient of correlation between X and Y series. Summation of product of deviations of X and Y series from their respective arithmetic mean =41
Answer» Solution :We are given `N=6,bar(X)=350,bar(Y)=138,sumx^(2)=19,sumy^(2)=94,sumxy=41` `R=(sumxy)/(sqrt(sumx^(2)xxsumy^(2)))` Substituting the values, we get `r=(41)/(sqrt(19xx94))=(41)/(sqrt(1,786)=(41)/(sqrt(42.26)=0.97` Coefficient of CORRELATION (r)=+0.97

Discussion

4477.	The Census of India provides data on:
Answer» Number of PERSONS Culture of the people ECONOMIC STRUCTURE of the people All the above. SOLUTION :D

Discussion

4478.	What is meant by diminishing returns to a factor? Why does it occur ?
Answer» Solution :DIMINISHING returns to a factor is the PHASE of production wherein as more and more units of avariable factor are employed the MP decreases with each additional unit of employment. (i) Over-utilisation of the FIXED factor. (II) Imperfect Substitution of FACTORS. (iii) Poor Coordination.

Discussion

4479.	Define an economy.
Answer» SOLUTION :ECONOMY is a SYSTEM which provides prople with the means to woek and EARN a LIVING.

Discussion

4480.	The MU schedule for good X and Y are given. Price of both the goods is Rs 1 each and the income of Ramesh (an individual) is assumed to be Rs 5. Determine, how many units of both the commodities should be purchased by Ramesh to maximize his total utility. What is the total amount of utility received by Ramesh at the point of equilibrium ?
Answer» Solution :Ramesh should PURCHASE 4 units of good x and 1 UNIT of good Y; TOTAL utility= 46 utils

Discussion

4481.	What do you mean by complements? Give examples of two goods that are complements of each other.
Answer» Solution :COMPLEMENTS are the GOODS which are used together or which COMPLEMENT the use of one another. For EXAMPLE, CAR and petrol.

Discussion

4482.	What are determinants of supply ?
Answer» Solution :The DETERMINANTS of supply are as follows : (i) PRICE of commodity (II) Price of related GOODS (iii) Price of factors of production (iv) State of technology (v) Excise tax rate (iv) Number of firms.

Discussion

4483.	Supply is aways unitary elastic for all supply curves starting form theorigin.
Answer» SOLUTION :TRUE:Anysupplycurve, whichpassesthrough THEORIGIN, hasunitaryelastic SUPPLY (irrespectiveof theangleit MAKES withtheorigin).

Discussion

4484.	Give one example each of positive economics and normative economics.
Answer» Solution :POSITIVE economics-the unemployment rate in INDIA in 2017 was 7.1%Normative economics-globalization INFLICTS economic HARM to a country is an opinion.

Discussion

4485.	Give two examples of growth of resources.
Answer» Solution :(i) DISCOVERY of oil reserves in Gulf COUNTRIES causing s substantial rightward SHIFT of PPC. (ii) SUPPLY of skilled IT professionals has increased causing rightward shift in production of IT software in India.

Discussion

4486.	Which of the following is a method of secondary data collection?
Answer» Direct PERSONAL investigation Direct ORAL investigation COLLECTION of informationthrough questionnaire none of the these Solution :D

Discussion

4487.	What is Rotation of PPC ?
Answer» SOLUTION :It takes PLACE when there is change in resources or technology for one COMMODITY only.

Discussion

4488.	In case of ________ there is an infinite demand at a patticular price and demand becomes zero with a slight rise in price.
Answer» PERFECTLY INELASTIC DEMAND Highly ELASTIC demand less elastic demand Perfectly elastic demand. Solution :N/a

Discussion

4489.	A company over utilising its resources is incurring losses as it is producing on rising part of average cost curve. The company needs suggestion as to how can it reduce lossess? Use diagram.
Answer» SOLUTION : The compoany is producing along rising average cost CURVE at `OQ_(1)`. Company is incurring losses as both marginal cost and average cost are rising. To reduce losses ot should cut down on costs by REDUCING production till OQ. The company should ENSURE optium utilisation of scare resources at E where MC cuts AC at its minimum.

Discussion

4490.	Comment on the shape of the MR curve in case the TR curve is a horizontal straight line.
Answer» SOLUTION :When TR is a HORIZONTAL straight line, MR is equal to ZERO.

Discussion

4491.	At the Point of Inflexion :
Answer» TOTAL PRODUCT is maximum Average Product is maximum Marginal Product is maximum Marginal Product is zero Answer :C

Discussion

4492.	Explain the meaning of budget line. What can cause a change in it? Explain
Answer» Solution :Budget line is a GRAPHICAL representation of all possible COMBINATIONS of two goods which can be PURCHASED with given income and prices, such that the cost of each of these combinations is equal to the money income of the consumer. An increase in income causes the budget line to shift outward, PARALLEL to the original line (holding prices constant). A decrease in income causes the budget line to shift inward, parallel to the original line (holding prices constant) so a consumer can buy less of both goods with less income.

Discussion

4493.	The main cause of economicproblem is _________.
Answer» SOLUTION :SCARCITY of RESOURCES

Discussion

4494.	AR and MR curves are downward sloping in
Answer» PERFECT COMPETITION okigopoly MONOPOLY NONE of these. Answer :C

Discussion

4495.	In the context of Indifference Curve Analysis, MRS stands for:
Answer» MARGINAL RATE of Substitution Marginal Rate of Satisfaction Marginal RETURN of Substitution Marginal Return of Satisfaction Answer :A

Discussion

4496.	(i) The sum whether the following statements are true or false :(ii)An average alone is not enough to compare series.(iii) Arithmetic mean is a positional value.(iv) Upper quartile is the lowest valueof top 25% of items.(v) Median is unduly affected by extreme observations.
Answer» ANSWER :[(i) False,(II) True,(III) False, (IV) True , (v) False]

Discussion

4497.	Scarcity refers to lumitation of ____ in relation to ____ for a commodity.
Answer» Demand, SALE Demand, SUPPLY Supply, Demand None of these. Solution :C. Scarcity refers to limitation of Supplyin relation to DEMANDFOR a commodity. 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.

Discussion

4498.	"Price floor is a system to protect the interest of producer". Defend or refute.
Answer» Solution :The government imposes lower limit on the price that may be CHARGED for a particular good or service is called price floor. When equilibrium price determined by market forces of demand and supply is considered to be UNREMUNERATIVE for the PRODUCER, the government intervenes to protect the interest of producers.

Discussion

4499.	(a) What is a budget line ? What does the point on it indicate in terms of prices? (b) A consumer consumes x and y. Her money income is Rs.24 and the prices of x and y are Rs.4 and Rs.2 respectively. Answer the following questions: (i) Can the consumer afford a bundle 4x and 5y? (ii) What will be MES_(xy),when the consumer is in equilibrium ? Explain.
Answer» Answer :(i)No, 26 > 24 (II) 2 UNITS

Discussion

4500.	Under what condition will the demand curve be parallel to Y-axis ?
Answer» Solution :When the DEMAND curve is parallel to the vertical AXIS, it means, that the same AMOUNT of goods are demanded at any price level. Which further means that there is no effect of CHANGE in price on the quantity demanded. Hence, the product is PERFECTLY Inelastic and quantitatively, elasticity of demand is 0

Discussion

Explore topic-wise InterviewSolutions in .

Howis marginalproduct calculated ?

When total revenue is maximum, marginal revenue is also maximum.

Define the following terms : (i) Increase in demand , (ii) Decrease in demand , (iii) Contraction in demand.

Distinguish between (i) sampling, and (ii) non-sampling errors.

What are the two methods for determination of producer's equilibrium?

Differentiate between movement along demand curve and shift in demand curve.

What is the relationship between price and MR ?

Distinguish between 'change in demand' and change in quantity demanded of a commodity.

When AP is maximum, MP is equal to:

A consumer, Mr. Aman is in state of equilibrium consuming two goods X and Y, with given prices P_(x) " and " P_(y). Explain what will happen if: (a) MU_(x)//P_(x) is greater than MU_(y)//P_(y), (b) P_(y) falls.

Explain the implication of large number of buyers in a perfectly competitive market. OR What difference does it make to a perfactly competitive market when we say that there are large number of buyers in it? Explain.

Personal bias is possible under :

A table showing TC and TRof a firm is given . Calculate MC and MR find out the equilibrium level of output.

A statement about demand of a good includes information about:

What is a lorenz curve?

Explain the relation between total utility and marginal utility

According to the law of supply, in what direction will the supply of a commodity move with a change in its price?

Explain why does need for government intervention arise when price mechanism can itself handle the market conditions ?

What is meant by descriptive statistics ?

How does a cost saving technology affect the price and quantity exchanged?

On the basis of data in Example 2 of section 9.5 of Chapter 9 , calculate the value of coefficient of Quartile Deviation .

Define simple index numbers.

Give an example each of substitute goods and complementary goods.

From the following data, compute the coefficient of correlation between X and Y series. Summation of product of deviations of X and Y series from their respective arithmetic mean =41

The Census of India provides data on:

What is meant by diminishing returns to a factor? Why does it occur ?

Define an economy.

What do you mean by complements? Give examples of two goods that are complements of each other.

What are determinants of supply ?

Supply is aways unitary elastic for all supply curves starting form theorigin.

Give one example each of positive economics and normative economics.

Give two examples of growth of resources.

Which of the following is a method of secondary data collection?

What is Rotation of PPC ?

In case of ________ there is an infinite demand at a patticular price and demand becomes zero with a slight rise in price.

A company over utilising its resources is incurring losses as it is producing on rising part of average cost curve. The company needs suggestion as to how can it reduce lossess? Use diagram.

Comment on the shape of the MR curve in case the TR curve is a horizontal straight line.

At the Point of Inflexion :

Explain the meaning of budget line. What can cause a change in it? Explain

The main cause of economicproblem is _________.

AR and MR curves are downward sloping in

In the context of Indifference Curve Analysis, MRS stands for:

(i) The sum whether the following statements are true or false :(ii)An average alone is not enough to compare series.(iii) Arithmetic mean is a positional value.(iv) Upper quartile is the lowest valueof top 25% of items.(v) Median is unduly affected by extreme observations.

Scarcity refers to lumitation of ____ in relation to ____ for a commodity.

"Price floor is a system to protect the interest of producer". Defend or refute.

Under what condition will the demand curve be parallel to Y-axis ?

Scarcity refers to lumitation of in relation to for a commodity.