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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 4501. |
The factors affecting P.e_(D) are |
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Answer» NATURE of the COMMODITY |
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| 4502. |
Define Revenue. |
| Answer» Solution :Revenue of a firm is its MONEY RECEIPTS from the sale of its PRODUCT. | |
| 4503. |
Give three reasons (or causes) of a rightward shift of demand curve. or State any three or two factors that cause increase in demand of a commodity. |
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Answer» SOLUTION :(a) A rise in INCOME of the CONSUMER. (b) A favourable change in tastes and preferences of the consumer. (c) EXPECTATION of rise in price of the COMMODITY in the near future. |
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| 4504. |
What policy initiatives can the government undertake to increase the demand of milk in the country? Mention any one. |
| Answer» Solution :(i) GIVE SUBSIDIES to reduce PRICE, (ii) UNDERTAKE health CAMPAIGNS to promote the positive effects of milk consumption. | |
| 4505. |
Market Rate of Exchange also denotes : |
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Answer» SLOPE of PPC |
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| 4506. |
1. In India, automobiles are produced by 3 companies Ford, Hyundai and Renault. 2. Soap industry in India includes many markers such as Lux, Dove, Pears, Lifebuoy nad the like. 3. India Railways is the only long distance mode of transportation on land. |
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Answer» 2. Since there are a number of producers and product differentiation EXISTS, it is monopolistic competition. 3. Since it is a single suplier of this product and there are no close substitutes, it is a monopoly. |
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| 4507. |
In which situation does the supply fall at the same price? |
| Answer» Solution :Decrease in SUPPLY LEADS to the movement along the same supply curve indicating the fall in quantity supplied at the same PRICE. | |
| 4508. |
Explain how firms are interdependent in an oligopoly market. |
| Answer» SOLUTION : Firms under oligopoly are interdependent. INTERDEPENDENCE MEANS that actions of one firm AFFECT the actions of other firms. A firm considers the ACTION and reaction of the rival firms while determining its price and output levels. A change in output or price by one firm evokes reaction from other firms operating in the market. | |
| 4509. |
Using a diagram, explain what will happen to the PPC of Bihar if the river Kosi causes widespread floods? |
| Answer» SOLUTION :It will LEAD to destruces in BIHAR, which will SHIFT the PPC leftward. | |
| 4510. |
Explain any two main features of perfect competition. |
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| 4512. |
Suppose, we have to find out modal marks from the following frequency distribution: (Table 8.8) |
Answer» Solution : `l_(1)=40,` `Delta_(1)=20-9=11` `Delta_(2)=20-10=10,` `i=20(=40-20)` Substituting these values Mode `=l_(1)+(Delta_(1))/(Delta_(1)+Delta_(2))xxi=40+(11)/(11+10)xx20=40+(11)/(21)xx20` `=40+(220)/(21)=40+10.8` approx=50.48 approx. |
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| 4513. |
When ATC is falling. MC: |
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Answer» MUST be falling |
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| 4514. |
What is law of diminishing marginal utility ? |
| Answer» Solution :The Law Of Diminishing Marginal Utility states that all ELSE equal as CONSUMPTION INCREASES the marginal utility derived from each additional unit declines. Marginal utility is derived as the change in utility as an additional unit is consumed. Utility is an economic term used to REPRESENT satisfaction or HAPPINESS. | |
| 4515. |
Distinguish between fixed costs and variable costs. Give two examples of each. |
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| 4516. |
What is law of diminishing marginal utility |
| Answer» Solution :LAW of diminishing marginal UTILITY states that as we CONSUME more and more units of a commodity, utility DERIVED from each SUCCESSIVE unit goes on decreasing. | |
| 4517. |
Explain the effect of the following on the demand of a good (i) Change in the income of the consumer (ii) Change in the price of the related goods. |
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Answer» SOLUTION :(i) There is a positive relationship between income of a consumer and demand for a commodity if the good is a normal good whereas there is a negative relationship between income of the consumer and demand of a commodity if the good is an inferior good. So, with an increase in income of the consumer the demand of a normal good rises and vice-versa and with increase in income of the consumer the demand for an inferior good falls and vice-versa. (ii) There are TWO types of related goods :- (i) Substitute goods, (ii) Complementary goods. In case of substitute goods there is a positive relationship between price of one good and the demand for another i.e as price of one good rises the demand for its substitute rises. On the other hand, in case of complementary goods there is a negative relationship between price of one good and the demand for its COMPLEMENT i.e as price of one good rises the demand for its complement falls |
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| 4518. |
Which of the following is not a central problem of economy? |
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Answer» How to produce |
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| 4519. |
What will happen to budget line when : (a) Price of good 1 in rises (b) Price of good 2 falls (c) Money income of the consumer rises |
| Answer» SOLUTION :Let good 1 is on x axis and good 2 is on y axis.a) When price of good 1 RISES, budget line will become steeper.b) When price of good 2 falls, it will be steeper.c) When MONEY income of thee consumer rises, then it will shift rightward. | |
| 4520. |
Total cost can neverbe constant. |
| Answer» Solution :TRUE. Total Cost can be constant only when MARGINAL Cost is zero, which is not possible. Marginal cost is the cost added by producing ONE additional UNIT of a product or SERVICE. | |
| 4521. |
Define cost function |
| Answer» SOLUTION :It REFERS to a functional relationship between COST and OUPUT. `C=f(q)` | |
| 4522. |
Explain the percentage method of determining of demand with the help of an example. |
| Answer» Solution :Under this method, we measure ELASTICITY by comparing the percentage in price with the percentage change in demand. The elasticity of demand is unity, greater than unity, or less than unity, ACCORDING as the change in demand is proportionate, more than proportionate, or less than proportionate to the change in price respectively. The elasticity is the ratio of the percentage change in the quantity demanded to the percentage change in the price charged.FORMULA-Elasticity = Proportionate change in demand/ Proportionate change in price= Change in Demand/ AMOUNT demanded + Change in price/ PriceEXAMPLE-Suppose that the demand for common salt is 5 kilogram PER MONTH at the price of 20 P. per kg. Now suppose that its price is doubled, i.e., it rises to 40 P. per kg. and now only 4 kg. are demanded.According to our above formula:Elasticity = 5-4/5 ÷ 40/-20/20 | |
| 4523. |
Give causes that lead to emergence of monopoly. |
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| 4524. |
Make a list of activities that constitute the ordinary buisness of life. Why are these called economic activities? |
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Answer» |
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| 4525. |
Write a buyget line equation of a consumer if the two goods purchased by the consumer. Good X and Good Y are priced at 10 and Rs 5 respectively and the conumer's income is Rs 100 OR Define marginal rate of substitution. Explain its behaviour along an indifference curve. |
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Answer» Solution :Budget Line equation: `m = P_(x) Q_(x) + P_(y) Q_(y)`, where m= income Accordingly: `100 = 10Q_(x) + 5Q_(y)` OR MRS refers to therate at which the commodities can be substituted with each other, so that total SATISFACTION of the consumer remains the same. Marginal Rate of SUBSTITUTION diminishes as the consumer moves dowmward along the same indifference curve. It SHOWS that consumer is willing to sacrifice lesser units of a Good Y, in order to gain one ADDITIONAL unit of Good X. This happens due to the operation of law of DIMINISHING marginal utility. |
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| 4526. |
As the variable input increased by one unit, total output falls. What can you say about the marginal productivity of variable input ? |
| Answer» Solution :Marginal PRODUCTIVITY of VARIABLE INPUT is NEGATIVE. | |
| 4527. |
One of the following is the characteristic of mail questionaire: |
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Answer» higher COST |
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| 4528. |
Give meaning of increasing returns to a factor. |
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Answer» |
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| 4529. |
Why is a firm under perfect competition a price taker and not a price maker? Explain |
| Answer» Solution :The no. of SELLERS is so LARGE that the share of each seller is INSIGNIFICANT in the total supply. Hence, an individual seller cannot influence the market price. Similarly, a single buyer's share in total purchase is so insignificant because of their large no. that an individual buyer cannot influence the market price. Under such CONDITIONS, price of a commodity is determined by the market forces of demand and supply and each buyer and seller has to accept the same price. As a RESULT, uniform price prevails in the market. | |
| 4530. |
Equilibrium price rises due to : |
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Answer» FAVOURABLE CHANGE in tastes |
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| 4531. |
Compare the census and sample methods of collecting data with reference to reliability, time involved and cost. |
| Answer» Solution :CENSUS method is more RELIABLE because in which each and every data is collected but SAMPLE method is less reliable because in which data is depend on only SAMPLES. Census method is much costly but sample method is not costly. Census method spends much time in COLLECTING each data but in sample method spends less time. | |
| 4532. |
A rational producer aims to operate in first phase of Law of vaiable Proportions as total product increases at increasing rate. |
| Answer» Solution :False. A rational producer aims to OPERATE in SECOND phase as total product is maximum and MARGINAL product of each VARIABLE factor is positive. | |
| 4533. |
What is the difference between a price index and a quantityindex ? |
| Answer» SOLUTION :Price index measures the relativeor percentagechange in the price level of certain goods and services. WHEREAS, quantity index measures the CHANGE in the physicalvolume of production,construction andemployment. | |
| 4534. |
Out of the many the four essential parts of the table are: 1. Title 2, Table number , 3. Source note , 4. Column heading What is the correct sequence of these parts in a table? |
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Answer» 4,3,2,1 |
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| 4535. |
Give consumer's optimum condition from indifference curve approach |
| Answer» SOLUTION :MRS= (Change in the quantity of good the consumer is WILLING to SACRIFICE)/ (Change in the quantity of good the consumer is willing to GAIN) | |
| 4536. |
When APP falls, what is the relation between MPP and APP ? |
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Answer» |
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| 4537. |
A producer starts a buisness by investing his own savings and hiring the labour. Identify implicit and explicit costs from this information. |
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Answer» SOLUTION :In the give situation: (i) The producer uses his own savings in the buisness which elsewhere would have earned interest. THEREFORE imputed value of the interest on the saving invested is implicit cost. (ii) The cost of HIRING labour from the market involves EXPENDITURE incurred by the producer. Therefore, wages PAID to the labour are explicit costs. |
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| 4538. |
Given market price of a good how does consumer decide as to how many of that good to buy. |
| Answer» Solution :In buying a GOOD a CONSUMER compares price of the good withmarginal utility (MU)of thegood . He decides to purchase the good only when`MUge`Price . SUPPOSE`PgtMU` , hewill continue to buy so long as MUIS either greater or atleast equal to P. Astheconsumer busy more and more UNITS MU diminishes . He busy upto the point when MU equals P.MU=P | |
| 4539. |
Calculate the MP of variable factor and indicate the various phases of Law of variable Proportions from the following schedule : |{:("Units of variable factor",0,1,2,3,4,5,6),("TP (in units)",0,50,110,150,180,180,150):}| |
Answer» SOLUTION :
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| 4540. |
Find out standard deviation of the distribution of population in 104 villages of a Tehsil, as given below by step-deviation method. Distribution of Population |
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Answer» |
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| 4541. |
Marginal product always rises when average product is increasing. |
Answer» Solution :FALSE. Marginal product can fall when average product is increasing as LONG as marginal product is more than average product. In FIG. 5.5, it happens from point G to E. 
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| 4542. |
MC curve intersects AC curve at its "______" point and AVCcurve at its "_____" point. |
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Answer» MAXIMUM, Minimum |
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| 4543. |
How are the total revenue of a firm, market price and quantity sold by the firm related to each other ? |
| Answer» Solution :TR=Price X Quantity SOLD =P x Q =(TOTAL SALES product) | |
| 4544. |
Giving reason comment on the shape of Production Possibilities Curve based on the following schedule, |
Answer» SOLUTION : SINCE MRT is constant, PP CURVE will be downward sloping straight line. |
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| 4545. |
Giving reason, comment on the shape of Production possibilities curve based on the following schedule, |
Answer» SOLUTION : As MRT is increasing, PPC will be DOWNWARD SLOPING and concave to the ORIGIN. |
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| 4546. |
What is the effect of increasing TR at a decreasing rate ? |
| Answer» SOLUTION :MR FALLS but REMAINS POSITIVE | |
| 4547. |
In which of the following types of market structure, a firm can earn abnormal profits in the long run? |
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Answer» PERFECT COMPETITION |
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| 4548. |
State the meaning and properties of producftion possibilities frontier. |
| 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. Properties of PPC (a) Concave to the origin : PPC curve is concave to the origin. This is because of the increasing opportunity cost i.e. in accordance with the law of increasing marginal opportunity cost. (b) Downward sloping curve: 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. | |
| 4549. |
Discuss the effect on equilibrium price and equilibrium quantity, when: (a) Supply is perfectly elastic and demand increases (b) Demand is perfectly inelastic and supply decreases |
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Answer» Solution :(a) When supply is PERFECTLY ELASTIC, an increase in demand results in a shift in demand curve towards right but the price does not change since the supply curve is horizontal or perfectly elastic. Only the EQUILIBRIUM quantity rises. (B) When demand is perfectly INELASTIC, a decrease in supply leads to a leftward shift in supply curve but the demand curve remains the same. Fall in supply leads to an increase in prices but the equilibrium quantity does not change since the demand curve is vertical or perfectly inelastic. |
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| 4550. |
Demand for a good is less elastic when : |
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Answer» Percentage change in price`gt` percentage change in QUANTITY DEMANDED. |
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