7498 + Interview Questions in Economics in Class 11 Page 93 InterviewSolution

4601.	Mention four main merits of census method.
Answer» SOLUTION :Intensive Study – Under census investigation, you must obtain data from each and every unit of the population. Further, it enables the statistician to study more than one ASPECT of all items of the population.Reliable Data – The data that a statistician collects through a census investigation is more reliable, representative, and accurate. This is because, in a census, the statistician observes every item personally.Suitable Choice – It is a great choice in situations where the different items of the population are not homogeneous.The basis of various SURVEYS – Data from a census investigation is USED as a basis in various surveys.

Discussion

4602.	When marginal revenue is zero, average revenue will be constant.
Answer» SOLUTION :FALSE : Marginal revenue is ZERO when total revenue is constant and when total revenue is costant, average revenue FALLS.

Discussion

4603.	Mark the following statements as true or false: (i) Statistics can only deal with quantitative data. (ii) Statistics solves economics problems. (iii) Statistics is of no use to economics with out data.
Answer» SOLUTION :(i) TRUE, (II) FALSE, (III) True

Discussion

4604.	Why does government intervene to affect the market equilibrium ?
Answer» Solution :Forces of demand and supply and the price MECHANISM solve the 'what' problem in a market oriented economy i.e., the equality between quantity demanded and quantity supplied is the coordination between buyers and sellers through the price mechanism. So, this invisible hand (price mechanism) COORDINATES between WANTS and PRODUCTION possibilities without the intervention of central authority (government). Price mechanism is an efficient system to solve central problems of an economy because whenever there is disequilibrium due to changes in demand and supply, equilibrium is restores due to demand-supply interaction. But price mechanism has its own drawbacks when the disequilibrium is not corrected by demand-supply interaction. Similarly, there are also other issues relating to equity, preservation of environment ETC. that a free market system cannot handle in efficient ways. At such times government intervenes to control market equilibrium.It becomes necessary for government to regulate the prices are either too high or too low in comparison to the desired levels.

Discussion

4605.	The difference between upper limit and lower limit of a class is known as :
Answer» range MAGNITUDE of a class INTERVAL FREQUENCY class limits Answer :B

Discussion

4606.	If the price of a commodity is below the equilibrium price, then quantity supplied is - than the quantity demanded. However, if the price is above in equilbirium price, then quantity supplied is - than the quantity demanded.
Answer» LESS, more Less, less More, less More, More Answer :(a)

Discussion

4607.	Commodity with diverse uses has generally less elastic demand.
Answer» Solution :The DEMAND will be highly ELASTIC because when price of such a commodity INCREASES, then its demand falls CONSIDERABLY as it is PUT to urgent uses only.

Discussion

4608.	A lot of people died andmany factories were destroyed in an earthquake. How will it affect the PPF ot the economy?
Answer» Solution :PPF of the economy will SHIFT to the left from PP to `P_(1)P_(1)` (REFER FIG. 1.8) It happens because the number of POSSIBLE combinations available with the economy has decreased, due to destruction of resources in the economy.

Discussion

4609.	Why does the govement own and run some services like post and telegraph, water supply, public transport etc. while they can be easily run and managed by the private sector ?
Answer» SOLUTION :This can be EXPLAINED with the HELP of elasticity of demand . Since the above mentioned services are public utility services and are generally inelastic innature. If their operation is ENTRUSTED to the private sector, they will see the profit motive primarily and exploit the consumers by charging heavy prices. Therefore to protect the interest of common man and achieve SOCIAL welfare, government itself manages these services.

Discussion

4610.	Explain how law of DMU causes inverse relation between price and demand
Answer» Solution :This law STATES that the SATISFACTION DERIVED from the consumption of successive units GOES on falling. Therefore we are prepared to PAY lesser. Hence more units will be demanded only at lower price.

Discussion

4611.	A consumer price index measures changes in: (i) retail prices(ii) wholesale prices(iii) producers prices
Answer» ANSWER :(i)

Discussion

4612.	In an oligopoly market there are:
Answer» Few sellers Few BIG sellers Either (a)or(B) NEITHER (a)nor(b) ANSWER :C

Discussion

4613.	If the good X and Y are substitutes. A rise in the price of X will result in a rightward shift in demand curve of Y. true or False? Given reason.
Answer» ANSWER :True, because a rise in price of X MAKES Y relatively CHEAPER whichleads to INCREASE in demand for Y.

Discussion

4614.	Give the meaning of excess demand for a product.
Answer» Solution :Excess DEMAND refers to a SITUATION when the quantity DEMANDED is more than the quantity SUPPLIED at the prevailing market PRICE.

Discussion

4615.	The elasticity of demand for a product will not be higher:
Answer» when it is considered a necessity by its buyers. When more SUBSITUTES for the PRODUCT are AVAILABLE. When it has several uses. When it is an EXPENSIVE commodity. Solution :N/a

Discussion

4616.	A graph showing________values of a variable on a graph paper is called arithmetic line-graph.(arithmetic/geometric)
Answer» SOLUTION :ARITHMETIC

Discussion

4617.	A consumer buy 200 units of a good at a price of Rs 20 per unit. Price elasticity of demand is (-)2. At what price will he be willing to purchase 300 units? Calculate
Answer» <P> Solution :`E_(d) = (Delta Q)/(Delta P) xx (P)/(Q)` `-2 = (100)/(Delta P) xx (20)/(200)` `-2 (DeltaP) = 10` `Delta P = -5` NEW Price = Original Price `(P) + Delta P = 20 + (-) 5 = RS 15`

Discussion

4618.	The maximum possible output for a firm with two units of labour (L) and ten units of capital (K), if its production function is given as : 5L+2K
Answer» 0 units 30 units 200 units 50 units Solution :B.

Discussion

4619.	What is price maker firm?
Answer» Solution :A PRICE maker FIRMS is ONE which can influence the marketprice of the product on its own.

Discussion

4620.	Total utility falls when Marginal utility is
Answer» Zero +ve -ve None of these Solution :C

Discussion

4621.	Excess supply of a commodity exists when its market price is greater than its equilibrium price.
Answer» Solution :When market PRICE is greater than the EQUILIBRIUM price, then there is EXCESS supply as markets supply is more than the market DEMAND.

Discussion

4622.	What is the meaning of implicitcost ?
Answer» Solution :Implicit COST is the estimated value of the inputs SUPPLIED by the OWNERS including normalprofit. Forexample, interset on own capital, rent of ownland.

Discussion

4623.	Distinguish between random sampling and systemetic sampling. Give suitable examples.
Answer» Solution :Under SIMPLE random sampling, a sample of items is chosen randomly from a population, and each item has an equal probability of being chosen. Simple random sampling uses a table of random numbers or an electronic random number generator to SELECT items for its sample. Systematic sampling involves selecting items from an ORDERED population USING a skip or sampling interval. The use of systematic sampling is more appropriate compared to simple random sampling when a project's budget is tight and requires simplicity in execution and understanding the results of a STUDY. Systematic sampling is better than random sampling when data does not exhibit patterns and there is a low risk of data manipulation by a researcher.

Discussion

4624.	PPF is concave to the origin because of:
Answer» Increasing MRT Diminishing MRT Constant MRT None of these. Solution :A. PPC is concave to the point of origin because to PRODUCE each ADDITIONAL unit of Good 1, more units of Good 2 will have to be sacrificed. Opportunity cost of producing every additional unit of Good 1 tends to increase in terms of the loss of production of Good 2. Production will act UPON the LAW of increasing marginal opportunity cost.

Discussion

4625.	In case of inclusive classes the first step is to convert the same into exclusive classes by using adjustment value to change the limits ( See section 4.3.3.). Given the following frequency distribution with inclusive classes. The adjustment value for converting inclusive classes into exclusive classes is 0.5(=(6-5)/(2)). Deduct 0.5 from all the lower limits and add 0.5 to all upper limits before applying the method of calculation.
Answer» Solution : `l_(1)=8.5` `Delta_(1)=8-5=3` `Delta_(2)=8-2=6` `i=8.5-5.5=3` SUBSTITUTING the values : Mode `=l_(1)+(Delta_(1))/(Delta_(1)+Delta_(2))xxi` `=8.5+(3)/(3+6)xx3=8.5+(9)/(9)=9.5`

Discussion

4626.	Why is the demand curve of a commodity negatively sloped? Explain.
Answer» Solution :1. The law of diminishing MARGINAL utility. 2. Income effect. 3. SUBSTITUTION effect. 4. SIZE of consumer group or market size. 5. Alternative uses of the commodity.

Discussion

4627.	How is average fixed cost curve shaped ?
Answer» Solution :Average fixed cost curve slopes DOWNWARDS from LEFT to right and is a RECTANGULAR HYPERBOLA.

Discussion

4628.	What do you mean by contraction in supply ?
Answer» Solution :It means a fall in the quantity SUPPLIED due to DECREASE in PRICE, ASSUMING other factors constant.

Discussion

4629.	Coefficient of variation is a percentage expression of:
Answer» Mean deviation QUARTILE deviation STANDARD deviation NONE of these SOLUTION :C

Discussion

4630.	What is meant by simple bar diagram ? What their types ?
Answer» Solution : A SIMPLE bar chart consists of a grid and some vertical or horizontal columns (bars). Each COLUMN represents quantitative data. There are several DIFFERENT types of charts and graphs. The four most COMMON are probably LINE graphs, bar graphs and histograms, pie charts, and Cartesian graphs.

Discussion

4631.	What is the relationship between TVC and MC?
Answer» SOLUTION :AREA under the MC CURVE = TVC or `TVC = SigmaMC`

Discussion

4632.	Briefly discuss the relationship between : (i) AP and MP, (ii) TP and MP
Answer»

Discussion

4633.	What does division of labour mean ?
Answer» Solution :It refers to ALLOCATION of work among WORKERS according to their skills and EFFICIENCY .

Discussion

4634.	'Demand and supply are like two blades of a pair of scissors''. Comment
Answer» Solution :The given statement is CORRECT. Both the blades of a pair of scissors are equally important to cut a plece of CLOTH. Similarly, both demand and supply are needed for determining price in the market. There is no use for demand for a PRODUCT if there is no supply for the product and supply is not needed if there is no demand for the product. One of the TWO may play more active role in price determination in the SHORT run. But both are needed to determine the price in the long run.

Discussion

4635.	Distinguish between demand by an individual consumer and market demand of a good. Also state the factors leading to fall in demand by an individual consumer.
Answer» Solution :Demand by an individual refers to the quantity of a good the consumer is willing to buy at a price during a PERIOD of TIME. While market demand refers to the quantity of a good the consumers of that good are willing to buy at a price during a period of time The factors leading to fall in demand by an individual consmers are : (i) RISE in own price of the normal good (ii) Fall in the price of substitude good (iii) Rise in the price of complementary good (iv) Fall in the income of the consumers in case of a normal good.

Discussion

4636.	What is meant by Oligopoly? Discuss the features of Oligopoly
Answer» Solution :Oligopoly refers to a market situation in which there are few firms selling homogeneous or differentiated products.The main features of oligopoly are as follows:1) Few firms: Under oligopoly, there are few large firms. The exact no. of firms is not defined. Each firm produces a SIGNIFICANT portion of the total output. There exists severe competition among different firms and each firm try to manipulate both PRICES and volume of production to outsmart each other.2) Interdependence: 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.3) Non- Price Competition: 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 other methods like advertising, better services to customers, etc. to compete with each other.4) Barriers to entry of firms: The main reason for few firms under oligopoly is the barriers, which prevent entry of new firms into the industry. Patents, requirements of large capital, control over crucial raw materials, etc, are some of the reasons, which prevent new firms from entering into industry. Only those firms enter into the industry which are able to cross these barriers. As a result, firms can earn abnormal profits in the long run.5) Role of selling costs: Due to severe competition and interdependence of the firms, various sales promotion techniques are used to promote sales of the product. Advertisement is in full swing under oligopoly, and many a times advertisement can become a matter of life and death. A firm under oligopoly relies more on non-price competition.6) Group Behavior: Under oligopoly, there is complete interdependence among different firms. So, price and output decisions of a particular firm directly influence the competing firms. Instead of independent price and output strategy, oligopoly firms PREFER group decisions that will protect the interest of all the firms. Group behavior means that firms tend to behave as if they were a single firm even though individually they retain their independence.7)Nature of the product: The firms under oligopoly may produce homogeneous or differentiated product. If the firms produce a homogeneous product, like cement or steel, the industry is called a pure or PERFECT oligopoly. If the firms produce a differentiated product like automobiles, the industry is called differentiated or imperfect oligopoly.8) Indeterminate Demand Curve: Under oligopoly, the exact behavior pattern of a producer cannot be determined with certainty. So, demand curve faced by oligopolist is indeterminate. As firms are inter-dependent, a firm cannot ignore the reaction of the rival firms. So, demand curve keeps on shifting and it is not definite, rather it is indeterminate.

Discussion

4637.	Why is indifference curve convex to the origin ?
Answer» SOLUTION :INDIFFERENCE Curve is convex to the origin because MRS diminishes i.e, a consumer is prepared to give up less units of ONE COMMODITY in order to gain more of the other.

Discussion

4638.	With the introduction of GST, the overall tax liability of the producers have decreased. How will it affect the supply curve of the good?
Answer» Solution : There will be a rightward SHIFT in the supply curve of the GOOD as the supply increases of that PARTICULAR commodity.

Discussion

4639.	In price of petrol is expected to increase in future, what will be effect on its demand in the present period ?
Answer» Solution :The DEMAND of petrol will rise in present period as future PRICES are EXPECTED to increase.

Discussion

4640.	What will be the shape of demand curve for a commodity whose expenditure rises due to increase in price when its pirce elasticity is zero ?
Answer» Solution :THEDEMAND curve will be a VERTICAL Straight LINE parallel to Y-axis as DMAND will remain constant DUE to perfectly inelasticdemand.

Discussion

4641.	How is price elasticty related to a horizontal straight line demand curve ?
Answer» Solution :A HORIZONTAL STRAIGHT LINE dmeand curve is perfectly elastic `(E_(d)=oo)`

Discussion

4642.	When is demand for a commodity called ealstic?
Answer» SOLUTION :The demand for a good is ELASTIC when PERCENTAGE change in quantity demanded is GREATER than the percentage change in price which IMPLIES the price elasticity of demand is greater than one.

Discussion

4643.	Which of the following is a preferred method of statistical studies, and why ? (a) Census(b) Sample
Answer» Answer :Sample methodof STATISTICAL investigation is generally preferred to the CENSUS METHOD because the former is LESS expansive in terms of the TIME, money and effots involved. However, for the successful application of the sample method, it is very essential that the sample items represents the characterstics of population as a whole.

Discussion

4644.	Two commmodities A andB can be inferred as close substitudes of each other if :
Answer» Rise in PRICE of one leads to an INCREASE in demand of other and vice-versa Rise in price of one leads to a decrease in demand of other and vice-versa FALL in price of one LEAD to fall in demand of other one, but not the other way round Rise in price of one lead to rise in demand of other one, but not the other way round Answer :A

Discussion

4645.	If the firms under oligopoly produce a differentiated product, the industry is called
Answer» pure oligoply imperfect oligopoly COOPERATIVE oligopoly non-copperative oligopoly. ANSWER :B

Discussion

4646.	Which part of economic theory aims to determine income and employment level of the economy?
Answer» Microeconomics Macroeconomics NEITHER (a) nor (b) Both (a) and (b) Solution :B. Microeconomics studies individuals and business decisions, while macroeconomics analyzes the decisions made by countries and governments. Microeconomics focuses on supply and DEMAND, and other FORCES that determine price LEVELS, making it a bottom-up approach

Discussion

4647.	Name the central problems of an economy.
Answer» SOLUTION :(i) What to PRODUCE and in what QUANTITIES? (II) How to produce ? (III) For whom to produce?

Discussion

4648.	What is the behaviour of average fixed cost as output is increased. Why is it so?
Answer» Solution :Average fixed cost is fixed cost per unit of output. As the TOTAL NUMBER of UNITS of the good produced increases, the average fixed cost decreases because the same amount of fixed costs is being SPREAD over a larger number of units of output.

Discussion

4649.	What is meant by long run (long period) ?
Answer» Answer :A LONG period is a TIME period during which a firm can CHANGE all factors of production including machinery, factory building, organization, LABOUR etc.

Discussion

4650.	______________method is suitable for small size of population . (Census/Sampling)
Answer» SOLUTION :CENSUS

Discussion

Explore topic-wise InterviewSolutions in .

Mention four main merits of census method.

When marginal revenue is zero, average revenue will be constant.

Mark the following statements as true or false: (i) Statistics can only deal with quantitative data. (ii) Statistics solves economics problems. (iii) Statistics is of no use to economics with out data.

Why does government intervene to affect the market equilibrium ?

The difference between upper limit and lower limit of a class is known as :

If the price of a commodity is below the equilibrium price, then quantity supplied is - than the quantity demanded. However, if the price is above in equilbirium price, then quantity supplied is - than the quantity demanded.

Commodity with diverse uses has generally less elastic demand.

A lot of people died andmany factories were destroyed in an earthquake. How will it affect the PPF ot the economy?

Why does the govement own and run some services like post and telegraph, water supply, public transport etc. while they can be easily run and managed by the private sector ?

Explain how law of DMU causes inverse relation between price and demand

A consumer price index measures changes in: (i) retail prices(ii) wholesale prices(iii) producers prices

In an oligopoly market there are:

If the good X and Y are substitutes. A rise in the price of X will result in a rightward shift in demand curve of Y. true or False? Given reason.

Give the meaning of excess demand for a product.

The elasticity of demand for a product will not be higher:

A graph showing________values of a variable on a graph paper is called arithmetic line-graph.(arithmetic/geometric)

A consumer buy 200 units of a good at a price of Rs 20 per unit. Price elasticity of demand is (-)2. At what price will he be willing to purchase 300 units? Calculate

The maximum possible output for a firm with two units of labour (L) and ten units of capital (K), if its production function is given as : 5L+2K

What is price maker firm?

Total utility falls when Marginal utility is

Excess supply of a commodity exists when its market price is greater than its equilibrium price.

What is the meaning of implicitcost ?

Distinguish between random sampling and systemetic sampling. Give suitable examples.

PPF is concave to the origin because of:

Why is the demand curve of a commodity negatively sloped? Explain.

How is average fixed cost curve shaped ?

What do you mean by contraction in supply ?

Coefficient of variation is a percentage expression of:

What is meant by simple bar diagram ? What their types ?

What is the relationship between TVC and MC?

Briefly discuss the relationship between : (i) AP and MP, (ii) TP and MP

What does division of labour mean ?

'Demand and supply are like two blades of a pair of scissors''. Comment

Distinguish between demand by an individual consumer and market demand of a good. Also state the factors leading to fall in demand by an individual consumer.

What is meant by Oligopoly? Discuss the features of Oligopoly

Why is indifference curve convex to the origin ?

With the introduction of GST, the overall tax liability of the producers have decreased. How will it affect the supply curve of the good?

In price of petrol is expected to increase in future, what will be effect on its demand in the present period ?

What will be the shape of demand curve for a commodity whose expenditure rises due to increase in price when its pirce elasticity is zero ?

How is price elasticty related to a horizontal straight line demand curve ?

When is demand for a commodity called ealstic?

Which of the following is a preferred method of statistical studies, and why ? (a) Census(b) Sample

Two commmodities A andB can be inferred as close substitudes of each other if :

If the firms under oligopoly produce a differentiated product, the industry is called

Which part of economic theory aims to determine income and employment level of the economy?

Name the central problems of an economy.

What is the behaviour of average fixed cost as output is increased. Why is it so?

What is meant by long run (long period) ?

______________method is suitable for small size of population . (Census/Sampling)