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4701.

If more is demanded at the same price or the same quantity is demanded at a higher price, it is known as extension of demand.

Answer»

SOLUTION :It is KNOWN as 'Increase in DEMAND'
Discussion
4702.

A consumer consumes only two goods X and Y whose price are Rs 5 and Rs 6 per unit respectively. If the consumer chooses a combination of the two goods with marginal utility of X equal to 35 and that of Y eqaul to 30, is the consumer in equilibrium? Given reason. What will a rational consumer do in this situation ? Use utility analysis.

Answer»

Solution :Given `P_(X) = 5, P_(Y) = 6 " and MU_(X) = 35, MU_(Y) = 30`. A consumer will be in EQUILIBRIUM when `(MU_(X))/(P_(X)) = (MU_(Y))/(P_(Y))`
Substituting values, we FIND that:
`(35)/(5) gt (30)/(6) " or " (MU_(X))/(P_(Y)) gt (MU_(Y))/(P_(Y))`
since per rupee `MU_(X)` is higher than per rupee `MU_(Y)`, consumer is not in equilibrium. The consumer will buy more of X and less of Y. As a result `MU_(X)` will fall and `MU_(X)` will fall and `MU_(Y)` will rise. The REACTION will continue till `(MU_(X))/(P_(X)) " and " (MU_(Y))/(P_(Y))`are equal and consumer is in equilibrium.
Discussion
4703.

Why should we measure dispersion about some particular value? Do the range and quartile deviation measure dispersion about some values?

Answer»

Solution :Firstly, with these methods we can assess how PRECISE is the central tendency as the representative value of all the OBSERVATIONS in the SERIES. Secondly, we can assess how SCATTERED are the actual observations from their representative value.
All measures of dispersion do not measure variation about some particular value of the series such as range and quartile deviation.
Discussion
4704.

The necessary conditions under utility approach to attain consumer's equilibrium in case of two commodity is:

Answer»

`(MI_(X))/(P_(X)) = (MU_(Y))/(P_(Y))`
`MRS_(X) = (P_(X))/(P_(Y))`
`MU_(x) = P_(x)`
NONE of these

Answer :A
Discussion
4705.

A consumer has total money income of Rs 250 to be spent on two goods X and Y with prices of Rs 25 and Rs 10 per unit respectively. On the basis of the information given, answer the following questions: (a) Given the equation of the budget line for the consumer. (b) What is the value of slope of the budget line? (c) How many units can be consumer buy if he is to spend all his money income on good X? (d) How does the budget line change if there is a fall in price of good Y ?

Answer»

Solution :(a) `P_(x)Q_(x) + P_(y)Q_(y) = M`
`25Q_(x) + 10Q_(y) = 250`
(b) SLOPE of Budget Line `= (-)P_(x)//P_(y) = (-) 25//10 = (-) = 2.5`
(c) If `Q_(y)` is to be Zero
`25Q_(x) + 10 Q_(y) = 250`
`25Q_(x) + 10(0) = 250`
`Q_(x) = 250//25 = 10` units
If `P_(y)` falls, the consumer will be able to buy more of good Y in the same money income pushing the Y-intercept of the Budget Line away from original, Keeping the X-intercept constant.
Discussion
4706.

Explain the shift in budget line.

Answer»

Solution :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
4707.

Find out arithmetic mean from the following distribution by Short-cut Method: {:("Items",10-8,8-6,6-4,4-2,2-0),("Frequency"," "10," "8," "6," "4," "2):}

Answer»


ANSWER :ARITHMETIC MEAN = 6.33
Discussion
4708.

Why do black markets exists ?

Answer»


SOLUTION :In a black market, goods are sold at a price higher than the MAXIMUM price FIXED by the government. Black MARKETS exist because buyers are ready to pay a price fixed by the market in ORDER to buy the desired quantity of good.
Discussion
4709.

Which of the following is a determinant of market demand ?

Answer»

INCOME of the consumers
Season and weather
Price of RELATED goods
All of the above

Answer :D
Discussion
4710.

When two variables change in the same direction, then such a collertion is called :

Answer»

negative
positive
no correlation
all of above

Solution :B
Discussion
4711.

price elasticity of demand measure percentage change in quantity demanded of a good due to precentage change in

Answer»

PRICE of COMPLEMENTARY goods
price of the good
income of a consumer
tastes of a consumer.

Answer :B
Discussion
4712.

State the two types of price index numbers.

Answer»

Solution :The TWO types of PRICE INDEX numbers are:
(i) CONSUMER Price Index, and
(II) WholesalePrice Index.
Discussion
4713.

Mention any three factors that affect the price elasticity of demand for commodity.

Answer»

Solution :1. Availability / NUMBER of close substitutes.
2. PROPORTION of total expenditure SPENT on the commodity.
3. Nature of the commodity.
Discussion
4714.

Explain why the demang curve facing a firm under monopolistic competition is negatively sloped ?

Answer»

SOLUTION :Demand curve facing a FIRM under monopolistic COMPETITION is negatively sloped. It is because there are close substitutes available and the firm is not a price taker. It can sell more only by REDUCING the price. HIGHER the price, lower will be the demand and vice versa.
Discussion
4715.

Define market.

Answer»

SOLUTION :It refers to a region where the buyers and sellers of a COMMODITY come in CONTACT with each other to carry the transactions of purchase and SALE of the commodity.
Discussion
4716.

What is meant by presentation of data?

Answer»


Solution :The PRESENTATION of DATA MEANS exhibition of the data in such a clear and ATTRACTIVE manner that these are easily understood and analysed.
Discussion
4717.

Producer's equilibrium is determined where

Answer»

MR GT MC
MR LT MC
MR = MC
all of these.

Answer :C
Discussion
4718.

Define market supply.

Answer»

Solution :Market supply refers to the QUANTITY of a commodity that all firms are willing and able to offer for sale, at each possible PRICE during a given PERIOD of TIME.
Discussion
4719.

what are the effects of 'price-floor' (Minimum Price Ceiling) on the market of a good? Use diagram.

Answer»

Solution :When GOVERNMENT imposes lower limit on a price that may be charged for a particular good or service, it is CALLED Minimum Price Ceiling. e.g. price `OP_(1)`.At this price, the producers are willing to supply `P_(1)B" or "(OQ_(2))`, while consumers demand only `P_(1)A(= OQ_(1))`. Unable to sell. all they want to sell, the producers may try to illegally sell below the minimum price.
Discussion
4720.

What is the relation between AverageVariable Cost and Average Total Cost, If Total Fixed Cost is zero ?

Answer»

Solution :Average VARIABLE Cost is equal to Average TOTAL Cost.
Discussion
4721.

"An economy always produces on, but not inside, a PPF", Defend or refute.

Answer»

Solution :The statement is REFUTED. An economy operates on PPF, only when RESOURCES are fully and efficiently UTILIZED. It means, if there is unemployment or inefficient use of resources, then the economy may operate inside the PPF. So then economy may operate at point 'H' (Fig.1.14) in ADDITION to the points on the curve AB on PPF.
Discussion
4722.

Giving reason, state the impact of each of following on demand curve of a normal good 'X' if: (i) Price of its complementary goods falls. (ii) News reports claim that consumptions of product X has effect on human health. (iii) Income of consumer increases.

Answer»

Solution :(i) When price of COMPLEMENTARY good falls, its demand would increase. Demand of good X will also increase, as X is complementary of the good hence demand curve of good X will shift to its right.
(ii) Demand of good X would decrease as CONSUMERS will tend to consume less due to NEWS reports of HARMFUL effects of good X on their health
(iii) As income of consumer increases, he would demand more of the good as his DISPOSABLE income increases and he is in a position to buy more of good X.
Discussion
4723.

Define demand. Name the factors affecting market demand.

Answer»

SOLUTION :Demand is the desire to buy a commodity backed with sufficient purchasing power and the WILLINGNESS to spend.
Factors affecting market demand are:-
1. Size of population.
2. Distribution of income.
3. Season and climate.
4. Tastes and preferences.
5. Price of RELATED goods.
Discussion
4724.

What is market equilibrium.

Answer»

SOLUTION :MARKET equilibrium refers to the SITUATION when market DEMAND is EQUAL to the market supply.
Discussion
4725.

The shift in PPC is caused due to:

Answer»

Increase in resources for production of both the GOODS
Increase in resources for production of butter only
Increase in resources for production of guns only
None of these.

Solution :A. 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
4726.

What is the difference between direct inervention and indirect intervention ?

Answer»


SOLUTION :Under DIRECT INTERVENTION, prices are fixed directly by the government. Price CEILING and Support price are the EXAMPLES of direct intervention.
Discussion
4727.

In which phase pf Law of Variable Proportions, a rational firm aims to operate ?

Answer»

SOLUTION :DIMINISHING returns to a factor (PHASE II).
Discussion
4728.

Name the kinds of goods for which maximum price ceiling is used by government.

Answer»


Solution :Maximum price ceiling is USED by government for ESSENTIAL goods like wheat, sugar, kerosene ETC.
Discussion
4729.

Mention three reasons for occurrence of the phase of increasing returns to a factor.

Answer»


ANSWER :(i)BETTER utilisation of the fixed FACTOR
(ii) Increased EFFICIENCY of variable factor.
(iii) Better COORDINATION between the fixed and variable factor.
Discussion
4730.

Gold if price is expected to rise in future.

Answer»


ANSWER :SHIFT to RIGHT
Discussion
4731.

Which is the following formulae is used to find out inter quartile range?

Answer»

`(Q_(1)-Q_(3))/(2)`
`(Q_(1)+Q_(3))/(2)`
`Q_(1)-Q_(3)`
`Q_(1)+Q_(3)`

Solution :C
Discussion
4732.

Under perfect competition, market price can be influenced by both buyers and sellers.

Answer»

SOLUTION :Neither sellers nor BUYERS can influence the MARKET price under perfect COMPETITION.
Discussion
4733.

Arranging the data in different classes according to a given order is called 'series'. (True / False)

Answer»


ANSWER :TRUE
Discussion
4734.

Explain producer's equilibrium through MR and MC approach when a firm is able to sell more quantiy of output: (i) At the same price (ii) Only by lowering the price.

Answer»
Discussion
4735.

The title of the table must answer three questions : (1) Where, (2) When and (3) What. What is the correct sequence?

Answer»

Where, what, when
When, what, where
What, where, when
When , where, what

SOLUTION :C
Discussion
4736.

To what extent, can a firm influence the price under: (a) Perfect Competition, (b) Monopolistic Competition, (c) Monopoly, and (d) Oligopoly

Answer»
Discussion
4737.

The following table shows marks obtained by the students of a class in their test in English: {:("Marks",0-10,10-20,20-30,30-40,40-50),("Number of Students"," "20," "24," "40," "36," "20):} Calculate arithmetic mean using Step-deviation method.

Answer»

SOLUTION :
`(sumfd')/(sumf)=12/140=0.086`
`"MEAN, "barX=A+(sumfd')/(sumf)XXC`
`=25+0.086xx10`
`=25+0.86`
`=25.86`
ARITHMETIC Mean = 25.86 MARKS.
Discussion
4738.

The law of scarcity:

Answer»

Does not apply to RICH, developed contries.
Applies only to the LESS developed contries.
Implies that consumers want will be satisfied in a socialistic system.
Implies thet CONSUMER's wants will never be COMPLETELY satisfied.

Solution :D. The LAW of scarcityImplies thet consumer's wants will never be completely satisfied.
Discussion
4739.

Why is quartile deviation not a suitable measure of dispersion ? What are its alternatives and why ?

Answer»
Discussion
4740.

How in any one way can an economy increase its production capacity?

Answer»

SOLUTION :Production capacity can be increased through upgradation in production TECHNOLOGY.
Discussion
4741.

Quartile deviation is not affected by the extreme values because it is based on :

Answer»

25% of the centralvalue of the series
50% of the centralvalue of the series
75% of the centralvalue of the series
80% of the centralvalue of the series

Solution :B
Discussion
4742.

The mean of 5 observations is 7. Later on, it was found that two observations 4 and 8 were wrongly taken instead of 5 and 9. Find the corrected mean.

Answer»

Solution :GIVEN: `N =5, barX=7`
`""barX=(sumX)/N`
Or, `""sum X=N XX barX`
`:.""sumX"(Wrong)" = 5 xx 7 = 35`
CORRECT `sumX = 35` + Correct items - Incorrect items
`""=35+5+9-4-8=37`
Correct `barX=("Correct" sumX)/N= 37/5`
`= 7.4`
Thus, Corrected Mean = `7.4`.
Discussion
4743.

Under 'Law of Variable Proportions', factor ratio keeps on changing.

Answer»

Solution :True. The proportion or RATIO between fixed and variable keeps on CHANGING, when additional UNITS of variable FACTOR are employed.
Discussion
4744.

The average marks of 39 students of a class is 50. The marks obtained by 40th student are 39 more than the average marks of all the 40 student are 39 more than the average marks of all the40 students. Find the mean marks of all the 40 students.

Answer»

Solution :LET the mean marks of all the 40 STUDENTS = `barX`
Given: `barX_(1)=50,N_(1)= 39`
Marks OBTAINED by the 39 students
`sum X =50 xx 39 = 1,950`
Marks obtained by the 40th student
`= barX+39`
Mean marks of all the 40 students
` barX = (sumX)/N`
`barX= (1,950+barX+39)/40 `
`40 barX = 1,989 + barX`
`40 barX - barX = 1,989`
`39 barX = 1,989`
` barX = (1,989)/39 = 51 `
Thus, Mean marks of all the 40 students = 51.
Discussion
4745.

What is a cartel ?

Answer»
Discussion
4746.

According to one of the assumption of Law of Diminishing Marginal Utility, there should be ____ between the consumption of one unit and another unit

Answer»

EQUAL TIME gap
No time gap
Long time gap
Any of these

Answer :B
Discussion
4747.

Find out the arithmetic mean from the following data: {:("Marks (less than)"," "5,10,15,20,25,30),("Number of Students",22310,23,30,54,69,80):}

Answer»

SOLUTION :Since, we are GIVEN cumulative FREQUENCY distribution, at first we will convert the series into a simple frequency distribution and then, find out the MEAN marks.

`barX=A+(sumfd')/(sum f)xxC`
`=12.5 +54/80xx5`
`=12.5+3.375 = 15.875`
Arithmetic Mean = `15.875`.
Discussion
4748.

Cigarette smoking is injurious to health. How can the government reduce it consumption but onlythrough the normal market forces. Explain the chain of effects of government's action.

Answer»

SOLUTION :Government can impose HEAVY taxes in production of cigarette. Given price, producers' supply "decreases". This creates EXCESS demand leading to COMPETITION between buyers. Price starts RISING. As a result demand starts falling and supply rising till a new equilibrium is established but only at a higher price leading to fall in consumption of cigarette.
Discussion
4749.

Name the branches of economics.

Answer»

Solution :TWO brances of economics are : (i) MICROECONOMICS (II) MACROECONOMICS
Discussion
4750.

Define Marginal Rate of Transrormation'.

Answer»

SOLUTION :MARGINAL Rate of Transformation (MRT) is the RATIO of units of one good sacrificed to produce one more unit of the other good.
Discussion