Board Paper of Class 12-Science 2008 Economics (SET 1) - Solutions

Define ‘Marginal Rate of Transformation’.

What is a demand schedule?

Define ‘production function’.

What is ‘market supply’?

Define ‘equilibrium price’.

Explain the central problem of ‘choice of technique’.

Price elasticity of demand of a good is (−) 1. At a given price the consumer buys 60 units of the good. How many units will the consumer buy if the price falls by 10 per cent?

Given the market price of a good, how does a consumer decide as to how many units of that good to buy? Explain.

What is the likely effect on the supply of a good if the prices of the inputs used in production of that good fall? Explain.

Explain what happens to the profits in the long run if the firms are free to enter the industry.

OR

Explain what happens to losses in the long run if the firms are free to leave the industry.

Explain producer’s equilibrium using a schedule. Use total cost and total revenue approach.

OR

Distinguish between (i) fixed cost and variable cost giving examples and (ii) average cost and marginal cost giving an example.

Draw supply curves with price elasticity of supply throughout equal to (i) zero, (ii) one, (iii) infinity and (iv) less than one.

Complete the following table:

Explain the effect of the following on demand for a good:

(i) Rise in income.

(ii) Rise in prices of related goods.

Explain, with the help of numerical examples, the effect on total output of a good when all the inputs used in production of that good are increased simultaneously and in the same proportion.

Given market equilibrium of a good, what are the effects of simultaneous increase in both demand and supply of that good on its equilibrium price and quantity.

OR

Explain the implications of the following:

(i) The feature differentiated products’ under monopolistic competition.

(ii) The feature large number of seller’s under perfect competition.