Board Paper of Class 12-Science 2011 Economics (SET 2) - Solutions

Define an economy?

When is a firm called price maker?

Define a budget line.

What is ‘decrease’ in supply?

Define Production Function.

How is production possibility curve affected by unemployment in the economy? Explain.

When price of a good is Rs. 12 per unit, the consumer buys 24 units of that good. When price rises to Rs. 14 per unit, the consumer buys 20 units. Calculate price elasticity of demand.

Distinguish between explicit cost and implicit cost and give examples.

Draw in a single diagram the average revenue and marginal revenue curves of a firm which can sell any quantity of the good at a given price. Explain.

Explain the implications of the feature ‘large number of buyers’ in a perfectly competitive market.

OR

Explain the implications of the feature ‘homogeneous products’ in a perfectly competitive market.

A consumer consumes only two goods X and Y. At a consumption level of these two goods, he finds that the ratio of marginal utility to price in case of X is higher than in case of Y. Explain the reaction of the consumer.

Explain how rise in income of a consumer affects the demand of a good. Give examples.

Define marginal cost. Explain its relation with average cost

OR

Define variable cost explain the behaviour of total variable cost as output increases.

What is producer’s equilibrium? Explain the conditions of producer’s equilibrium through the ‘marginal cost and marginal revenue’ approach. Use diagram.

Explain any three properties of Indifference Curves.

Market for a good is in equilibrium. There is ‘increase’ in supply of the good. Explain the chain of effect of this change. Use diagram.

OR

Distinguish between ‘non-collusive’ and ‘collusive’ oligopoly. Explain the following features of oligopoly:

(i) Few firms

(ii) Non-price competition