Welcome to the NCERT Solutions for Class 12 Micro Economics. This page offers chapter-wise solutions designed to help students grasp key concepts easily. With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.
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Chapter 1 Introduction to Micro Economics
Economy refers to the nature and level of economics activities in an area. It shows how the people of the concerned area earn their living. (a) market economies are those economies, in which economic activities are left to the free play of the market forces. (b) centrally planned economies are those economies where the course of economic activities is dictated or decided by some central authority or by the government. (c) Mixed economies share the characteristics of both market and centrally planned economies. The basic economic activities of life are: production, exchange and consumption of goods and services are among the basic economic activities of life. Every society must decide on how to use its scarce resources. Hence, the allocation of scarce resources and distribution of the final goods and services are the final goods and services are the central problems of any economy. In a centrally planned economy, the government or the central authority plans all the important decisions regarding production, exchange and consumption of goods and services are made by the government. It is the value of a factor in its next best alternative use. It shows different combinations of two goods, which can be produced with given resources and technology.
- Chapter 2 Theory of Consumer Behaviour
- Chapter 3 Production and Costs
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Chapter 4 The Theory of the Firm under Perfect Competition
A market in which we find perfect competition between a large number of buyers and a large number of sellers of a homogeneous product and uniform price is called a perfect competition market. A firm produces and sells a certain amount of a good. It is the difference between revenue and cost. Break even for a firm occurs when it is able to cover its all costs of production. It occurs when a firm is just able to cover its variable costs increasing the loss of fixed cost of production. A producer is said to be in equilibrium when he maximizes his profit or minimizes his losses. It means the amount of a commodity that firms are able and willing to offer for sale in the market in a given period of time and at a given price. It means the amount of a commodity that firms are able and willing to offer for sale in the market in a given period of time and at a given price. Tabular statements of relationship between price and supply of commodities is called supply schedule. Graphical presentation of relationship between price and supply of a commodity is called supply curve. The market supply curve for a commodity shows the relationship between the price of a given commodity and quantity sellers are inclined to sell. It is a measure of the degree of responsiveness of quantity supplied to changes in the commodity own prices.
- Chapter 5 Market Equilibrium
- Chapter 6 Non-competitive Markets
Popular Questions of Class 12 Micro Economics
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The market price of a good changes from Rs 5 to Rs 20. As a result, the quantity supplied by a firm increases by 15 units. The price elasticity of the firm’s supply curve is 0.5. Find the initial and final output levels of the firm.
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A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increases to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm’s supply curve?
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What is the supply curve of a firm in the long run?
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How does the imposition of a unit tax affect the supply curve of a firm?
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Distinguish between a centrally planned economy and a market economy.
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A consumer wants to consume two goods. The prices of the two goods are Rs 4
and Rs 5 respectively. The consumer’s income is Rs 20.
(i) Write down the equation of the budget line.
(ii) How much of good 1 can the consumer consume if she spends her entire
income on that good?
(iii) How much of good 2 can she consume if she spends her entire income on
that good?
(iv) What is the slope of the budget line?
Questions 5, 6 and 7 are related to question 4. - Q:-
How will a change in the price of coffee affect the equilibrium price of tea? Explain the effect on equilibrium quantity also through a diagram.
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Suppose your friend is indifferent to the bundles (5, 6) and (6, 6). Are the preferences of your friend monotonic?
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Consider the demand curve D (p) = 10 – 3p. What is the elasticity at price 53?
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List the three different ways in which oligopoly firms may have.
Recently Viewed Questions of Class 12 Micro Economics
- Q:-
Consider a market with two firms. The following table shows the supply schedules of the two firms: the SS1 column gives the supply schedule of firm 1 and the SS2 column gives the supply schedule of firm 2. Compute the market supply schedule.
Price (Rs.) SS1 (units) SS2 (units) 0
1
2
3
4
5
60
0
0
1
2
3
40
0
0
1
2
3
4 - Q:-
Discuss the central problems of an economy.
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What is the relation between market price and marginal revenue of a price-taking firm?
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How are the equilibrium price and quantity affected when?
(a) Both demand and supply curves shift in the same direction?
(b) Demand and supply curves shift in opposite directions?
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What happens to the budget set if both the prices as well as the income double?
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How is the wage rate determined in a perfectly competitive labor market?
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Explain the relationship between the marginal products and the total product of an input.
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How is the equilibrium number of firms determined in a market where entry and exit is permitted?
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What is the reason for the long run equilibrium of a firm in monopolistic competition to be associated with zero profit?
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When does a production function satisfy decreasing returns to scale?