Class 12 Micro Economics - Chapter Introduction to Micro Economics NCERT Solutions | What do you mean by the production possi

Distinguish between a centrally planned economy and a market economy.

Distinguish between microeconomics and macroeconomics.

What is a production possibility frontier?

Discuss the central problems of an economy.

Discuss the subject matter of economics.

What do you understand by normative economic analysis?

What do you understand by positive economic analysis?

Explain the concept of a production function

What would be the shape of the demand curve so that the total revenue curve is?

(a) A positively sloped straight line passing through the origin?

(b) A horizontal line?

Explain market equilibrium.

What are the characteristics of a perfectly competitive market?

What do you mean by the budget set of a consumer?

What is the total product of input?

From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:

When do we say that there is an excess demand for a commodity in the market?

How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?

What is budget line?

Explain how price is determined in a perfectly competitive market with a fixed number of firms.

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.

What is the relation between market price and average revenue of a price-taking firm?

Why is the short-run marginal cost curve 'U'-shaped? 

Will a profit-maximising firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.

Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose the price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity.

Suppose the demand and supply curve of commodity XX in a perfectly competitive market are given by:

qD =700 - p

qs = 500 + 3p for p ≥ 15

= 0 or 0 ≤ p <15

Assume that the market consists of identical firms. Identify the reason behind the market supply of commodity X being zero at any price less than Rs 15. What will be the equilibrium price for this commodity? At equilibrium, what quantity of X will be produced?

In what respect do the supply and demand curves in the labor market differ from those in the goods market?

What is the relation between market price and marginal revenue of a price-taking firm?

Suppose a consumer’s preferences are monotonic. What can you say about her preference ranking over the bundles (10, 10), (10, 9) and (9, 9)?