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.

Discuss the subject matter of economics.

What is a production possibility frontier?

Discuss the central problems of an economy.

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?

Suppose there are 20 consumers for a good and they have identical demand functions: 

d(p)=10–3pd(p)=10–3p for any price less than or equal to 103103 and d1(p)=0d1(p)=0 at any price greater than 103.

Considering the same demand curve as in exercise 22, now let us understand for free entry and exit of the firms producing commodity X. Also assume the market consists of identical firms producing commodity X. Let the supply curve of a single firm be explained?

q*= 8+3p for p ≥ 20

= 0 for 0 ≤ p ≤ Rs 20

(a) What is the significance of p =20?

(b) At what price will the market for X be in equilibrium? State the reason for your answer.

(c) Calculate the equilibrium quantity and number of firms. 

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)?

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. 

How does the imposition of a unit tax affect the supply curve of a firm?

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?

Suppose there was a 4 % decrease in the price of a good, and as a result, the expenditure on the good increased by 2 %. What can you say about the elasticity of demand?

What does the price elasticity of supply mean? How do we measure it?

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

How are equilibrium price and quantity affected when income of the consumers

a) Increase

b) Decrease