Class 12 Micro Economics - Chapter Introduction to Micro Economics NCERT Solutions | Distinguish between a centrally planned
Distinguish between a centrally planned economy and a market economy.
| S.No. | Points of Difference | Centrally Planned Economy | Market Economy |
|---|---|---|---|
| 1 | Ownership of factors of production. | Factors of production are publicly owned; i.e., public ownership. | Factors of production are privately owned. |
| 2 | Production Motive | The motive of production is social welfare. Factors of production are publicly owned; i.e., public ownership. | The main motive is profit making. |
| 3 | Governing Factor | The production is governed by a planning mechanism; i.e. according to the government plans. | The production is governed by price mechanism; i.e., by demand and supply. |
| 4 | Income Distribution | The degree of inequality of income is low. | There exists unequal distribution of income. |
| 5 | Government’s Role | The main role is played by the government – from production to distribution. | The main role is played by private players. They decide what to produce, while the role of a government is limited to maintaining law and order in the nation. |
More Questions From Class 12 Micro Economics - Chapter Introduction to Micro Economics
- Q:-
Distinguish between microeconomics and macroeconomics.
- Q:-
What do you mean by the production possibilities of an economy?
- Q:-
Discuss the subject matter of economics.
- Q:-
What is a production possibility frontier?
- Q:-
Discuss the central problems of an economy.
- Q:-
What do you understand by normative economic analysis?
- Q:-
What do you understand by positive economic analysis?
Popular Questions of Class 12 Micro Economics
- Q:-
Explain the concept of a production function
- Q:-
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?
- Q:-
Explain market equilibrium.
- Q:-
What are the characteristics of a perfectly competitive market?
- Q:-
What do you mean by the budget set of a consumer?
- Q:-
What is the total product of input?
- Q:-
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
- Q:-
When do we say that there is an excess demand for a commodity in the market?
- Q:-
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
- Q:-
What is budget line?
Recently Viewed Questions of Class 12 Micro Economics
- Q:-
A shift in demand curve has a larger effect on price and smaller effect on quantity when the number of firms is fixed compared to the situation when free entry and exits is permitted. Explain.
- Q:-
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.
- Q:-
Will a profit-maximising firm in a competitive market produce a positive level of output in the long run if the market price is less than the minimum of AC? Give an explanation.
- Q:-
Let the production function of a firm be Q=5L1/2K1/2Q=5L1/2K1/2 Find out the maximum possible output that the firm can produce with 100 units of LL and 100 units of KK.
- Q:-
What happens to the budget set if both the prices as well as the income double?
- Q:-
When do we say that there is an excess demand for a commodity in the market?
- Q:-
What is the law of variable proportions?
- Q:-
What do you mean by ‘monotonic preferences’?
- Q:-
What is the ‘price line’?
- Q:-
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.
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