Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | What is the total product of input?

When does a production function satisfy decreasing returns to scale? 

Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve? 

What do the long-run marginal cost and the average cost curves look like? 

The following table gives the total product schedule of labour. Find the corresponding average product and marginal product schedules of labour.

Explain the relationship between the marginal products and the total product of an input. 

What are the average fixed cost, average variable cost and average cost of a firm? How are they related? 

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.

What does the average fixed cost curve look like? Why does it look so? 

What is the law of diminishing marginal product? 

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.

Discuss the central problems of an economy.

What are the characteristics of a perfectly competitive market?

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

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?

What do you mean by the production possibilities of an economy?

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?

Can you think of any commodity on which the price ceiling is imposed in India? What may be the consequence of price-ceiling?

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

Explain market equilibrium.

How is the equilibrium number of firms determined in a market where entry and exit is permitted?

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

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.

What is budget line?

Suppose the demand and supply curves of salt are given by:

(a) Find the equilibrium price and quantity.

(b) Now, suppose that the price of an input that used to produce salt has increased so, that the new supply curve is qs = 400 + 3p

How does the equilibrium price and quantity change? Does the change conform to your expectation?

(a) Suppose the government has imposed at ax of Rs 3 per unit of sale on salt. How does it affect the equilibrium rice quantity? 

Will a profit-maximising firm in a competitive market produce a positive level of output in the short run if the market price is less than the minimum of AVC? Give an explanation.

Distinguish between a centrally planned economy and a market economy.