Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | Explain the relationship between the mar

What is the total product of input?

When does a production function satisfy decreasing returns to scale? 

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.

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.

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

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

What is the law of diminishing marginal product? 

What is the law of variable proportions? 

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?

A monopoly firm has a total fixed cost of Rs 100 and has the following demand schedule:

Find the short run equilibrium quantity, price and total profit. What would be the equilibrium in the long run? In case the total cost is Rs.1000, describe the equilibrium in the short run and in the long run.

What do you mean by an ‘inferior good’? Give some examples

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

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? 

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.

Compute the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is Rs 10.

What is budget line?

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

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.

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.