Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | What is the law of diminishing marginal

What is the total product of input?

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

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

When does a production function satisfy decreasing returns to scale? 

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

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

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

Briefly explain the concept of the cost function. 

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

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?

Explain through a diagram the effect of a rightward shift of both the demand and supply curves on equilibrium price and quantity.

What will happen if the price prevailing in the market is?

i. Above the equilibrium price

Ii. Below the equilibrium price

If a consumer has monotonic preferences, can she be indifferent between the
bundles (10, 8) and (8, 6)?

Explain price elasticity of demand.

How does the budget line change if the price of good 2 decreases by a rupee
but the price of good 1 and the consumer’s income remain unchanged?

What are the characteristics of a perfectly competitive market?

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

Suppose a consumer can afford to buy 6 units of good 1 and 8 units of good 2
if she spends her entire income. The prices of the two goods are Rs 6 and Rs 8
respectively. How much is the consumer’s income?

Explain market equilibrium.

What is the supply curve of a firm in the long run?