Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | What is the law of variable proportions?

What is the total product of input?

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

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

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

When does a production function satisfy decreasing returns to scale? 

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

Explain the concept of a production function

Why is the short-run marginal cost curve 'U'-shaped? 

At which point does the SMC curve intersect the SAC curve? Give a reason in support of your answer. 

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?

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.

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 meant by prices being rigid? How can oligopoly behavior lead to such an outcome? 

Explain price elasticity of demand.

Suppose the price at which the equilibrium is attained in exercise 5 is above the minimum average cost of the firms constituting the market. Now if we allow for free entry and exit of firms, how will the market price adjust to it?

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 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?

If the price of a substitute Y of good X increases, what impact does it have on the equilibrium price and quantity of good X?

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

Comment on the shape of MR curve in case when TR curve is a

(a) Positively sloped straight line

(b) Horizontal straight line