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

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? 

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

What is the law of diminishing marginal product? 

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

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

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? 

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

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 does the price elasticity of supply mean? How do we measure it?

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

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.

How does an increase in the price of an input affect the supply curve of a firm?

How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?

Suppose the demand and supply curve of commodity XX in a perfectly competitive market are given by:

qD =700 - p

qs = 500 + 3p for p ≥ 15

= 0 or 0 ≤ p <15

Assume that the market consists of identical firms. Identify the reason behind the market supply of commodity X being zero at any price less than Rs 15. What will be the equilibrium price for this commodity? At equilibrium, what quantity of X will be produced?

There are three identical firms in a market. The following table shows the supply schedule of firm 1. Compute the market supply schedule.

How do the equilibrium price and the quantity of a commodity change when the price of input used in its production changes?

The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising level of output.