Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | What do the short-run marginal cost, ave

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? 

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 consumer wants to consume two goods. The prices of the two goods are Rs 4
and Rs 5 respectively. The consumer’s income is Rs 20.
(i) Write down the equation of the budget line.
(ii) How much of good 1 can the consumer consume if she spends her entire
income on that good?
(iii) How much of good 2 can she consume if she spends her entire income on
that good?
(iv) What is the slope of the budget line?
Questions 5, 6 and 7 are related to question 4.

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

Suppose the price elasticity of demand for a good is – 0.2. If there is a 5 % increase in the price of the good, by what percentage will the demand for the good go down?

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?

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

Suppose your friend is indifferent to the bundles (5, 6) and (6, 6). Are the preferences of your friend monotonic?

Consider the demand curve D (p) = 10 – 3p. What is the elasticity at price 53?

What do you understand by normative economic analysis?

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?