Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | What do the long-run marginal cost and t

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 is the law of diminishing marginal product? 

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 market equilibrium.

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

How are the equilibrium price and quantity affected when?

(a) Both demand and supply curves shift in the same direction?

(b) Demand and supply curves shift in opposite directions?

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

What is the ‘price line’?

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?

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.

Explain why the budget line is downward sloping.

Suppose a consumer’s preferences are monotonic. What can you say about her preference ranking over the bundles (10, 10), (10, 9) and (9, 9)?

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.