Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | Let the production function of a firm be

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. 

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 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? 

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

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

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?

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

How is the equilibrium number of firms determined in a market where entry and exit is permitted?

When do we say that there is an excess demand for a commodity in the market?

Suppose a consumer wants to consume two goods which are available only in
integer units. The two goods are equally priced at Rs 10 and the consumer’s
income is Rs 40.
(i) Write down all the bundles that are available to the consumer.
(ii) Among the bundles that are available to the consumer, identify those which cost her exactly Rs 40.

Can there be a positive level of output that a profit-maximising firm produces in a competitive market at which market price is not equal to marginal cost? Give an explanation.

What do you mean by the budget set of a consumer?

What do you mean by an ‘inferior good’? Give some examples

Will a profit-maximising firm in a competitive market produce a positive level of output in the long run if the market price is less than the minimum of AC? Give an explanation.

Consider a market with two firms. In the following table, columns labelled as SS₁ and SS₂ give the supply schedules of firm 1 and firm 2 respectively. Compute the market supply schedule.

A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increases to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm’s supply curve?