CBSE (Central Board of Secondary Education- Board Exam) Class-12 Economics: Questions 374 - 381 of 523

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Question number: 374

True-False▾

Following Statement is true or false:

A producer is in equilibrium when total cost and total revenue are equal.

Question number: 375

True-False▾

Following Statement is true or false:

Average cost falls only when marginal cost falls.

Question number: 376

» Producer Behaviour and Supply » Supply » Elasticity of Supply

Essay Question▾

Describe in Detail

The price elasticity of supply of commodity Y is half the price elasticity of supply of commodity X. 16 percent rise in the price X results in a 40 percent rise in its supply. If the price of Y falls by 8 percent, calculate the percentage fall in its supply.

Explanation

Elasticity of supply =

Elasticity of supply of X = =2.5

Than

Elasticity of supply of Y = (elasticity of supply of X)

Elasticity of supply of Y = =1.25

Elasticity of supply of Y =

1.25 =

= 1.25 8 = 10

So, with a fall in price of Y is 8 % and rises in 10%.

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Question number: 377

» Producer Behaviour and Supply » Supply » Supply Schedule

Essay Question▾

Describe in Detail

With the help of demand and supply schedule, explain the meaning of excess demand and its effect on price of commodity.

Explanation

Excess demand is when market demand exceeds market supply at a market price. It is represented as

Quantity of demand > Quantity of supply

 Price (Rs) Quantity demanded Quantity supplied 14 1 7 12 2 6 10 3 5 8 4 4 (Equilibrium) 6 5 3 Excess Demand 4 6 2 2 7…

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Question number: 378

» Producer Behaviour and Supply » Supply » Supply Curve

Write in Short

Give one reason for rightward shift in supply curve.

Question number: 379

Essay Question▾

Describe in Detail

Explain two merits each of flexible foreign exchange rate and fixed foreign exchange rate.

Explanation

Flexible exchange rate merits are: -

(i) Eliminates the need to hold huge gold reserves: -

Exchange rate execution eliminates and holds huge gold reserves because this system exchange rate between two currencies is not fix of gold.

(ii) Eliminates the problem of over-valuation and under-valuation of currency: - Exchange rate execution the e…

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Question number: 380

Essay Question▾

Describe in Detail

Given consumption function c = 100 + 0.75Y (Where C = consumption expenditure and Y = national income) and investment expenditure RS. 1000, calculate:

(I) Equilibrium level of national income

(ii) Consumption expenditure at equilibrium level of national income.

Explanation

(I) All know about Y = C +I

Substitute that value of C

Y = 100 + 0.75Y + 1000

0.25Y = 1100

Y = =4400

Equilibrium level of national income = Rs. 4400

(iii) Consumption expenditure at equilibrium level of national income.

Y = C +I

Substituting Y = 4400 in the equation

4400 = c +1000 c = 4400 - 1000 c = 3400

Consumption expendit…

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Question number: 381

» Producer Behaviour and Supply » Supply » Supply Schedule

Essay Question▾

Describe in Detail

Explain the meaning of ‘increase in supply’ and ‘increase in quantity supplied’ with the help of schedule.

Explanation

Increase in supply of good refer to rise in supply of good because of some changes in determine other than price of good

 Price (Rs) Quantity supplied (units) 10 110 10 130 10 150 10 180

In this given schedule when price is constant than supply of good increase.

Increase in quantity supplied of good refer…

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