Consumer's Equilibrium and Demand-Consumer's Equilibrium (CBSE Class-12 Economics): Questions 1 - 6 of 17

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Question number: 1

» Consumer's Equilibrium and Demand » Consumer's Equilibrium

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Why is the consumer in equilibrium when he buys only that combination of the two goods that is shown at the point of tangency of the budget line with an indifference curve? Explain.

Question number: 2

» Consumer's Equilibrium and Demand » Consumer's Equilibrium

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Explain how a consumer consuming two commodities X and Y attains equilibrium

under the utility approach.

Question number: 3

» Consumer's Equilibrium and Demand » Consumer's Equilibrium

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(a) What is a budget line? What does the point on it indicate in terms of prices?

(b) A consumer consumes only two goods X and Y. Her money income is Rs. 24 and the prices of Goods X and Y are Rs. 4 and Rs. 2 respectively. Answer the following questions:

(i) Can the consumer afford a bundle 4X and 5Y? Explain.

(ii) What will be the MRSXY when the consumer is in equilibrium? Explain.

Question number: 4

» Consumer's Equilibrium and Demand » Consumer's Equilibrium

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For a consumer to be in equilibrium why must marginal rate of substitution be equal to the ratio of prices of the two goods?

Question number: 5

» Consumer's Equilibrium and Demand » Consumer's Equilibrium

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Explain the meaning of equilibrium level of income and output using savings and investment approach. Use a diagram.

Question number: 6

» Consumer's Equilibrium and Demand » Consumer's Equilibrium

» Producer Behaviour and Supply » Producer's Equilibrium

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There is a simultaneous ‘decrease’ in demand and supply of a commodity. When will it result in:

(a) No change in equilibrium price.

(b) A fall in equilibrium price.

Use diagrams.

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