Market and Price Determination-Market Equilibrium (CBSE Class-12 Economics): Questions 1 - 9 of 13

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Question number: 1

» Market and Price Determination » Market Equilibrium

Appeared in Year: 2009

Essay Question▾

Describe in Detail

What changes will take place to bring an economy in equilibrium if

(a) Planned savings are greater than planned investment and

(b) Planned savings are less than planned investment.

Explanation

(a) Planned savings are greater than planned investment: -

Planned savings are greater than planned investment indicates that total consumption expenditure is less than purchased supply of goods and services.

High saving indicates low consumption which means required output is less than the planned output. Portion of the supply remains… (266 more words) …

Question number: 2

» Market and Price Determination » Market Equilibrium

Short Answer Question▾

Write in Short

Define ‘Marginal Rate of Transformation’.

Question number: 3

» Market and Price Determination » Market Equilibrium

Essay Question▾

Describe in Detail

Given market equilibrium of a good, what are the effects of simultaneous increase in both demand and supply of that good on its equilibrium price and quantity?

Explanation

If increase in demand affects prices and quantities we assume that there is increase in income of working class.

Their demand for cloth This will raise the equilibrium price and quantity of cloth and the supply curve of cloth is unchanged in figure. We understand the increase in price and… (161 more words) …

Question number: 4

» Market and Price Determination » Market Equilibrium

Essay Question▾

Describe in Detail

Market for a good is in equilibrium. What is the effect on equilibrium price and quantity if the proportionate increase in market demand is greater than increase in market supply? Use diagram.

Explanation

Market for a good is in equilibrium when proportionate increase in market demand is greater than increase in market supply the equilibrium price and quantity will rise.

market supply the equilibrium price and quantity

Market Supply the Equilibrium Price and Quantity

This image of market supply the equilibrium price and quantity

In that figure D1D1 is demand… (62 more words) …

Question number: 5

» Market and Price Determination » Market Equilibrium

Short Answer Question▾

Write in Short

Define ‘Equilibrium price’.

Question number: 6

» Market and Price Determination » Market Equilibrium

Essay Question▾

Describe in Detail

Given the market price of good, how does a consumer decide as to how many units of that good to buy? Explain.

Explanation

Given the market price of good, how does a consumer decide as to how many units of that good to buy it is based on marginal. Consumer purchases many units of good where marginal utility of rupee spent in a good and it is equal to marginal utility of money… (80 more words) …

Question number: 7

» Market and Price Determination » Market Equilibrium

Essay Question▾

Describe in Detail

A consumer consumes only two goods. Explain his equilibrium with the help of utility approach.

Explanation

A consumer is in state of equilibrium when we maximize his satisfaction by spending his given income on different goods and services.

If buying only two goods, the consumer strike on equilibrium when: MUxPx = MUYPY = MUM

It implies… (26 more words) …

Question number: 8

» Market and Price Determination » Market Equilibrium

Essay Question▾

Describe in Detail

Define equilibrium price of commodity. How is it determined? Explain with the help of schedule.

Explanation

Equilibrium price means market demand and market supply are equal and intersect market demand and market supply.

Its schedule is given below:

Price (Rs)

Market Demand

Market Supply

10

35

2

20

30

5

30

25

10

40

20

13

50

15

15

In this schedule price increases when Market… (37 more words) …

Question number: 9

» Market and Price Determination » Market Equilibrium

Essay Question▾

Describe in Detail

Define equilibrium price. How is it determined? Explain with the help of a schedule.

Explanation

The price equal to the market demand of a commodity with its market supply is the equilibrium price. Equilibrium price is determined at a point where market demand is equal to market supply.

Demand and supply schedules are given: -

Determination of Equilibrium Price

Price

( Rs. )

Quantity Demanded… (85 more words) …

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