# Producer Behaviour and Supply-Supply (CBSE (Central Board of Secondary Education- Board Exam) Class-12 Economics): Questions 15 - 24 of 39

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## Question number: 15

» Producer Behaviour and Supply » Supply » Elasticity of Supply

Appeared in Year: 2010

Essay Question▾

### Describe in Detail

At a price of Rs. 5 per unit of commodity A, total revenue is Rs. 800. When its price rises by 20 percent, total revenue increases by Rs. 400. Calculate its price elasticity of supply.

### Explanation

In this initial price (P1) = 5

Total revenue (TR) =800

So, Total revenue = price Quantity

800 = 5 Quantity

Quantity = = 160

Given: 20 % rise in price, means P = 20%

20 % of 5 = =1

So, P1 = 5+1 = 6

In this

TR1 = P1 Q1

1200 = 6 Q1

Q1= = 200

Now, = Q1 –Q

= 200 - 160 = 40

We know,

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## Question number: 16

» Producer Behaviour and Supply » Supply » Supply Schedule

Essay Question▾

### Describe in Detail

Give meaning of money supply, State its components.

### Explanation

Meaning of money supply: - Money supply is the total stock of money moving in an economy. The moving money involves the currency, printed notes, money in the deposit accounts and in the form of other liquid assets.

Its components are given below:

(1) Currency arrange by the public

(2) Demand deposits of the people with the commercial banks

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## Question number: 17

» Producer Behaviour and Supply » Supply » Determinants of Supply

### Write in Short

Give the meaning of aggregate supply.

## Question number: 18

» Producer Behaviour and Supply » Supply » Supply Schedule

### Write in Short

Give meanings of supply schedule.

## Question number: 19

» Producer Behaviour and Supply » Supply » Supply Curve

Essay Question▾

### Describe in Detail

Draw straight line supply curves with price elasticity of supply equal to (i) one, (ii) less than one and (iii) more than one

### Explanation

Price elasticity of supply is the measure of change in quantity supplied of commodity because of the change in its price. Law of supply is the direction in which supply will change in result of change in price, a decrease in price will result into contraction of supply and a rise in price will lead to extension of supply.

(I) E = 1, when a stra

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## Question number: 20

» Producer Behaviour and Supply » Supply » Determinants of Supply

### Write in Short

Will the supply at a point on a positively sloped, straight line supply curve be unitary elastic, elastic or inelastic?

## Question number: 21

» Producer Behaviour and Supply » Supply » Supply Schedule

Essay Question▾

### Describe in Detail

Distinguish between (i) elastic and inelastic supply and (ii) perfectly elastic and perfectly inelastic supply.

### Explanation

 Characteristics Elastic Supply Inelastic Supply Definition Elastic supply means increase in price causes a greater percent increase in supply. Inelastic supply. This means that an increase in price causes a less percent increase in supply. It has a price elasticity of supply of less than 1. How many price elasticity? It has price elasticity of supply of greater than 1. It has a price elasticity of supply of less than 1.

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## Question number: 22

» Producer Behaviour and Supply » Supply » Supply Schedule

### Write in Short

When exchange rate of foreign currency rises, its supply rises. How? Explain.

## Question number: 23

» Producer Behaviour and Supply » Supply » Supply Curve

Essay Question▾

### Describe in Detail

What is the likely effect on the supply of good if a unit tax is imposed on that good? Explain.

### Explanation

Price of input used in production and it shares negative relationship with supply of good. If input price decreases than cost of production get decreased so, producers increase the production of good with decrease in input prices and supply of good increase.

… (21 more words) …

## Question number: 24

» Producer Behaviour and Supply » Supply » Elasticity of Supply

Essay Question▾

### Describe in Detail

Draw supply curves with price elasticity of supply throughout equal to (i) Zero (ii) one, (iii) infinity and less than one.

### Explanation

Price elasticity of supply is the measure of change in quantity supplied of commodity because of the change in its price. Law of supply is the direction in which supply will change in result of change in price, a decrease in price will conduct to contraction of supply and a rise in price will lead to extension of supply. But, if we want to measur

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