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
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
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
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
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
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.
Decrease in Price of Inputs and Supply Curve
This image of decrease in price of inputs and supply curve
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Question number: 24
» Producer Behaviour and Supply » Supply » Elasticity of Supply
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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