Class 12 Micro Economics - Chapter Introduction to Micro Economics NCERT Solutions | What do you understand by positive econo

Distinguish between a centrally planned economy and a market economy.

Distinguish between microeconomics and macroeconomics.

What do you mean by the production possibilities of an economy?

What is a production possibility frontier?

Discuss the central problems of an economy.

Discuss the subject matter of economics.

What do you understand by normative economic analysis?

Explain the concept of a production function

What would be the shape of the demand curve so that the total revenue curve is?

(a) A positively sloped straight line passing through the origin?

(b) A horizontal line?

Explain market equilibrium.

What are the characteristics of a perfectly competitive market?

What do you mean by the budget set of a consumer?

What is the total product of input?

From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:

When do we say that there is an excess demand for a commodity in the market?

How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?

What is budget line?

There are three identical firms in a market. The following table shows the supply schedule of firm 1. Compute the market supply schedule.

What will happen if the price prevailing in the market is?

i. Above the equilibrium price

Ii. Below the equilibrium price

What does the price elasticity of supply mean? How do we measure it?

How does the imposition of a unit tax affect the supply curve of a firm?

If the monopolist firm of Exercise 3 was a public sector firm. The government set a rule for its manager to accept the government fixed price as given (i.e. to be a price taker and therefore behave as a firm in a perfectly competitive market). And the government has decided to set the price so that demand and supply in the market are equal. What would be the equilibrium price, quantity and profit in this case?

What is the relation between market price and average revenue of a price-taking firm?

A consumer wants to consume two goods. The prices of the two goods are Rs 4
and Rs 5 respectively. The consumer’s income is Rs 20.
(i) Write down the equation of the budget line.
(ii) How much of good 1 can the consumer consume if she spends her entire
income on that good?
(iii) How much of good 2 can she consume if she spends her entire income on
that good?
(iv) What is the slope of the budget line?
Questions 5, 6 and 7 are related to question 4.

How will a change in the price of coffee affect the equilibrium price of tea? Explain the effect on equilibrium quantity also through a diagram. 

How are equilibrium price and quantity affected when income of the consumers

a) Increase

b) Decrease

What is the supply curve of a firm in the long run?