Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | The following table gives the total prod

What is the total product of input?

Let the production function of a firm be Q=5L1/2K1/2Q=5L1/2K1/2 Find out the maximum possible output that the firm can produce with 100 units of LL and 100 units of KK.

When does a production function satisfy decreasing returns to scale? 

What do the long-run marginal cost and the average cost curves look like? 

Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve? 

What does the average fixed cost curve look like? Why does it look so? 

Explain the relationship between the marginal products and the total product of an input. 

Why is the short-run marginal cost curve 'U'-shaped? 

What is the law of variable proportions? 

What are the average fixed cost, average variable cost and average cost of a firm? How are they related? 

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.

Discuss the central problems of an economy.

What are the characteristics of a perfectly competitive market?

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

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?

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

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?

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

a) Increase

b) Decrease

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. 

Suppose the demand and supply curve of commodity XX in a perfectly competitive market are given by:

qD =700 - p

qs = 500 + 3p for p ≥ 15

= 0 or 0 ≤ p <15

Assume that the market consists of identical firms. Identify the reason behind the market supply of commodity X being zero at any price less than Rs 15. What will be the equilibrium price for this commodity? At equilibrium, what quantity of X will be produced?

What is the ‘price line’?

The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising level of output.

What is a production possibility frontier?

Explain how price is determined in a perfectly competitive market with a fixed number of firms.

Will the monopolist firm continue to produce in the short run if a loss is incurred at the best short run level of output?

Will a profit-maximising firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.

Compute the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is Rs 10.