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

What is the total product of input?

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

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.

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

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

When does a production function satisfy decreasing returns to scale? 

Explain the concept of a production function

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

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

At which point does the SMC curve intersect the SAC curve? Give a reason in support of your answer. 

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?

A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increases to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm’s supply curve?

Explain why the demand curve facing a firm under monopolistic competition is negatively sloped.

Explain why the budget line is downward sloping.

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

Will a profit-maximising firm in a competitive market produce a positive level of output in the long run if the market price is less than the minimum of AC? Give an explanation.

Suppose the demand and supply curves of salt are given by:

(a) Find the equilibrium price and quantity.

(b) Now, suppose that the price of an input that used to produce salt has increased so, that the new supply curve is qs = 400 + 3p

How does the equilibrium price and quantity change? Does the change conform to your expectation?

(a) Suppose the government has imposed at ax of Rs 3 per unit of sale on salt. How does it affect the equilibrium rice quantity? 

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

i. Above the equilibrium price

Ii. Below the equilibrium price

How does the budget line change if the price of good 2 decreases by a rupee
but the price of good 1 and the consumer’s income remain unchanged?

What do you mean by ‘monotonic preferences’?

Suppose the price elasticity of demand for a good is – 0.2. How will the expenditure on the good be affected if there is a 10 % increase in the price of the good?