MICROECONOMICS CH : 8 CONCEPTS OF COST — Economics STD 11 Commerce — Question

What is meant by returns to a factor? Explain.

Calculate weighted aggregative price index number from the following data using Paasche's method.

Commodity	Base Year		Current Year
	Price (₹)	Quantity	Price (₹)	Quantity
A	10	30	12	50
B	8	15	10	25
C	6	20	6	30
D	4	10	6	20

Find the standard deviation using the actual mean method.

X	2	3	4	5	6	7
Frequency	2	3	9	21	11	5

A consumer wants to consume two goods. The prices of the goods are ₹4 and ₹5 respectively. The consumer's income is ₹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?

Discuss merits and demerits of Lorenz curve.

A consumer's budget is ₹ 40. He is buying Good-1 and Good-2. Price of Good-1 is ₹ 8 per unit, and of Good-2 is ₹ 10 per unit. Draw a budget line on the basis of these figures.

Distinguish between simple aggregative index and simple average of relatives.

Define marginal utility. State the law of diminishing marginal utility.

Explain the effect of increase in income of the consumer on the demand for a good.