MICROECONOMICS CH : 6 PRICE ELASTICITY OF DEMAND — Economics STD 11 Commerce — Question

Two ladies were asked to rank 7 different types of lipstics. The ranks given by them are as follows:

Lipsitics	A	B	C	D	E	F	G
Neelu	2	1	7	3	5	7	6
Neena	1	3	2	4	5	6	7

Calculate Spearman's rank correlation coefficient.

Differentiate between inclusive and exclusive series.

Read the following text carefully and answer the questions 1-2 on the basis of the same:
In a centrally planned economy, the government or the central authority plans all the important activities in the economy. The central authority may try to achieve a particular allocation of resources and a consequent distribution of the final combination of goods and services which is thought to be desirable for society as a whole. For example, if it is found that a good or service which is very important for the prosperity and well-being of the economy as a whole is not produced in adequate amount by the individuals on their own, the government might try to induce the individuals to produce adequate amount of such a good or service or, alternatively, the government may itself decide to produce the good or service in question.

1. State one difference between centrally planned economy and market economy.
2. State three characteristics of a centrally planned economy.

Just as individuals face scarcity of resources, the resources of an economy as a whole are always limited in comparison to what the people in the economy collectively want to have. The scarce resources have alternative usages and every society has to decide on how much of each of the resources to use in the production of different goods and services. In other words, every society has to determine how to allocate its scarce resources to different goods and services.
An allocation of the scarce resource of the economy gives rise to a particular combination of different goods and services. Given the total amount of resources, it is possible to allocate the resources in many different ways and, thereby achieving different mixes of all possible goods and services. The collection of all possible combinations of the goods and services that can be produced from a given amount of resources and a given stock of technological knowledge is called the production possibility set of the economy.

1. Draw a PPC and explain the problem of scarcity.

Define classification. What are objectives of classification?

State the concepts of extension and contraction of supply with the help of figures.

Enumerate the main objectives for computing an average.

Distinguish between fixed costs and variable costs. Give two examples of each.

When the consumer is in equilibrium, MU of commodity-X is 45 and price of commodity-X is ₹9. Calculate the marginal utility of money. (Assuming marginal utility of money for the consumer is constant in equilibrium.)