MICROECONOMICS CH : 9 CONCEPT OF REVENUE — Economics STD 11 Commerce — Question

The existence of a large number of buyers and sellers means that each individual buyer and seller is very small compared to the size of the market. This means that no individual buyer or seller can influence the market by their size. Homogeneous products further mean that the product of each firm is identical. So a buyer can choose to buy from any firm in the market, and she gets the same product. Free entry and exit mean that it is easy for firms to enter the market, as well as to leave it.

1. Which of the following does not support the argument of perfectly competitive firm being a price taker?
(a) Large number of firms
(b) Sale of homogeneous products
(c) Price discrimination
(d) Price fixation by the industry

2. degree of product differentiation is found under perfect competition.
(a) Zero
(b) One
(c) Infinite
(d) None of these

3. Under perfect competition, demand curve of a firm is:
(a) perfectly elastic
(b) perfectly inelastic
(c) more elastic
(d) less elastic

4. A firm under perfect competition earns only normal profits in the short run. (True or False)

5. Read the following statements carefully and choose the correct alternative among those given below:
Statement 1: Perfectly competitive firms exercise partial control over price.
Statement 2: Product differentiation is widely practiced under perfect competition.
(a) Both the statements are true
(b) Both the statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false

6. What is the shape of average revenue curve under perfect competition?

Direction Read the following case study and answer questions 1 to 5 on the basis of the same.
Collection of data is the first step in a statistical analysis. Data can be collected either from primary source or secondary source. Primary data is original as it is being collected for the first time. After collecting the data, next step is to organise the data as raw data cannot be used for further statistical analysis. There are various methods of classification of data based upon the nature of quantitative data.

1. Time series graphs are presented on the basis of general characteristics of a data. Choose from the options below.

1. True
2. False
3. Partially true
4. Incomplete statement

2. Classification of data based on time period is known as ......... classification.

1. Chronological
2. Temporal
3. Spatial
4. Both (a) and (b)

3. Data are grouped with reference to the attributes is referred to as ... classification.

1. Qualitative
2. Quantitative
3. Both (a) and (b)
4. Neither (a) nor (b)

4. In which of the following method of frequency distribution, the upper limit of each class is excluded from the series but equal to the lower limit of the succeeding series?

1. Continuous exclusive frequency distribution.
2. Continuous inclusive frequency distribution.
3. Continuous cumulative frequency distribution.
4. None of the above.

Draw a Lorenz curve from the following data and comment:

Marks:	5-15	15-25	25-35	35-45	45-55
No, of students:	7	5	4	2	2

Draw a frequency polygon using mid-values from the following table:

Marks	0-10	10-20	20-30	30-40	40-50	50-60
No. of Students	5	12	15	22	14	4

Explain various functions of statistics.

Explain the concepts of positive and normative economics with illustrations.

Read the following case study carefully and answer the questions 1-6 on the basis of the same:
An economic system is a set of principles based on which an economy can run and make decisions about which goods and services to produce, how to produce and exchange them, how should the income from the production be distributed among the factor resources and what shall be the right balance between public sector and private sector and that between free market mechanism and regulation. Capitalism is an economic system based on certain principles, like provision of private property rights, free market economy and allowing economic agents (consumers and producers) to pursue private motives and self-interest with no or minimal government intervention. In an open economy and free trade environment, countries should produce the goods domestically in which they have comparative advantage. Comparative advantage principle states that if a country can produce a particular good at least opportunity cost comparatively than the rest of the world, then the country has comparative advantage in producing that good.

1. In _________ the degree of consumer sovereignty is highest.
(a) market economy
(b) centrally planned economy
(c) mixed economy
(d) both (a) and (c)

2. Which of the following is not a feature of centrally planned economy?
(a) Control of central authority
(b) Ownership of resources by government
(c) Consumer sovereignty
(d) Dominance over economic activity by public sector

3. Which among the following countries is not capitalistic or market driven in nature?
(a) Hong Kong
(b) Ireland
(c) Russia
(d) Canada

4._________economy is an economy in which the degree of interdependence and exchange is of a moderate degree.
(a) Simple
(b) Complex
(c) Both (a) and (b)
(d) None of these

5. Read the following statements carefully and choose the correct alternative among those given below:
Statement 1 : In a simple economy, income level of the people is low.
Statement 2 : In a complex economy, wants are multiple as well as enormous.
Alternatives:
(a) Both the statements are true
(b) Both the statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false

6. In mixed economy, both public and private sectors dominate the economic activity.

Construct a pie-diagram from the following table:

Items	Agriculture	Industry	Transport	Administration	Banking
Percentage	40	21	19	13	07

Direction Analyse the following case study graphs and answer questions (i) to (v) on the basis of the same.

1. According to figure one, value of median is equal to .........

1. 15
2. 20
3. 30
4. 40

2. Median can be located graphically using which of the following?

1. Less than ogive.
2. More than ogive.
3. Both less than ogive and more than ogive together.
4. All of the above.

3. Which form of graphical presentation is used to locate mode?

1. Histogram
2. Bar graphs
3. Cumulative curves
4. Arithmetic line graphs

4. According to figure two, the approxi- mate value of mode is equal to .........

1. 25
2. 35
3. 45
4. Can't be determined

5. What will be the mean value in case 1?

1. 10
2. 15
3. 25
4. None of the above