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

Can there be any advantage in classifying things? Explain with an example from your daily life.

Explain the concepts of
i. Marginal Rate of Substitution (MRS),
ii. Budget line, with the help of numerical examples.

Distinguish between 'change in supply' and 'change in quantity supplied' of a commodity. Use diagrams. ### Distinguish between movement along the supply curve and shift in supply curve with the help of suitable figures.

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.

Given below is the market demand and market supply of a commodity with respect to the possible prices. Analyse the data given below and answer the questions that follow:

Price (₹)	10	20	30	40	50
Market Demand (Units)	550	450	350	250	150
Market Supply (Units)	150	250	350	450	550

(i) Estimate the equilibrium price of the given commodity.
(ii) What will be the equilibrium quantity of this commodity?
(iii) At price ₹ 20 what market situation prevails?
(iv) At price ₹ 50 what market situation prevails?

Calculate Laspeyre's price index number from the following data.

Commodity	Price		Quantity Bought
	2014	2015	2014	2015
X	50	52	10	12
Y	7	9	3	4
Z	3	5	7	7

What is procedure of drawing histogram.

What do you mean by 'classification of data'? State the different methods of classification of data.

What is meant by price elasticity of demand? How is it measured?

Explain what happens to the profits if output level is below the equilibrium level.