MICROECONOMICS CH : 3 CONSUMER'S EQUILIBRIUM UTILITY ANALYSIS — Economics STD 11 Commerce — Question

Suppose you want to emphasise the increase in the share of urban non-workers and lower level of urbanisation in India as shown in Example 4.2. How would you do it in the tabular form?

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?

Giving reason, comment on the shape of production possibilities curve based on the following schedule:

Good-X (Units)	0	1	2	3	4
Good-Y (Units)	10	9	7	4	0

Differentiate between spatial and choronological classification with example.

Read the following hypothetical information carefully and answer the questions 1-6 on the basis of the same:

Price (₹)	Supply (Units)
1	5
5	10
10	15

1. On the basis of the data given above when price changes from 1 to 5, that situation will be called ______.
(a) extension of supply
(b) contraction of supply
(c) increase in supply
(d) decrease in supply

2. On the basis of your answer of the above question, what will be the shape of new supply curve?
(a) There is upward movement on the same supply curve
(b) There is downward movement on the same supply curve
(c) There is forward shift in supply curve
(d) There is backward shift in supply curve

3. On the basis of the data given above when price changes from ₹ 10 to ₹ 1, that situation will be called ______.
(a) extension of supply
(b) contraction of supply
(c) increase in supply
(d) decrease in supply

4. On the basis of your answer of the above question, what will be the shape of new supply curve?
(a) There is upward movement on the same supply curve
(b) There is downward movement on the same supply curve
(c) There is forward shift in supply curve
(d) There is backward shift in supply curve

5. Read the following statements carefully and choose the correct alternative among those given below:
Statement 1: Increase in supply occurs when more is supplied at the existing price.
Statement 2: Decrease in supply leads to a backward shift in supply curve.
(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. If the producer expects price of the commodity to rise in the near future, current supply of the commodity will reduce. (True or False)

State the law of supply and the assumption behind it.

Calculate coefficient of correlation between age group and rate of mortality from the following data.

Age Group	0-20	20-40	40-60	60-80	80-100
Rate of Mortality	350	280	540	760	900

Distinguish between cardinal and ordinal measurement of utility.

Read the following case study carefully and answer the questions 1-2 on the basis of the same:
The production function is a mathematical expression which relates the quantity of factor inputs to the quantity of outputs that result. The short run production function is defined in economics as a period of time where at least one factor of production is assumed to be fixed. The analysis of short run production sets the stage to better understand the supply-side of the market. How producers respond to price depends, in part, on their ability to combine inputs to produce output. This ability is guided by the law of diminishing marginal returns, which states that the productivity of a variable input declines as more is added to a fixed input. If productivity declines, then more of the variable input is needed as the quantity produced increases. This results in an increase in production cost, which means producers need to receive a higher price.
- Bashir, Furrukh and others, Estimation of Short Run Production Function:
A Case Study of Shakarganj Mills Limited, 2011
1. Spell out the basic difference between the 'law of variable proportions', and 'returns to scale'.
2.  (i) Increasing returns to a factor are indicated whenever there it true? is increase in total product. Is
     (ii) Diminishing returns to a factor must lead to a fall in marginal product as well as total product. Is it true?